2022.07-08 Foreign Affairs

HOW LONG CAN VLADIMIR PUTIN HOLD ON?
JULY/AUGUST 2022
JULY/AUGUST 2022 • VOLUME 101 • NUMBER 4 •
WHAT IS POWER?
What Is Power?
F O R E I G N A F F A I R S .C O M
Volume 101, Number 4
WHAT IS POWER?
Why War Fails 10
Russia’s Invasion of Ukraine and the Limits
of Military Power
Lawrence Freedman
What the Mighty Miss 24

The Blind Spots of Power
Ngaire Woods
The Perils of Pessimism 34

Why Anxious Nations Are Dangerous Nations
Daniel W. Drezner
The Balance of Soft Power 44

The American and Chinese Quests to Win Hearts
and Minds
Maria Repnikova
What Makes a Power Great 52

The Real Drivers of Rise and Fall
Michael J. Mazarr
What Money Can’t Buy 64

The Limits of Economic Power
Barry Eichengreen
COVE R: AN D REA UCINI
Hierarchies of Weakness 74
The Social Divisions That Hold Countries Back
Amitav Acharya
July/August 2022
ESSAYS
Can Putin Survive? 84
The Lessons of the Soviet Collapse
Vladislav Zubok
The Consequences of Conquest 97

Why Indo-Pacific Power Hinges on Taiwan
Brendan Rittenhouse Green and Caitlin Talmadge
The Hollow Order 107

Rebuilding an International System That Works
Philip Zelikow
Last Best Hope 120

The West’s Final Chance to Build a Better World Order
Ivo H. Daalder and James M. Lindsay
The New Energy Order 131

How Governments Will Transform Energy Markets
Jason Bordoff and Meghan L. O’Sullivan
Nigeria’s Second Independence 145

Why the Giant of Africa Needs to Start Over
Uzodinma Iweala
The Myth of the Global 158

Why Regional Ties Win the Day
Shannon K. O’Neil
ON FOREIGNAFFAIRS.COM
Liana Fix and Michael Nina Khrushcheva on Yanzhong Huang on
Kimmage on the war Russia’s security state. China’s COVID-19
in Ukraine. lockdowns.
July/August 2022
Can Brazil Turn Back the Clock? 170
Latin America’s Nostalgia Trap and the Return of Lula
Brian Winter
REVIEWS & RESPONSES

The Quants in the Room 182
How Much Power Do Economists Really Have?
Jason Furman
Evil Empires? 190

The Long Shadow of British Colonialism
Lauren Benton
How the System Was Rigged 197

The Global Economic Order and the Myth of Sovereignty
Branko Milanovic
“Foreign Affairs . . . will tolerate wide differences of opinion. Its articles will not represent any consensus
of beliefs. What is demanded of them is that they shall be competent and well informed, representing
honest opinions seriously held and convincingly expressed. . . . It does not accept responsibility for the
views expressed in any article, signed or unsigned, which appear in its pages. What it does accept is the
responsibility for giving them a chance to appear there.”
Archibald Cary Coolidge, Founding Editor
Volume 1, Number 1 • September 1922
July/August 2022
WHAT IS POWER?
W
“ ar is a dispute about the States and China have brought to
measurement of power,” their competition and the threats that
the historian Geoffrey both visions face.
Blainey wrote half a century ago. The final three essays attempt to
Earlier this year, Russian President identify the underlying drivers of
Vladimir Putin took the measure of international power. Michael Mazarr
Russia’s power, and of Ukraine’s, and surveys the rise and fall of powers
figured that the disparity promised a across history and identifies the seven
quick victory. Much of the rest of the sources of national dynamism that
world shared his assessment. The explain far more than foreign policy
months since have revealed just how strategies. Barry Eichengreen assesses
faulty these measurements were. the state of U.S. economic influence,
The essays in this issue’s lead pack- which remains strong but faces risks in
age explore what power is and how it the years ahead. And Amitav Acharya
functions in the world today. Lawrence focuses on what he calls “power
Freedman considers Russia’s battlefield within”—the underappreciated strength
setbacks and attributes them to failures and influence that a country gains
that frequently afflict military power— abroad from tackling exclusion and
an overestimation of “the raw force of hierarchy at home.
arms,” a neglect of “command,” and As these authors grapple with the
“the familiar but catastrophic mistake nature and balance of power today, the
of underestimating the enemy.” Ngaire stakes are more than academic. For as
Woods sees Putin’s delusions as just an Blainey pointed out, if war results from
extreme example of the “blind spots” of errors in calculation, peace “marks a
a broader range of leaders “enamored rough agreement about measurement.”
of their own might.” —Daniel Kurtz-Phelan, Editor
In a time of sharpening geopolitical
tensions, Daniel Drezner highlights a
worrying dynamic in how the key
antagonists view the trajectory of their
power: all are pessimistic, which induces
“risky actions in the present to forestall
further decline, which can lead to arms
races and brinkmanship during crises.”
Maria Repnikova describes the distinct
visions of “soft power” that the United
Return to Table of Contents
Russian battalion. Yet throughout these

Why War Fails
WHAT IS POWER?
attacks, Russian forces continued to

move in equipment and materiel with
helicopters. Lacking both a coherent
Russia’s Invasion of strategy for defending the airstrip and a
Ukraine and the Limits viable alternative base, the Russians
of Military Power simply stuck to their original orders,
with disastrous results.
Ukrainian President Volodymyr
Lawrence Freedman Zelensky has described the Chorno-
baivka battle as a symbol of the incom-
O
n February 27, a few days after petence of Russia’s commanders, who
Russia invaded Ukraine, were driving “their people to slaughter.”
Russian forces launched an In fact, there were numerous similar
operation to seize the Chornobaivka examples from the first weeks of the
airfield near Kherson on the Black Sea invasion. Although Ukrainian forces
coast. Kherson was the first Ukrainian were consistently outgunned, they used
city the Russians managed to occupy, their initiative to great advantage, as
and since it was also close to Russia’s Russian forces repeated the same
Crimean stronghold, the airfield would mistakes and failed to change their
be important for the next stage of the tactics. From the start, the war has
offensive. But things did not go accord- provided a remarkable contrast in
ing to plan. The same day the Russians approaches to command. And these
took over the airfield, Ukrainian forces contrasts may go a long way toward
began counterattacking with armed explaining why the Russian military has
drones and soon struck the helicopters so underperformed expectations.
that were flying in supplies from In the weeks leading up to the
Crimea. In early March, according to February 24 invasion, Western leaders
Ukrainian defense sources, Ukrainian and analysts and the international press
soldiers made a devastating night raid were naturally fixated on the over-
on the airstrip, destroying a fleet of 30 whelming forces that Russian President
Russian military helicopters. About a Vladimir Putin was amassing on
week later, Ukrainian forces destroyed Ukraine’s borders. As many as 190,000
another seven. By May 2, Ukraine had Russian troops were poised to invade
made 18 separate attacks on the airfield, the country. Organized into as many as
which, according to Kyiv, had elimi- 120 battalion tactical groups, each had
nated not only dozens of helicopters armor and artillery and was backed by
but also ammunition depots, two superior air support. Few imagined that
Russian generals, and nearly an entire Ukrainian forces could hold out for very
long against the Russian steamroller.
LAWRENCE FREEDMAN is Emeritus The main question about the Russian
Professor of War Studies at King’s College plans was whether they included suffi-
London and the author of the forthcoming book
Command: The Politics of Military Operations cient forces to occupy such a large
From Korea to Ukraine. country after the battle was won. But
10 F O R E I G N A F FA I R S PACKAGE ILLUSTRATIONS BY BRIAN STAUFFER

Lawrence Freedman
the estimates had failed to account for power may enable forces to gain control
the many elements that factor into a of territory, but they are far less effec-
true measure of military capabilities. tive in the successful administration of
Military power is not only about a that territory. In Ukraine, Putin has
nation’s armaments and the skill with struggled even to gain control of
which they are used. It must take into territory, and the way that his forces
account the resources of the enemy, as have waged war has already ensured
well as the contributions from allies and that any attempt to govern, even in
friends, whether in the form of practical Ukraine’s supposedly pro-Russian east,
assistance or direct interventions. And will be met by animosity and resistance.
although military strength is often For in launching the invasion, Putin
measured in firepower, by counting made the familiar but catastrophic
inventories of arms and the size of mistake of underestimating the enemy,
armies, navies, and air forces, much assuming it to be weak at its core, while
depends on the quality of the equip- having excessive confidence in what his
ment, how well it has been maintained, own forces could achieve.
and on the training and motivation of
the personnel using it. In any war, the THE FATE OF NATIONS
ability of an economy to sustain the war Commands are authoritative orders, to
effort, and the resilience of the logisti- be obeyed without question. Military
cal systems to ensure that supplies organizations require strong chains of
reach the front lines as needed, is of command because they commit disci-
increasing importance as the conflict plined and purposeful violence. At times
wears on. So is the degree to which a of war, commanders face the special
belligerent can mobilize and maintain challenge of persuading subordinates to
support for its own cause, both domes- act against their own survival instincts
tically and externally, and undermine and overcome the normal inhibitions
that of the enemy, tasks that require about murdering their fellow humans.
constructing compelling narratives that The stakes can be extremely high.
can rationalize setbacks as well as antici- Commanders may have the fate of their
pate victories. Above all, however, countries in their hands and must be
military power depends on effective deeply aware of the potential for national
command. And that includes both a humiliation should they fail as well as for
country’s political leaders, who act as national glory if they succeed.
supreme commanders, and those Military command is often described
seeking to achieve their military goals as a form of leadership, and as outlined
as operational commanders. in treatises on command, the qualities
Putin’s invasion of Ukraine has sought in military leaders are often
underscored the crucial role of com- those that would be admirable in almost
mand in determining ultimate military any setting: deep professional knowl-
success. The raw force of arms can only edge, the ability to use resources
do so much for a state. As Western lead- efficiently, good communication skills,
ers discovered in Afghanistan and Iran, the ability to get on with others, a sense
superior military hardware and fire- of moral purpose and responsibility, and
12 f o r e i g n a f fa i r s
Why War Fails
a willingness to care for subordinates. have adopted. Russia’s command phi-

But the high stakes of war and the losophy is more hierarchical. In prin-
stresses of combat impose their own ciple, Russian doctrine allows for local
demands. Here, the relevant qualities initiative, but the command structures
include an instinct for maintaining the in place do not encourage subordinates
initiative, an aptitude for seeing complex to risk disobeying their orders. Inflex-
situations clearly, a capacity for building ible command systems can lead to
trust, and the ability to respond nimbly to excessive caution, a fixation on certain
changing or unexpected conditions. The tactics even when they are inappropri-
historian Barbara Tuchman identified the ate, and a lack of “ground truth,” as
need for a combination of resolu- subordinates dare not report problems
tion—“the determination to win and instead insist that all is well.
through”—and judgment, or the Russia’s problems with command in
capacity to use one’s experience to read Ukraine are less a consequence of
situations. A commander who com- military philosophy than of current
bines resolve with keen strategic political leadership. In autocratic
intelligence can achieve impressive systems such as Russia’s, officials and of-
results, but resolve combined with ficers must think twice before challeng-
stupidity can lead to ruin. ing superiors. Life is easiest when they
Not all subordinates will automati- act on the leader’s wishes without
cally follow commands. Sometimes question. Dictators can certainly make
orders are inappropriate, perhaps be- bold decisions on war, but these are far
cause they are based on dated and more likely to be based on their own
incomplete intelligence and may there- ill-informed assumptions and are
fore be ignored by even the most diligent unlikely to have been challenged in a
field officer. In other cases, their imple- careful decision-making process. Dicta-
mentation might be possible but unwise, tors tend to surround themselves with
perhaps because there is a better way to like-minded advisers and to prize
achieve the same objectives. Faced with loyalty above competence in their
orders they dislike or distrust, subordi- senior military commanders.
nates can seek alternatives to outright
disobedience. They can procrastinate, FROM SUCCESS TO STALEMATE
follow orders half-heartedly, or interpret Putin’s readiness to trust his own
them in a way that fits better with the judgment in Ukraine reflected the fact
situation that confronts them. that his past decisions on the use of
To avoid these tensions, however, the force had worked out well for him. The
modern command philosophy followed state of the Russian military in the
in the West has increasingly sought to 1990s before he took power was dire, as
encourage subordinates to take the shown by Russian President Boris
initiative to deal with the circumstances Yeltsin’s 1994–96 war in Chechnya. At
at hand; commanders trust those close to the end of 1994, Russian Defense
the action to make the vital decisions yet Minister Pavel Grachev reassured
are ready to step in if events go awry. Yeltsin that he could end Chechnya’s
This is the approach Ukrainian forces effort to secede from the Russian
July/August 2022 13
Lawrence Freedman
Federation by moving Russian forces In this second Chechen war, Russia

quickly into Grozny, the Chechen proceeded with more deliberation and
capital. The Kremlin viewed Chechnya ruthlessness until it succeeded in
as an artificial, gangster-infested state occupying Grozny. Although the war
for which few of its citizens could be dragged on for some time, Putin’s
expected to sacrifice their lives, espe- visible commitment to ending the
cially when confronted with the full Chechen rebellion was sufficient to
blast of Russian military power—mis- provide him with a decisive victory in
guided assumptions somewhat similar the spring 2000 presidential election.
to those made on a much larger scale in As Putin was campaigning, journalists
the current invasion of Ukraine. The asked him which political leaders he
Russian units included many conscripts found “most interesting.” After citing
with little training, and the Kremlin Napoleon—which the reporters took
failed to appreciate how much the as a joke—he offered Charles de
Chechen defenders would be able to Gaulle, a natural choice perhaps for
take advantage of the urban terrain. someone who wanted to restore the
The results were disastrous. On the first effectiveness of the state with a strong
day of the attack, the Russian army lost centralized authority.
over 100 armored vehicles, including By 2013, Putin had gone some way
tanks; Russian soldiers were soon being toward achieving that end. High
killed at the rate of 100 a day. In his commodity prices had given him a
memoirs, Yeltsin described the war as strong economy. He had also marginal-
the moment when Russia “parted with ized his political opposition at home,
one more exceptionally dubious but consolidating his power. Yet Russia’s
fond illusion—about the might of our relations with the West had worsened,
army . . . about its indomitability.” particularly concerning Ukraine. Ever
The first Chechen war concluded since the Orange Revolution of 2004–5,
unsatisfactorily in 1996. A few years Putin had worried that a pro-Western
later, Vladimir Putin, who became the government in Kyiv might seek to join
ailing Yeltsin’s prime minister in NATO, a fear aggravated when the issue
September 1999, decided to fight the was broached at NATO’s 2008 Bucharest
war again, but this time he made sure summit. The crisis, however, came in
that Russia was prepared. Putin had 2013, when Victor Yanukovych,
previously been head of the Federal Ukraine’s pro-Russian president, was
Security Service, or FSB, the successor about to sign an association agreement
to the KGB, where he began his career. with the EU. Putin put intense pressure
When apartment buildings in Moscow on Yanukovych until he agreed not to
and elsewhere were bombed in Sep- sign. But Yanukovych’s reversal led to
tember 1999, Putin blamed Chechen exactly what Putin had feared, a popular
terrorists (although there was good uprising—the Maidan movement—that
reason to suspect the FSB was seeking ultimately brought down Yanukovych
to create a pretext for a new war) and and left Ukraine completely in the
ordered Russian troops to gain control hands of pro-Western leaders. At this
of Chechnya by “all available means.” point, Putin resolved to annex Crimea.
Lawrence Freedman
In launching his plan, Putin had the enclaves in the Donbas, might be de-
advantages of a Russian naval base at feated by the Ukrainian army, the
Sevastopol and considerable support for Kremlin sent in regular Russian forces.
Russia among the local population. Yet Although the Russians then had no
he still proceeded carefully. His strat- trouble against the Ukrainian army,
egy, which he has followed since, was to Putin was still cautious. He did not
present any aggressive Russian move as annex the enclaves, as the separatists
no more than a response to pleas from wanted, but instead took the opportunity
people who needed protection. Deploy- to get a deal in Minsk, intending to use
ing troops with standard uniforms and the enclaves to influence Kyiv’s policies.
equipment but no markings, who came To some Western observers, Russia’s
to be known as the “little green men,” war in the Donbas looked like a potent
the Kremlin successfully convinced the new strategy of hybrid warfare. As
local parliament to call a referendum on analysts described it, Russia was able to
incorporating Crimea into Russia. As put its adversaries on the back foot by
these events unfolded, Putin was bringing together regular and irregular
prepared to hold back should Ukraine forces and overt and covert activities
or its Western allies put up a serious and by combining established forms of
challenge. But Ukraine was in disar- military action with cyberattacks and
ray—it had only an acting minister of information warfare. But this assess-
defense and no decision-making author- ment overstated the coherence of the
ity in a position to respond—and the Russian approach. In practice, the
West took no action against Russia Russians had set in motion events with
beyond limited sanctions. For Putin, unpredictable consequences, led by
the taking of Crimea, with hardly any individuals they struggled to control, for
casualties, and with the West largely objectives they did not wholly share.
standing on the sidelines, confirmed his The Minsk agreement was never imple-
status as a shrewd supreme commander. mented, and the fighting never stopped.
But Putin was not content to walk At most, Putin had made the best of a
away with this clear prize; instead, that bad job, containing the conflict and,
spring and summer, he allowed Russia to while disrupting Ukraine, deterring the
be drawn into a far more intractable West from getting too involved. Unlike
conflict in the Donbas region of eastern in Crimea, Putin had shown an uncer-
Ukraine. Here, he could not follow the tain touch as a commander, with the
formula that had worked so well in Donbas enclaves left in limbo, belonging
Crimea: pro-Russian sentiment in the to no country, and Ukraine continuing
east was too feeble to imply widespread to move closer to the West.
popular support for secession. Very
quickly, the conflict became militarized, UNDERWHELMING FORCE
with Moscow claiming that separatist By the summer of 2021, the Donbas war
militias were acting independently of had been at a stalemate for more than
Russia. Nonetheless, by summer, when it seven years, and Putin decided on a bold
looked like the separatists in Donetsk plan to bring matters to a head. Having
and Luhansk, the two pro-Russian failed to use the enclaves to influence
Lawrence Freedman
Kyiv, he sought to use their plight to pessimism, were more reluctant. Addi-
make the case for regime change in tional equipment, they concluded, was
Kyiv, ensuring that it would reenter likely to arrive too late or even be
Moscow’s sphere of influence and never captured by the Russians.
again contemplate joining either NATO Less noted was that the Russian
or the EU. Thus, he would undertake a troop buildup—notwithstanding its
full-scale invasion of Ukraine. formidable scale—was far from suffi-
Such an approach would require a cient to take and hold all of Ukraine.
huge commitment of armed forces and Even many in or connected to the
an audacious campaign. But Putin’s Russian military could see the risks. In
confidence had been boosted by Russia’s early February 2022, Igor “Strelkov”
recent military intervention in Syria, Girkin, one of the original Russian
which successfully propped up the separatist leaders in the 2014 campaign,
regime of Bashar al-Assad, and by recent observed that Ukraine’s military was
efforts to modernize Russia’s armed better prepared than it had been eight
forces. Western analysts had largely years earlier and that “there aren’t
accepted Russian claims about the nearly enough troops mobilized, or
country’s growing military strength, being mobilized.” Yet Putin did not
including new systems and armaments, consult experts on Ukraine, relying
such as “hypersonic weapons,” that at instead on his closest advisers—old
least sounded impressive. Moreover, comrades from the Russian security
healthy Russian financial reserves would apparatus—who echoed his dismissive
limit the effect of any punitive sanctions. view that Ukraine could be easily taken.
And the West appeared divided and As soon as the invasion got under-
unsettled after Donald Trump’s presi- way, the central weaknesses in the
dency, an impression that was confirmed Russian campaign became apparent.
by the botched U.S. withdrawal from The plan was for a short war, with
Afghanistan in August 2021. decisive advances in several different
When Putin launched what he parts of the country on the first day.
called the “special military operation” But Putin and his advisers’ optimism
in Ukraine, many in the West feared meant that the plan was shaped largely
that it might succeed. Western observ- around rapid operations by elite combat
ers had watched Russia’s massive units. Little consideration was given to
buildup of forces on the Ukrainian logistics and supply lines, which limited
border for months, and when the Russia’s ability to sustain the offensive
invasion began, the minds of U.S. and once it stalled, and all the essentials of
European strategists raced ahead to modern warfare, including food, fuel,
the implications of a Russian victory and ammunition, began to be rapidly
that threatened to incorporate Ukraine consumed. In effect, the number of axes
into a revitalized Greater Russia. of advance created a number of separate
Although some NATO countries, such wars being fought at once, all present-
as the United States and the United ing their own challenges, each with
Kingdom, had rushed military sup- their own command structures and
plies to Ukraine, others, following this without an appropriate mechanism to
Lawrence Freedman
coordinate their efforts and allocate Ukrainian approaches to command

resources among them. was stark. Putin’s original strategic
The first sign that things were not error was to assume that Ukraine was
going according to Putin’s plan was what both hostile enough to engage in
happened at the Hostomel airport, near anti-Russian activities and incapable
Kyiv. Told that they would meet little of resisting Russian might. As the
resistance, the elite paratroopers who invasion stalled, Putin appeared
had been sent to hold the airport for unable to adapt to the new reality,
incoming transport aircraft were instead insisting that the campaign was on
repelled by a Ukrainian counterattack. schedule and proceeding according to
Eventually, the Russians succeeded in plan. Prevented from mentioning the
taking the airport, but by then, it was too high numbers of Russian casualties
damaged to be of any value. Elsewhere, and numerous battlefield setbacks, the
apparently formidable Russian tank units Russian media have relentlessly
were stopped by far more lightly armed reinforced government propaganda
Ukrainian defenders. According to one about the war. By contrast, Ukrainian
account, a huge column of Russian tanks President Volodymyr Zelensky, the
that was destined for Kyiv was initially initial target of the Russian operation,
stopped by a group of just 30 Ukrainian refused offers from the United States
soldiers, who approached it at night on and other Western powers to be taken
quad bikes and succeeded in destroying a to safety to form a government in
few vehicles at the head of the column, exile. He not only survived but stayed
leaving the rest stuck on a narrow in Kyiv, visible and voluble, rallying
roadway and open to further attack. The his people and pressing Western
Ukrainians successfully repeated such governments for more support,
ambushes in many other areas. financial and military. By demonstrat-
Ukrainian forces, with Western ing the overwhelming commitment of
assistance, had undertaken energetic the Ukrainian people to defend their
reforms and planned their defenses country, he encouraged the West to
carefully. They were also highly moti- impose far more severe sanctions on
vated, unlike many of their Russian Russia than it might otherwise have
counterparts, who were unsure why done, as well as to get supplies of
they were there. Agile Ukrainian units, weapons and war materiel to Ukraine.
drawing first on antitank weapons and While Putin stubbornly repeated
drones and then on artillery, caught himself as his “special military opera-
Russian forces by surprise. In the end, tion” faltered, Zelensky grew in
then, the early course of the war was confidence and political stature.
determined not by greater numbers and Putin’s baleful influence also hung
firepower but by superior tactics, over other key strategic decisions by
commitment, and command. Russia. The first, following the initial
setbacks, was the Russian military’s
COMPOUNDING ERRORS decision to adopt the brutal tactics it
From the outset of the invasion, the had used in Chechnya and Syria:
contrast between the Russian and targeting civilian infrastructure,
20 F O R E I G N A F FA I R S
Why War Fails
including hospitals and residential The momentum had already swung

buildings. These attacks caused im- from Russia to Ukraine, and it could
mense suffering and hardship and, as not be turned around quickly enough to
could have been predicted, only meet Putin’s timetable. Some analysts
strengthened Ukrainian resolve. The speculated that Putin wanted something
tactics were also counterproductive in that he could call a victory on May 9,
another sense. Combined with the the Russian holiday marking the end of
revelations about possible war crimes the Great Patriotic War, Russia’s
by Russian troops in areas around victory over Nazi Germany. As likely,
Kyiv, such as Bucha, Russia’s attacks on though, was his and his senior mili-
nonmilitary targets convinced leaders tary commanders’ desire to make
in Washington and other Western capi- territorial gains in the east before
tals that it was pointless to try to Ukraine could absorb new weapons
broker a compromise settlement with from the United States and Europe.
Putin. Instead, Western governments As a result, Russian commanders sent
accelerated the flow of weapons to units that had just been withdrawn
Ukraine, with a growing emphasis on from the north back into combat in
offensive as well as defensive systems. the east; there was no time to replen-
This was not the war between Russia ish the troops or remedy the failings
and NATO claimed by Moscow propa- exhibited in the first phase of the war.
gandists, but it was rapidly becoming In the new offensive, which began
the next closest thing. in earnest in mid-April, Russian forces
A second key strategic decision made few gains, while Ukrainian
came on March 25, when Russia counterattacks nibbled away at their
abandoned its maximalist goal of positions. To add to the embarrass-
taking Kyiv and announced that it was ment, Russia’s Black Sea flagship, the
concentrating instead on the “complete Moskva, was sunk in an audacious
liberation” of the Donbas region. This Ukrainian attack. By May 9, there was
new objective, although it promised to not a lot to celebrate in Moscow. Even
bring greater misery to the east, was the coastal city of Mariupol, which
more realistic, and it would have been Russia had attacked mercilessly since
yet more so if it had been the initial the start of the war and battered into
aim of the invasion. The Kremlin also rubble, was not fully captured until a
now appointed an overall Russian week later. By that time, Western
commander to lead the war, a general estimates were suggesting that a third
whose approach would be more me- of the initial Russian combat force,
thodical and employ additional artil- both personnel and equipment, had
lery to prepare the ground before been lost. Rumors had circulated that
armor and infantry moved forward. Putin would use the holiday to
But the effect of these shifts was announce a general mobilization to
limited because Putin needed quick meet the army’s need for manpower,
results and didn’t give the Russian but no such announcement was made.
forces time to recover and prepare for For one thing, such a move would have
this second round of the war. been deeply unpopular in Russia. But
July/August 2022 21
Lawrence Freedman
it would also have taken time to get cessful combat experience, faltered so
conscripts and reservists to the front, badly. Before the invasion, when
and Russia would still face chronic Russia’s military was compared with
equipment shortages. Ukraine’s smaller and lesser-armed
After an unbroken string of poor defense forces, few doubted which
command decisions, Putin was running side would gain the upper hand. But
out of options. As the offensive in actual war is determined by qualitative
Ukraine completed its third month, and human factors, and it was the
many observers began to note that Ukrainians who had sharper tactics,
Russia had become stuck in an unwin- brought together by command struc-
nable war that it dared not lose. tures, from the highest political level
Western governments and senior NATO to the lowlier field commanders, that
officials began to talk of a conflict that were fit for the purpose.
could continue for months, and possi- Putin’s war in Ukraine, then, is
bly years, to come. That would depend foremost a case study in a failure of
on the ability of the Russian com- supreme command. The way that
manders to keep a fight going with objectives are set and wars launched by
depleted forces of low morale and also the commander in chief shapes what
on the ability of Ukraine to move from follows. Putin’s mistakes were not
a defensive strategy to an offensive unique; they were typical of those made
one. Perhaps Russia’s military could by autocratic leaders who come to
still salvage something out of the situa- believe their own propaganda. He did
tion. Or perhaps Putin would see at not test his optimistic assumptions
some point that it might be prudent to about the ease with which he could
call for a cease-fire so he could cash in achieve victory. He trusted his armed
the gains made early in the war before forces to deliver. He did not realize that
a Ukrainian counteroffensive took Ukraine was a challenge on a com-
them away, even though that would pletely different scale from earlier
mean admitting failure. operations in Chechnya, Georgia, and
Syria. But he also relied on a rigid and
POWER WITHOUT PURPOSE hierarchical command structure that
One must be careful when drawing was unable to absorb and adapt to infor-
large lessons from wars with their own mation from the ground and, crucially,
special features, particularly from a did not enable Russian units to respond
war whose full consequences are not rapidly to changing circumstances.
yet known. Analysts and military The value of delegated authority
planners are certain to study the war and local initiative will be one of the
in Ukraine for many years as an other key lessons from this war. But
example of the limits to military for these practices to be effective, the
power, looking for explanations as to military in question must be able to
why one of the strongest and largest satisfy four conditions. First, there
armed forces in the world, with a must be mutual trust between those at
formidable air force and navy and new the senior and most junior levels.
equipment and with recent and suc- Those at the highest level of command
Why War Fails
must have confidence that their and the weaker the discipline of those
subordinates have the intelligence and fighting. In these circumstances, local
ability to do the right thing in de- initiative can simply lead to desertion
manding circumstances, while their or looting. By contrast, the Ukrainians
subordinates must have confidence were defending their territory against
that the high command will provide an enemy intent on destroying their
what backing they can. Second, those land. There was an asymmetry of
doing the fighting must have access to motivation that influenced the fight-
the equipment and supplies they need ing from the start. Which takes us
to keep going. It helped the Ukraini- back to the folly of Putin’s original
ans that they were using portable decision. It is hard to command forces
antitank and air-defense weapons and to act in support of a delusion.∂
were fighting close to their home
bases, but they still needed their
logistical systems to work.
Third, those providing leadership
at the most junior levels of command
need to be of high quality. Under
Western guidance, the Ukrainian army
had been developing the sort of
noncommissioned officer corps that
can ensure that the basic demands of
an army on the move will be met,
from equipment maintenance to actual
preparedness to fight. In practice,
even more relevant was that many of
those who returned to the ranks when
Ukraine mobilized were experienced
veterans and had a natural under-
standing of what needed to be done.
But this leads to the fourth condi-
tion. The ability to act effectively at
any level of command requires a
commitment to the mission and an
understanding of its political purpose.
These elements were lacking on the
Russian side because of the way Putin
launched his war: the enemy the
Russian forces had been led to expect
was not the one they faced, and the
Ukrainian population was not, con-
trary to what they had been told,
inclined to be liberated. The more
futile the fight, the lower the morale
July/August 2022 23
answer lies in the very nature of

What the Mighty
WHAT IS POWER?
power itself. Leaders in positions of

tremendous authority often wear
Miss blinders that can cause them to make
profound mistakes. Power can mislead
insofar as it prevents the powerful
The Blind Spots of Power from taking full stock of the conse-
quences of their actions.
Ngaire Woods Putin’s assault on Ukraine has
demonstrated many of the pitfalls of
F
or two decades, Russian Presi- power. The powerful often imagine
dent Vladimir Putin has been themselves to be above the rules, and
both admired and feared as a Putin has sought to exempt himself
shrewd strategist, a strongman who has from international law, even as he has
cemented his rule at home and dog- deployed legal language to justify his
gedly advanced Russian interests actions. But in flouting international
abroad. Whether suppressing domestic law, Putin has eroded Russian secu-
opposition or annexing Crimea, Putin rity. Leaders often think they are
has appeared as an uncompromising stronger than they really are; in
and implacable leader. The Western Putin’s case, he misjudged the true
media may vilify him as a thuggish fighting prowess of his military,
autocrat, but numerous Western politi- plunging his country into a war of
cians have also admitted their respect attrition that some Russian planners
for Putin’s ability to command. had assured him would be a cakewalk.
His invasion of Ukraine in Febru- That failure may stem in part from
ary, however, has gone some way another pitfall of the powerful: an
toward undoing this reputation. Putin unwillingness to seek counsel and
assumed that he would win a quick countenance criticism. Putin did not
victory, but his forces have stumbled consult across his own government or
badly. The war has had terrible reper- with Russia’s neighbors and partners
cussions for Russia, devastating its in planning for the war and its after-
economy and its standing in the world. math, and the repercussions of that
The war has also galvanized an anti- mistake have hit Russia hard.
Russian coalition while winning little Putin’s mistakes are not unique to him,
support of any significance for the nor are they simply the results of the
Kremlin. Putin has turned Russia into bad habits of dictators. Leaders of all
a pariah state without achieving any of powerful states, including major
the goals of his invasion. democracies, have also been blinded by
Why would such a powerful leader power and made ill-advised decisions.
make such a major blunder? The Putin’s struggles in Ukraine should
remind all policymakers of the perils
NGAIRE WOODS is Professor of Global of power and how governments are
Economic Governance and Founding Dean of
the Blavatnik School of Government at the liable to make terrible errors when
University of Oxford. they are enamored of their own might.
Ngaire Woods
ABOVE THE LAW “material breach” of the cease-fire

Power often convinces its wielders that agreed to over a decade earlier. There-
they are exceptional, that the rules don’t fore, they asserted, the United States
apply to them. Putin’s invasion of and the United Kingdom had the right
Ukraine in February breached the code to suspend the cease-fire and to con-
enshrined in the un Charter that tinue hostilities against Iraq under the
prohibits any use of force against the original 1990 un Security Council
territorial integrity or political indepen- resolution. The United States also
dence of another state. The Russian asserted the right of preemptive self-
president has variously insisted that the defense in its strike against Iraq. Peter
incursion was a preemptive strike Goldsmith, the British attorney general
against a Ukrainian attack, a sacred at the time, disavowed these claims as a
defense of the Russian motherland, and basis for war, but the British position, as
a continuation of the Soviet fight expressed by a later attorney general,
against Nazism. These justifications Jeremy Wright, in 2017, moved closer to
ring hollow, of course. Putin’s claims the American one. International lawyers
that he is responding to ostensible remained skeptical that these justifica-
attacks by Ukrainian forces in the tions amounted to much more than
self-proclaimed republics of Donetsk window-dressing, a view echoed in 2016
and Luhansk, at border crossings, and by the findings of the Chilcot Inquiry,
on Russian territory are not persuasive the British government’s investigation
to anybody outside Russia. Still more of the country’s role in the war.
spurious and self-serving are his asser- The Iraq war represents a conun-
tions that Ukraine is committing drum. The United States and the United
genocide in Donbas and that its govern- Kingdom, two countries that had done
ment is stuffed with neo-Nazis. so much to set up the rules-based
Such delusional—or cynical—argu- international order, flouted its rules and
ments to justify violating international undermined that order. Why? Psychol-
law are not just the preserve of auto- ogy offers one answer. The powerful
crats. It is tempting to believe that often break the very rules they have
democracies have built-in protections made and from which they benefit
that stop policymakers from committing because they think they can. Psycholo-
flagrant breaches of the most founda- gists have found that wealthy people are
tional international legal norms. But more likely to lie and cheat when gam-
this is not the case. In 2003, U.S. and bling or negotiating, to cut people off
British forces invaded Iraq. U.S. Presi- when driving, and to endorse unethical
dent George W. Bush and British Prime behavior in the workplace. It is not that
Minister Tony Blair sought to legitimize the rich oppose the existence of rules:
the invasion by invoking international rules safeguard their property, enable
law, pointing to a 1990 un Security gambling, and make driving less danger-
Council resolution that authorized the ous for them. In fact, the rules are
use of force against Iraq after it invaded probably more advantageous to them
Kuwait and arguing that Iraq’s failure to than to others, since they have more
comply with weapons inspections was a property to protect, more leisure pur-
What the Mighty Miss
suits to enjoy, and a greater interest in its five permanent members—China,

preserving the status quo. But wealthy France, Russia, the United Kingdom, and
people’s status can lead them to believe the United States—whose unanimous
that their own needs and desires are consent is required for any enforcement
more important than any rules, so much action. Whereas weaker states that breach
so that they absolve themselves from the un Charter might be punished by the
complying with the rules altogether. Security Council, the permanent mem-
A similar phenomenon exists in bers can veto any Security Council
international relations. The leaders of enforcement action against themselves.
powerful states who are the creators, Effectively, they can act with impunity, or
enforcers, and beneficiaries of rules are so they might believe.
often tempted to break them. Of Great powers still pay costs for
course, international rules take many breaking these laws, even if they think
forms, from trade agreements to demar- they are shielded from repercussions.
cations of fishing rights. And not all The most obvious cost of falling afoul
rules are equal. International lawyers of the un Charter is that it signals to
debate with great sophistication why other countries that the violator cannot
states obey international law; utilitar- be trusted to abide by core interna-
ians point to the influential role of tional law. The fear could spread that
direct interests, Kantians to the weight other states will do the same, weaken-
of shared moral and ethical obligations, ing the resolve of all countries to
and the disciples of the English philoso- comply with the rules. The un Charter
pher Jeremy Bentham to the incentives constructs an international society to
created by the collective process of which states belong and in which they
building international law. Realists, can forge some baseline expectations
from the Renaissance-era Italian writer about the behavior of others. If the
Niccolo Machiavelli to Cold War–era most powerful break the very rules they
U.S. policymakers such as George have created, they end up undermining
Kennan and Henry Kissinger, insist and fundamentally threatening the
that certain rules can and should be bro- existence of that social order.
ken when it is in a state’s interest to do Consider the rival neighbors Argen-
so. But some rules command a particu- tina and Brazil, each of which has nuclear
lar legitimacy and force that make their capabilities it could weaponize. If one
breach more costly than the violation of acquired or developed nuclear weapons,
other ones. The un Charter is such a the other would likely follow suit.
rule, emanating from an instrument of Instead, they rely on nonproliferation
international law ratified by 193 coun- rules and carefully monitor each other’s
tries that codifies the most basic prin- compliance through the Brazilian-
ciples of international relations. Argentine Agency for Accounting and
This legal order anoints the powerful Control of Nuclear Materials. If Brazil-
by giving them special responsibilities for ian President Jair Bolsonaro espoused his
upholding it. Enforcement of the un son’s declared support for nuclear
Charter lies in the hands of the un weapons, it would change Argentina’s
Security Council and, more specifically, calculation, weakening the restraints on
July/August 2022 27
Ngaire Woods
behavior that the rules encourage. The British government has proposed
Violating such laws introduces an legislation in 2022 that does not comply
insidious kind of chaos into international with the withdrawal agreement it signed
relations. This is why the Chilcot In- with the European Union in 2019, a
quiry found that U.S. and British actions move that has paralyzed its own officials,
in 2003 dangerously undermined the who no longer know what parameters
authority of the United Nations. they are working within.
Putin’s rule-breaking during his Putin invaded Ukraine knowing
invasion of Ukraine has already re- that the un could do little to punish
dounded against him, hurting Russia. He him for violating its charter. The
had long accused the United States of leaders of the world’s most powerful
threatening Russian security by advanc- countries will sometimes be tempted
ing nato’s expansion toward Russia’s to flout international laws because they
borders. But until May, only five of the can. But they fail to see the true costs
14 countries bordering Russia were to their international relations and to
members of nato. Putin’s actions have their own governments.
changed those numbers. Finland and
Sweden have now applied to join nato, THE FOLLY OF STRENGTH
reversing long-standing policies of Power can also convince leaders that they
neutrality. Putin’s invasion has damaged are too strong to be constrained by any
Russian security by breaking the rules on rules. Putin’s early military moves in
which the neutrality of Finland and Ukraine suggest that he was counting on
Sweden had for so long been premised. a rapid victory. He commands one of the
International law plays an equally largest militaries in the world, with some
important role within governments, two million personnel and reservists and
where it provides guidance and guard- the largest arsenal of nuclear weapons.
rails to officials often working in condi- Russia’s military is experienced, having
tions of high pressure and uncertainty. It deployed in recent years in the interven-
cuts through ambiguity. It creates tion in Crimea, in covert operations in
predictability within and among govern- eastern Ukraine, and in supporting
ments. Disrupting that predictability Bashar al-Assad’s regime in Syria.
risks unraveling the order and discipline Further, Putin’s “New Look” military
of a government. When U.S. Defense modernization process, launched in
Secretary Donald Rumsfeld signaled 2008, and a rearmament program, begun
after the 9/11 attacks that the United in 2011, led him to believe that he had
States might not comply with the significantly improved Russian ground,
strictures of the Geneva Conventions, he naval, and air forces. In fact, these
thrust his government and armed forces programs were riddled with corruption
(already working in difficult situations) and inefficiency.
into a legal wilderness. This gray area Leaders of great powers can revel in
allowed egregious abuses, such as those the assembled might of their military.
committed by U.S. troops in Abu Ghraib They can measure their strength in
prison in Iraq, and greatly damaged the terms of the numbers of aircraft carri-
United States’ standing in the world. ers, attack submarines, advanced air-
craft, armored vehicles, and experienced the North Vietnamese and the Vietcong
divisions of troops they have at their were able to repulse far more powerful
disposal and the scope of their intelli- U.S. forces. He later concluded that
gence and cyber-capabilities. They Washington had underestimated the
imagine that they can easily flex their power of nationalism to motivate a
muscles to take control of a situation people to fight and die for their beliefs,
and shape the outcome of a conflict. values, and land. And it had underesti-
But over and over, the leaders of mated the corrosion of morale among its
great powers discover that they are own forces, who had no such motivation.
fantasizing. European colonial powers Putin has experienced this same dynamic
with overwhelming superiority in in his bungled invasion of Ukraine.
military capacity were beaten by The truth is that military power is
nationalist forces in the aftermath of better at achieving negative goals than it
World War II: the Dutch were expelled is at achieving positive goals. Force can
from Indonesia in 1949, and the French be effective in stopping an action, such
were ousted from Indochina by Viet- as one country invading or threatening a
namese nationalists in 1954 and from neighbor, as when the United States and
Algeria by Algerian nationalists in its allies rapidly drove Iraqi forces from
1962. The Americans tried in the 1960s Kuwait. But military power is not very
and 1970s to prevail in Vietnam. The good at forcing actors to do specific
Soviets fought and bled from 1979 to things. Achieving that requires a
1989 to no avail in Afghanistan, where long-term presence and a wider and
the Americans did the same after 9/11. more nuanced range of capabilities.
In 2003, the United States swiftly Although military intervention can
toppled Saddam Hussein in Iraq, but remove a regime, it cannot necessarily
the war quickly turned into a doomed guarantee a stable replacement. As the
occupation. Now, Putin is learning a United States and its allies discovered
similar lesson. The Russians moved in Afghanistan in 2001, in Iraq in 2003,
into Ukraine in February, assuming and in Libya in 2011, bringing down the
they would capture Kyiv in a matter of old system was the easy part; far harder
days; instead, Ukrainian forces have was building a new one. In Ukraine,
delivered a chastening reminder to Putin was convinced that the might of
Putin that his military is not nearly as the Russian military would allow him to
effective as he thought it was. achieve his political goals through an
Robert McNamara, the former U.S. invasion. In hindsight, that conviction
secretary of defense, suggested in his looks terribly misguided.
1995 book, In Retrospect: The Tragedy and
Lessons of Vietnam, that great powers fail LONELY AT THE TOP
to see the inevitable limitations of their Just as power can make leaders think
sophisticated and ultramodern militaries they are stronger than they actually are,
when confronting unconventional so, too, can it isolate them and encour-
insurgencies led by popular, highly age them not to listen to others. In
motivated groups. As McNamara preparing to attack Ukraine, Putin
discovered while running the Pentagon, seemed to have refused to consult in
July/August 2022 29
Ngaire Woods
any meaningful way with his subordi- meetings in favor of informal one-on-
nates, including his spy chief, Sergei one chats with each cabinet minister.
Naryshkin, whom he humiliated on Without properly circulated papers and
national television just days before the formal collective meetings, it was
invasion. The spectacle exposed how difficult for the ministers to bring to
difficult it would be for someone to bear the views of different parts of the
criticize Putin’s plans and still retain government or to challenge the prime
influence in his inner circle. As the minister’s view. This informality re-
invasion began to go wrong, The Times duced the scope for informed collective
of London reported that Putin had political judgment, according to the
removed eight Russian generals and findings of the 2004 Butler Review, a
fired 150 officers of Russia’s Federal government investigation into the
Security Service, the country’s principal intelligence behind the claims that
security agency, imprisoning its former Saddam possessed weapons of mass
chief. By mid-March, Ukrainian media destruction. The result was an ill-
outlets were claiming that he had also advised decision to go to war.
fired and detained Roman Gavrilov, the The powerful make a grave mistake
deputy chief of the Russian national by refusing to countenance dissenting
guard. Putin has cut himself off from views. Putin was probably not prepared
accurate information and instead for the various reactions his invasion
surrounded himself with people who would incur. Soon after his forces moved
tell him what he wants to hear. into Ukraine, Russia was hit with un-
Putin’s isolation from his lieutenants precedented economic sanctions. The
can appear absurd; the unusually long intensity of the penalties and their
table he often sits at for meetings only expeditious application surprised many,
highlights his remove from others. His as did the speedy withdrawal of Western
disdain for his lieutenants is palpable. companies from Russia. The ruble
But democratic leaders can also be crashed, the Russian stock market closed,
guilty of such behavior. Heads of the and Russians began to line up at atms to
world’s most well-established democra- withdraw U.S. dollars from their bank
cies have at times ignored or even accounts. Russia’s economy is expected
humiliated their cabinets. In a 2019 to contract by at least 11 percent this
article for The New York Times, James year. The sanctions increasingly isolate
Comey, the former director of the fbi, Russia, depriving it of the imports it
chillingly described how U.S. President needs for its own economy to function,
Donald Trump co-opted Comey’s including microchips, other high-tech
colleagues into a silent circle of assent. goods needed in producing advanced
In Comey’s words, “Mr. Trump eats weaponry, and even shirt buttons.
your soul in small bites. It starts with Only a handful of leaders, whose
your sitting silent while he lies, both in countries are highly dependent on
public and private, making you com- Russia, issued statements of support.
plicit by your silence.” In a much subtler These included Myanmar’s generals,
way, Prime Minister Blair, ahead of the who rely on Moscow as an arms sup-
Iraq war, eschewed formal cabinet plier; Venezuelan President Nicolás
Maduro, who cited Russia’s supposed will simply fall in line behind them. An
encirclement by hostile forces; and effective sanctions regime will take ongo-
Nicaraguan President Daniel Ortega, ing diplomacy, negotiation, and compro-
who supported Putin’s right to recog- mise with a wide variety of countries. It
nize the two Moscow-backed separatist will need to be built on common inter-
regions in Ukraine. Such backing hardly ests. Most countries share an interest in
constitutes a helpful vote of confidence. upholding the sovereignty of Ukraine.
Russia’s most important friends But they balk at the goal, expressed by
seemed taken aback by the invasion. U.S. Secretary of Defense Lloyd Austin
China initially recognized the impor- in late April, of weakening Russia. The
tance of Russia’s security concerns, but prospect of a coalition setting out to
Chinese President Xi Jinping later said weaken another sovereign state fills some
he was “pained to see the flames of war with the fear that they might be next.
reignited in Europe.” India abstained in Wider international cooperation will
votes to condemn Russia at the un, but take more inclusiveness and a more
the Indian government later issued disciplined focus on action in areas for
sharper and critical statements uphold- which there is broad agreement.
ing the principle of national sover- Sanctions against Russia were
eignty. Serbia, normally close to Russia, imposed at first by a coalition of the
even voted to condemn the invasion in willing, consisting primarily of Western
the un. Israel, another Russian partner, countries. But many countries, includ-
called Russia’s move “a serious violation ing some democracies, did not immedi-
of the international order.” Turkish ately fall in behind the coalition. In
President Recep Tayyip Erdogan said March, 141 countries voted in favor of
that Moscow’s military actions the un General Assembly resolution
amounted to a “heavy blow” to regional that condemned the Russian invasion.
peace and stability. The leaders of Although just five states voted against
Kazakhstan, Kyrgyzstan, Tajikistan, and it, some 35 abstained. Coming just two
Uzbekistan, post-Soviet countries that weeks after a summit between the eu
Putin imagines in Russia’s orbit, refused and the African Union at which Euro-
to back the Russian intervention. Putin peans showcased their willingness to
may well have thought he did not need invest in and assist the continent, it was
to round up his allies to support his notable that 18 African countries were
invasion. After all, he essentially got among the abstainers. Publicly, many of
away with annexing Crimea in 2014. Yet them have voiced skepticism about the
as sanctions bite, and the Kremlin principles being invoked by the Western
feels increasingly hemmed in, Putin has powers. South African officials have
scrambled to find support. accused the eu of double standards and
No doubt Putin underestimated how called for it to condemn aggressors in
profoundly his invasion of another other cases such as the Israeli-
sovereign country would rankle the Palestinian conflict and the war in
world. But the United States and its Yemen. Other African commentators
allies who wish to sanction him would be have pointed out that wars in Africa do
mistaken to assume that other countries not get the same attention as those in
July/August 2022 31
Ngaire Woods
other parts of the world. These con- sion of Russia from the un Human
flicts typically elicit statements of Rights Council suggests that they
concern and the dispatch of special could veto any attempt to expel Russia
envoys but no wall-to-wall media from the imf. They command about
coverage, no impassioned televised 30 percent of the votes in the imf,
statements from global leaders, no which are distributed according to the
enthusiastic offers of help. size of a country’s economy.
Beneath the rhetoric, powerful The United States, the G-7, and the
interests are at stake. The past two eu are moving fast to widen their
decades have seen both China and economic sanctions on Russia. But their
Russia actively engage with countries attempts to get other rising powers to
across Africa. China has overtaken the join them have been less successful.
United States as the world’s largest Their blind spot is an overestimation of
direct investor in Africa. Russia is now their position in the world. They have
the source of half of all arms coming clung too long to the idea that the G-7
into Africa, and it increasingly provides countries are the rule-makers and the
military and security assistance to the rest are the rule-takers, even as the
Central African Republic, Libya, Mali, global balance of economic power has
Mozambique, and Sudan. Many devel- shifted. Countries outside the G-7 now
oping countries are thus wary of have other ideas, and they have reason to
joining a U.S.-led coalition of the doubt the intentions of powerful coun-
willing against Russia. A “coalition of tries that have often failed to abide by
the rest” was even more in evidence in the very rules they’ve set. The United
April, when a special emergency States and other G-7 members must be
session of the un General Assembly wary of dividing the world into good
was called to expel Russia from the un guys and bad guys, democracies and
Human Rights Council. Seven G-20 authoritarian regimes, lest they become
countries did not vote with the United blind to the concerns of other countries
States. Twenty-four countries voted that don’t see the world in the same way.
against the resolution and 58 countries
abstained from the vote, including SEEING CLEARLY
Brazil, India, Mexico, Saudi Arabia, But these blind spots are not inevi-
and South Africa. Only ten African table, nor are democracies doomed to
countries voted with the United States. them. The leaders of powerful coun-
The coalition of the rest has the tries can protect themselves from the
power to thwart other international pitfalls of power and make sure that
actions. For example, Ukrainian short-term expediency doesn’t get in
President Volodymyr Zelensky has the way of the big picture.
called on the International Monetary A first line of defense from error lies
Fund to expel Russia. But this would in the group around a leader. Russia,
require an 85 percent vote in favor of the United Kingdom, and the United
expulsion in the imf. A simple tally of States each have a cabinet comprising
the voting power of the countries that ministers who are selected by the head
abstained or voted against the expul- of government. China has the Politburo
Standing Committee. In theory, these consult with Russia’s other major

bodies take collective responsibility for trading partners and neighbors in
the decisions a government makes. crafting a response to Putin’s invasion.
That needs to happen in practice. International cooperation is becom-
Beyond the cabinet, other institutions ing both more important and more
need to be fully functioning. Public difficult: more important so as to limit
officials and technocrats, the courts, war, stop climate change, and mitigate
legislatures, the media, and public the perfect storm of debt, famine, and
opinion each play a role in making sure economic retrenchment now hitting the
the leader is not blinded by power. poorest in the world and undoing
In Russia, these secondary institu- decades of progress on health, educa-
tions have been steadily brought tion, and opportunity; more difficult
under Putin’s control, sweeping away because of tensions between China and
restraints on his power. The economist the United States and the international
Sergei Guriev and the political scientist political divisions arising from Russia’s
Daniel Treisman have studied the way invasion of Ukraine. Even the G-20
Putin controls his citizens by distorting finance ministers and the policy-setting
information and simulating democratic body of the imf—two forums that can
procedures. Along with Erdogan and usually be relied on to issue an agreed
Hungarian Prime Minister Viktor statement (however anodyne) during
Orban, Putin is one of a new breed of moments of global tension—failed to
media-savvy strongmen whom Guriev find that consensus in their April
and Treisman call “spin dictators.” meetings in Washington.
Governments need institutions that Yet international cooperation can
protect against politicians who find it still offer vital restraints to leaders
expedient to politicize the judiciary and blinded by power. Convinced of their
browbeat, threaten, and fire their civil own unarguable influence on the world
servants and technocrats for truth stage, heads of powerful states are
telling. The leaders themselves need often tempted to take the fast and
these checks and balances so that seemingly easy and decisive route to
someone will tell them when the em- achieving their aims, however reckless
peror is wearing no clothes. it may be. Diplomacy and open discus-
International relations and institu- sion with other countries can provide
tions also play an important role in information, perspective, and, indeed,
preventing a powerful leader from a check on the actions of a leader. At
miscalculating. The 2021 U.S. with- this volatile juncture in world politics,
drawal from Afghanistan might have leaders should commit to a back-to-
gone better had Biden chosen to act basics approach centered on adherence
multilaterally, not unilaterally. In the to the core un Charter. They should
pressure and urgency of the moment, eschew broader interventionist agendas
blinded by the significance of the that lack global support. The clarity of
decision, the administration failed to international law will help even the
adequately consult and coordinate with most powerful actors see clearly.∂
allies. Likewise, Western leaders should
July/August 2022 33
Left out in such accountings of power

The Perils of
WHAT IS POWER?
is a crucial factor: expectations about

the future and whether state leaders
Pessimism believe in an optimistic or a pessimis-
tic destiny for their country. If leaders
believe the future looks unfavorable,
Why Anxious Nations Are they will be tempted to take risky
Dangerous Nations actions in the present to forestall
further decline, which can lead to arms
Daniel W. Drezner races and brinkmanship during crises.
In contrast, optimistic leaders foresee
a brighter future ahead for their
T
he dirty secret about interna- country and thus favor strategic
tional relations is that although patience, which tends to produce
everyone agrees about the investments in global governance.
importance of power, no one can agree The United States and its allies and
on how to define or measure it. There partners have been pleasantly surprised
are occasional moments when a consen- by the trajectory of the war in Ukraine,
sus exists about the distribution of which many believed Russia would win
power: think of U.S. hegemony a easily and quickly. Unfortunately,
generation ago. There are more mo- however, this sense of optimism might
ments when the relative strength and prove fleeting—and, needless to say, it
influence of the great powers remains is hardly shared by Moscow and Bei-
unclear: think of the last decade of jing. Indeed, it is possible to envision a
international politics, which was shaped scenario in which the conflict in
by multiple competing narratives about Ukraine makes the whole world even
the rise of China and the decline of the more pessimistic about the future,
United States. And there are moments which could mean a much greater
when the entire question of interna- likelihood of great-power war.
tional power is put to the test: think of
times when major wars break out, such GREAT EXPECTATIONS
as the one currently being fought Power is the currency of world politics,
between Russia and Ukraine. but there is little agreement in either
People commonly think of power as scholarly or policy circles about how to
a country’s ability to force others to do define it. An easy way to illustrate this
what that country wants. Experts is to list all the adjectives applied to the
usually measure it by looking at term, such as “soft,” “sharp,” “social,”
military might or GDP. But these are at “structural”—and those are just the
best partial—and at worst biased— modifiers that start with the letter s.
views. And they reveal very little From issue to issue, actor to actor, the
about how a state may or may not act. definition of power applied varies.
One reason for these conflicting
DANIEL W. DREZNER is Professor of Interna-
tional Politics at the Fletcher School of Law and perspectives is that foreign policy
Diplomacy at Tufts University. leaders make different assumptions
Daniel W. Drezner
about the future, and those assump- tive. An international system rife with
tions, in turn, determine which dimen- disaster, plague, limited economic
sions of power matter. Some forms of growth, and violence is one that forces
influence are valuable in the here and greater attention on the short run. In
now, including military force and other words, for most of the history of
economic coercion. But although they international relations, a short-term
are essential in a crisis, these forms of perspective made complete sense.
power often create counterproductive More recently, however, better global
security dilemmas. When a great power conditions have made it possible for
increases its military budget, even for leaders to see a more favorable future.
defensive purposes, challengers feel The end of the Malthusian trap—the
compelled to respond in kind. belief that human population growth was
Other forms of influence work more limited by agricultural output—and the
slowly. Economic networks and security beginning of the Industrial Revolution
frameworks are not created overnight. heralded an era in which people could
Building global governance structures, legitimately believe that better days lay
such as the Bretton Woods institutions ahead. Average human life expectancy
and the Nuclear Nonproliferation increased from under 30 years in 1800 to
Treaty, is a painstaking task that can more than 70 years in 2015. Over
take years. Soft power—that is, the abil- roughly the same time period, the child
ity of one country to persuade other mortality rate plummeted by a factor of
countries to want similar ends—can ten. A world in which everyone was
take generations to develop and exer- becoming healthier and wealthier
cise. But these forms of power have their suggested a brighter future.
advantages. They are self-reinforcing; These trends have been nearly
once they are established, it is difficult universal. Individual countries, how-
for a challenger to create alternatives. A ever, vary in their relative optimism or
leader who does not think too far into pessimism about their future power.
the future will not care about these Policymakers in countries with robust
means of influence, because the rewards and sustainable birthrates and minimal
from investments in them are not outward migration could interpret those
immediate enough to matter right away. indicators as a sign that their state is on
A leader who does think about the the upswing. Below-replacement
future, by contrast, will be willing to birthrates and elevated outward migra-
absorb short-term costs to invest in tion might signal the opposite. Simi-
the tools of power that will prove larly, countries that experience either
valuable in the long run. rapid economic growth or sustained
Whether foreign policy leaders take a stagnation could project those same
short-term or a long-term view of power patterns into the future. In general, one
depends on a number of factors. If would expect states with strong growth
leaders believe the world they inhabit is trends relative to their peer competitors
a Hobbesian one, in which life is “poor, to be optimistic about the future.
nasty, brutish, and short,” they cannot Significant policy outcomes, whether
afford the luxury of a long-term perspec- positive or negative, could also affect
Daniel W. Drezner
expectations about the future. Coun- believe that the future distribution of
tries that win wars are likely to be power will be worse for their country
confident about their future ability to than the present distribution. These
confront traditional security threats. actors see an unfavorable future and
Countries that lose wars have little may feel the need to take immediate
choice but to commit to building action to forestall decline.
short-term military power, fearing
further setbacks on the battlefield. THE LONG VIEW
Observable information can inform Pessimistic governments cannot focus
countries’ temporal expectations: a too much on the distant future because
booming economy is usually a good they believe they must act in the
omen. Nonetheless, in most contexts, present to avoid a more dangerous
the future is uncertain. Even suppos- world. Under these circumstances, what
edly objective information can provide matters are so-called kinetic capabili-
contradictory or confusing signals. The ties—instruments of statecraft that can
real significance of China’s economic be used immediately to change the facts
growth rate or the importance of the on the ground as quickly as possible.
U.S. dollar to global trade, for in- Leaders of these states will therefore
stance, remains hotly contested. Put focus most of their attention on existing
another way, material metrics can go military and economic resources and
only so far toward reducing uncer- active efforts to increase them. Initia-
tainty about what lies ahead. tives by other countries to augment
Foreign policy elites cope with this their soft power or develop alternative
uncertainty by fashioning coherent networks or institutions might get
narratives about whether the future is noticed by these leaders, but they will
favorable or unfavorable to their coun- provoke less concern. Leaders focused
try’s interests. Ideologies such as on the here and now will not prioritize
Marxism and liberal internationalism, such long-term threats.
for instance, rest on visions of progress By contrast, governments with
based on certain actors inexorably rising positive expectations about the future
to power and prosperity. More pessi- have confidence in their continued
mistic narratives include historical national ascent. This enables a longer
cycles of rising and falling or of termi- time horizon, allowing policymakers
nal decline, violence, and rebirth. to invest in forms of power that take
Strategic narratives about the more time to pay off: global gover-
future vary, but they tend to take one nance, cultural diplomacy, long-standing
of two rough forms. Actors with alliances and partnerships, pie-in-the-
positive expectations believe that the sky technological innovations, and so
future distribution of power will be forth. These forms of power require
better for their country than the substantial investment and time to
present distribution. In other words, develop, but the rewards are signifi-
the future is favorable, and events will cant. Optimistic expectations also
reward strategic patience. Actors with mean that these states can apply an
negative expectations, by contrast, ambitious definition of power in
The Perils of Pessimism
assessing others’ capabilities. They force when confronting a revisionist

will notice what other great powers rival, whose efforts to challenge the
are doing across many dimensions of existing security order would appear
power, not just military might. As the more like acts of self-sabotage than
sociologist Steven Lukes has ex- genuine threats. As such, optimistic
plained, “The wider the scope of hegemons take some precautionary
what, in the view of one’s conceptual measures to ensure that revisionist
framework, is going to count as powers cannot threaten their core
power, the more power in the world security interests, but they focus pri-
one will be able to see.” marily on inducing smaller states to
The extent to which great powers accept the existing rules of the game.
are optimistic or pessimistic about the Established powers with long time
future has profound effects on their horizons pay greater attention to rising
present-day strategies. A world of great powers that invest in nonmilitary
powers that are optimistic about the capabilities, such as soft power, which
future will have arenas of confrontation might pose real risks in the far future.
but little war. These confident great The 1990s offered a good example of
powers will invest in resources designed these dynamics. U.S. policymakers
to attract as well as coerce, suggesting a imbibed the political scientist Francis
contested but relatively pacific world. Fukuyama’s “end of history” thesis,
A world of pessimistic great powers, which posited that there were no longer
however, will lead to an emphasis on any universal ideological challengers to
military capabilities and a temptation liberal, free-market democracy. The
to engage in preventive action. Milita- international relations theorist Joseph
rized disputes are far more likely in a Nye’s argument that the United States
pessimistic world, where the role of possessed an abundance of soft power
force matters the most. further brightened the outlook. Faith in
Consider the dynamic between a democratization and the so-called
rising power and an established one. Washington consensus regarding
For both actors, the belief that better neoliberal economic development
days are coming will alter their threat bolstered U.S. confidence, as well.
perceptions. For the rising power, such Owing to this optimism, it is not
optimism makes it seem unnecessary to surprising that the United States chose
immediately invest in military capabili- to engage, rather than confront, poten-
ties, which could run the risk of trigger- tial rivals such as China.
ing an unnecessary conflict. Anything Nor is it surprising that China
that provokes a preemptive response welcomed this engagement. By embrac-
from established powers is undesirable. ing globalization, China saw its econ-
And why risk upending a tolerable omy grow at an extraordinary clip.
status quo if revisionist steps would be Beijing’s expectations for the future
even easier in the future, when the were also positive, represented by the
distribution of power is more favorable? Chinese leader Deng Xiaoping’s cau-
Optimism would also make an tious advice for the country: “Observe
established power less likely to use calmly; secure our position; cope with
July/August 2022 39
Daniel W. Drezner
affairs calmly; hide our capacities and expectations about the future given
bide our time; be good at maintaining a Russia’s even more rapid accumulation
low profile; and never claim leadership.” of power. By 1912, the Prussian General
China had good reasons to refrain from Staff had come to fear that in less than
pursuing explicitly revisionist aims five years, Russian capabilities would be
during this period, as Beijing expected too great to counter. This led German
a rosy future. It was not in China’s strategists to advocate launching a
interests to directly challenge the preventive war before Germany’s
liberal international order, since that window of opportunity to dominate
could mean being cut off from its continental Europe closed. In short,
benefits. Both Beijing and Washington Europe was consumed by pessimism.
therefore invested more in long-term All the great powers engaged in furious
global governance and soft power. rearmament strategies, and most of
Military power was always present, but them engaged in trade wars. This
it was not the policy option of first environment resembled an overgrown
resort for either great power. forest cluttered with kindling and
A world in which great powers parched by drought. All it took was a
have pessimistic expectations of the random spark—the assassination of an
future is far more dangerous. In that archduke—to set it afire.
instance, actors pay attention to
military capabilities above all else. THE AGE OF PESSIMISM
Unlike other forms of power, after all, During the first two decades of the
military force can be quickly deployed twenty-first century, China continued
during a crisis. A rising power, fearing to act as an optimistic great power. The
a limited window for ascent, could Chinese economy was growing rapidly,
choose to acquire military resources to Beijing’s security environment was
maximize its temporary advantage and improving, and the country’s citizens
prevent it from once again falling were becoming more educated than
behind. An established hegemon, also ever before. (Even today, public opin-
fearing a diminished future, might ion polling suggests that the Chinese
react negatively and precipitate a are more optimistic about the future
military dispute out of a belief that its and more confident that their country is
power will only decrease as time goes headed in the right direction than are
on. For two pessimistic states, delay the people in any other major econ-
increases the risk of catastrophe. omy.) This self-assurance fostered
The classic example of this dynamic strategic patience and a focus on the
at work is the prelude to World War I. long term. Beijing sponsored Confucius
On the eve of that conflict, the United Institutes abroad to bolster its image
Kingdom was the most powerful and soft power. It invested in a long-
country in the world. British policy- term diplomatic strategy to reduce
makers, however, were extremely Taiwan’s international recognition. It
concerned about Wilhelmine Germa- developed wedge issues to play the
ny’s rapid rise, particularly its naval United States and the European Union
expansion. Berlin, in turn, held negative off each other, all while generating
goodwill in the “global South.” China
began creating global governance
structures that could potentially chal-
lenge the liberal international order,
including the New Development Bank,
the Asian Infrastructure Investment
Bank, and the Belt and Road Initiative.
Over the same period, U.S. expecta-
tions darkened. The 9/11 terrorist
attacks, the disastrous Iraq war, and the DIPLOMACY
2008 financial crisis all challenged
Americans’ faith in the future. Accord-
CASE
ing to Gallup polling data, the last time STUDIES
a majority of U.S. respondents be-
lieved that their country was headed in
the right direction was January 2004. Bring the
A quick review of recent presidential
REAL WORLD
inaugural addresses hints at this escalat-
ing pessimism. In 2009, amid an eco- to your classroom
nomic crisis and war, U.S. President
Barack Obama stressed the need to foreign policy
“begin again the work of remaking International organizations
America.” President Donald Trump’s Conflict resolution
rhetoric in 2017 was more hyperbolic, Terrorism and security
decrying the “American carnage” of the Global ealt
previous eight years and promising to
“protect our borders from the ravages of International trade
other countries making our products, Women, peace, and security
stealing our companies, and destroying And more.
our jobs.” In his inaugural address in
2021, President Joe Biden acknowledged Instructors: Join our Faculty Lounge
that “few periods in our nation’s history
for free access to this unique online
have been more challenging or difficult
than the one we’re in now.” library of over 250 case studies and
Despite growing U.S. pessimism, simulations — and make diplomacy
China largely managed to avoid con- part of your course
frontation. By acceding to the U.S.-led
“war on terror,” China was able to rise
while the United States stayed focused casestudies.isd.georgetown.edu
on more immediate dangers. China
was also patient enough to invest in
global governance structures that few
U.S. officials viewed as imminent
threats. Beijing’s future looked bright,
12 advertising space - long.indd 1 7/14/2017 2:31:53 PM
July/August 2022 41
Daniel W. Drezner
so it felt no need to immediately There are at most a few years [for

challenge U.S. hegemony. China China] to act before growth runs out.”
needed only to bide its time. These trends are a cause for concern.
As Chinese leader Xi Jinping consoli- Relations between countries are most
dated his grip on power, however, unstable when all the leading powers
Beijing’s optimism began to wane. have pessimistic expectations—a situa-
China has had below-replacement tion that threatens to characterize the
birthrates for 30 years, and recent coming decade of great-power politics.
government efforts to boost these China and the United States have
numbers have fizzled. China’s popula- adopted negative worldviews, and there
tion just recorded its slowest annual is reason to fear that their outlooks could
growth rate in decades, and its migrant darken even further. Both countries are
worker population fell in 2020 for the getting older. Immigration to the United
first time since data collection began. States, the traditional source of demo-
Compared with the United States, graphic strength for the country, has
China faces a severe demographic dried up, according to the U.S. Census
crunch. It now seems likely that the Bureau. By one estimate, there are
country will grow old before it grows currently 1.8 million fewer working-age
rich. At the same time, China’s draco- immigrants in the United States today
nian zero-covid policies have soured than there would have been if pre-2020
public opinion in urban areas such as immigration trends had continued. Even
Beijing and Shanghai. more disconcerting, ongoing systemic
China’s economic outlook has also shocks—the COVID-19 pandemic, finan-
become more bearish in recent years. cial turmoil, global supply chain bottle-
Although the country’s growth between necks, political polarization—will only
2000 and 2010 was extraordinary, its feed a crisis mentality that invites
slowdown over the past decade has short-term thinking.
been equally sharp. China’s GDP growth
has fallen from a peak of 14 percent in LOOK ON THE BRIGHT SIDE
2007 to something closer to two per- Pessimism is also a major contributing
cent in 2020. China’s total productivity factor to the war in Ukraine. For all his
growth has decreased by half since the talk about restoring Russian greatness,
2008 financial crisis, prompting the Russian President Vladimir Putin has a
political scientist Denny Roy to de- pessimistic worldview, and this explains
scribe China as a “low productivity his decision to invade. Russia’s 2014
superpower.” China’s debt-to-GDP ratio, interventions in Crimea and eastern
moreover, is nearly three times that of Ukraine backfired badly. Instead of
the United States. The country’s future returning to the Russian fold, Ukraine
economic growth looks even less responded by bolstering its military
promising given Xi’s failed reform capabilities and drawing closer to NATO
efforts. As the economist Daniel Rosen and the European Union. As Ukraine’s
observed in these pages in 2021, “An westward drift accelerated, Putin felt he
honest assessment of recent setbacks had to act quickly—and with military
suggests that time is running out. . . . force—before Kyiv completely escaped
The Perils of Pessimism
Russia’s sphere of influence. As an has demonstrated policy competence

anonymous Western intelligence official during a global crisis. Ukraine’s stout
explained to the BBC, Putin “felt like he resistance and its identification with
had a closing window of opportunity.” Europe and the United States have
The surprising course of the war has reminded everyone, including Ameri-
likely further fed Putin’s pessimism— cans, that U.S. soft power and struc-
and encouraged pessimism in Beijing, as tural power persist. After decades of
well. Chinese officials probably ex- rhetoric about American decline and a
pected a fractured and ineffectual democratic recession, U.S. policymak-
Western response to Russia’s war. Little ers can now speak of restored alliances
wonder that Xi agreed to a “friendship and a determination to strengthen the
without limits” with Putin in the run-up liberal international order. Perceptions
to the invasion. After months of war, of U.S. hegemony might be starting to
however, China’s position looks much shift in a more favorable direction.
more vulnerable. Beijing’s support for If American officials believe that the
Russia has left its Asian neighbors more future will be more favorable than the
wary of Chinese intentions. To assist present, then perhaps they can focus on
Ukraine, moreover, the United States reinforcing the liberal international
and its allies have unleashed an array of order that has advanced U.S. interests
economic, military, and intelligence for decades. Less concerned about
measures that have severely limited immediate threats, Washington might
Russian capabilities. It is impossible for be able to reemphasize long-term
Chinese officials to look at the difficulty objectives, such as reversing democratic
Russia is having subduing its neighbor backsliding and building a resilient set
without considering the parallels with of rules for the twenty-first-century
Taiwan. If Xi fears that his window of global economy. Despite rising Chinese
opportunity is closing for forced unifica- pessimism, a strong United States,
tion, he could act preventively. confident in its future and its role in the
The key question is whether the world, could retake its historic position
conflict in Ukraine will lead the United within the international system. An
States to adopt more positive expecta- optimistic United States will fortify
tions about its future. Over the past international institutions and offer a
two decades, terrorist attacks, financial bridge to countries in the global
crises, and political polarization have South—including China—that are
eviscerated American optimism. Rising interested in joining the order as
inflation and goods shortages threaten responsible stakeholders. If, however,
to further exacerbate U.S. pessimism. the great powers succumb to pessimism,
If policymakers fear that the country’s then all bets are off, and the world will
power and influence are on the wane, face a dangerous decade.∂
then the potential for great-power war
will rise considerably.
Successful U.S. support for Ukraine
could be a game-changer, however. For
the first time in years, the United States
July/August 2022 43
in Iraq and the steep rise in anti-

The Balance of
WHAT IS POWER?
American sentiment in the Middle East

and beyond, Nye insisted that soft power
Soft Power was not merely complementary to hard
power but indispensable to it. “When we
discount the importance of our attractive-
The American and Chinese ness to other countries, we pay the price,”
Quests to Win Hearts he argued in his 2004 book, Soft Power,
and Minds urging a more deliberate deployment of
public diplomacy. Such arguments held
little sway in the George W. Bush admin-
Maria Repnikova istration but were later embraced by the
Obama administration; in 2013, an article
in these pages described Obama’s first top
I
n the post–Cold War era, few diplomat, Hillary Clinton, as “the soft-
concepts have more profoundly power secretary of state.” The soft-power
shaped discussions of U.S. foreign pendulum swung again under the more
policy than the idea of “soft power.” hawkish and less internationalist adminis-
The term was coined by the American tration of President Donald Trump and
political scientist Joseph Nye in his once again when President Joe Biden took
1990 book, Bound to Lead, in which he office, pledging to restore the country’s
defined it as “getting others to want moral stature and to “lead not merely by
what you want.” But Nye wasn’t just the example of our power but by the
trying to illuminate an element of power of our example.”
national power. He was also pushing Amid these swings in policy over the
back against arguments that the United past two decades, the concept of soft
States was facing an impending decline. power only grew in prominence, popu-
To the contrary, Nye argued that larized by a legion of pundits who used
alongside its military prowess and it as a shorthand for describing the
economic strength, the United States cultural contours of Pax Americana.
enjoyed a massive advantage over any “America’s soft power isn’t just pop and
potential rivals thanks to its abundant schlock; its cultural clout is both high
soft power, which rested on “intangible and low,” the German commentator
resources: culture, ideology, [and] the Josef Joffe wrote in a characteristic invo-
ability to use international institutions cation of the idea in 2006. “It is grunge
to determine the framework of debate.” and Google, Madonna and MoMA,
The idea of soft power gained traction Hollywood and Harvard.”
in the 1990s but was tested in the United The concept’s fluidity and the idea
States in the years after the 9/11 attacks in that soft power gave the United States a
2001. Following the disastrous U.S. war leg up in its path to hegemony have also
made the notion enticing to thinkers
MARIA REPNIKOVA is an Associate Professor and leaders in many other countries and
in the Department of Communication at
Georgia State University and the author of regions. And among the places where
Chinese Soft Power. the concept of soft power has been most
Maria Repnikova
enthusiastically embraced is in China. Jinping has promoted, terms that

Beginning around 2007, under then signify social cohesion around and pride
President Hu Jintao’s leadership, in Chinese culture, values, and history.
top-level Chinese officials started As the contest between the United
incorporating soft power into their States and China accelerates, it would
speeches and publications. That year, at be natural to see soft power as just
the Chinese Communist Party’s 17th another vector of competition, with
National Congress, Hu urged the Washington and Beijing vying to make
party’s cadres “to stimulate the cultural themselves and their political and
creativity of the whole nation, and economic models more attractive to the
enhance culture as part of the soft rest of the world. Leaders and elites in
power of our country.” In the years both countries clearly see things that
since, Chinese scholars have produced a way, and some worry about their
rich corpus of writings on the topic, and potential vulnerabilities. In the United
the CCP has made massive investments States, the erosion of democratic norms
in public diplomacy, including the could harm the country’s image as a
global expansion of state-owned media bastion of liberal values. In China, a
outlets and the cultural and language slowing economy and a sense of isola-
centers known as Confucius Institutes tion created by the country’s “zero-
and Classrooms, which it has estab- covid” approach to the pandemic could
lished in 162 countries. Meanwhile, the dim its reputation for pragmatic,
party has sought to internationalize the results-oriented governance.
Chinese higher education system by But the image of straightforward
recruiting foreign students and scholars. contest does not quite capture the way
As in the United States, soft power events are playing out. For one thing, the
has been treated as a hopeful idea in two countries interpret soft power quite
China: an important additive to the differently and operationalize the concept
country’s rise, especially its economic in distinct ways. Whereas Washington
expansion. In fact, Chinese experts and places democratic values and ideals at the
officials now embrace soft power with heart of its soft-power promotion, China
more urgency than do their American focuses more on practical matters, seeking
counterparts. There is an inherent to fuse its cultural and commercial
understanding that China’s status in the appeals. That approach has reaped limited
international system is limited and rewards in the West but has resonated in
overshadowed by the West, and that to the “global South.” Even there, however,
truly rival the United States, China people often see the two forms of soft
needs more recognition from and more power as complementary rather than
influence over global public opinion. competitive. Simply put, people in many
External legitimation and respect, for parts of the world are perfectly happy to
the Chinese party-state, is also linked to have both the Americans and the Chinese
its domestic legitimacy. The Chinese try to seduce them with their respective
understanding of soft power is con- visions and values. What Washington and
nected to ideas of “cultural confidence” Beijing see as zero-sum, much of the
and “cultural security” that President Xi world often sees as win-win.
The Balance of Soft Power
SOFT POWER IS HARD the State Department sponsoring

The American conception of soft power artists and musicians to act as some-
has always had a distinctly ideological thing akin to cultural ambassadors.
bent, as the United States presents In China, the understanding and
itself as the chief defender of the liberal practice of soft power focus more on
democratic order. Biden captured the pragmatism than on values. In engaging
essence of this view of American with Nye’s idea, some Chinese analysts
influence in his inaugural address. “We have argued that the separation between
will lead not merely by the example of hard and soft power is artificial, noting
our power but by the power of our that much of the United States’ attrac-
example,” he declared, using a favorite tiveness depends on its military prowess
formulation of his. In December 2021, and economic strength. As the scholar
the Biden administration hosted a Zhao Kejin has pointed out, even one of
virtual Summit for Democracy with the the most celebrated symbols of Ameri-
aim of democratic renewal and building can soft power, Coca-Cola, is not
alliances against authoritarian powers merely a cultural phenomenon but a
such as China and Russia. Russia’s commercial juggernaut. Reflecting this
ongoing war with Ukraine has further critique, the CCP’s soft-power strategy
elevated the goal of strengthening involves promoting Chinese culture and
democratic solidarity against a shared values but also touts China’s model of
authoritarian aggressor. economic development, its governing
U.S. public diplomacy echoes these competence, its technological advances,
sentiments. On social media, American its growing military capabilities, and its
embassies celebrate gender, racial, and ability to carry out political mobiliza-
cultural diversity and hail examples of tion, as seen in its campaigns against
individual resilience and creativity, poverty and corruption. Anything that
sometimes combining the two themes might improve China’s image is consid-
by publicizing the success stories of ered an element of soft power—even
individual immigrants and inviting Chinese hard power. Whereas Washing-
them to speak at events and forums. ton sometimes relies on soft power to
American soft power is also largely distract from its hard power, Beijing
shaped by private-sector cultural sometimes draws attention to its hard
exports, such as Hollywood films, power to buttress its soft power.
hip-hop music and style, and such China’s more pragmatic and less
globally recognizable brands as Coca- ideological approach to soft power
Cola and McDonald’s. U.S. soft-power comes through in Xi’s major interna-
projection often brings the public and tional speeches, in which he tends to
private sectors together. During the downplay ideology in favor of practical
Cold War era, for instance, the State aspirations. “We should safeguard and
Department promoted American jazz improve people’s livelihoods and protect
musicians abroad, and the CIA covertly and promote human rights through
sponsored writers and publications. development, and make sure that
This tradition has persisted and ex- development is for the people and by
panded in the post–Cold War era, with the people, and that its fruits are shared
July/August 2022 47
Maria Repnikova
among the people,” Xi proclaimed in an it the second most popular destination

address at the UN in September 2021. for African students, after France.)
Xi’s formulation subtly undercuts the China also pegs its international educa-
connection between rights and liberal tion programs directly to state-funded
democratic values, redefining “human economic opportunities. In promoting
rights” as access to economic opportuni- Confucius Institutes, Beijing empha-
ties. In communicating with global sizes not only the scholarships that
audiences, China’s international media students can obtain but also the poten-
outlets, such as China Daily and CGTN, tial for employment at Chinese compa-
follow Xi’s lead and emphasize China’s nies that graduates enjoy. In Ethiopia,
economic breakthroughs. The CCP for instance, advertisements for Confu-
buttresses this kind of soft-power cius Institutes list, among other practi-
diplomacy with acts of material gener- cal benefits of studying Chinese, the
osity. Earlier this year, for instance, Xi possibility of getting a high-paying job
pledged $500 million to support devel- at a Chinese company. (Enjoying
opment objectives in Central Asian Chinese culture appears near the
countries, including improvements in bottom of the list.) My interviews with
agriculture and public health. students and university officials in
China also tries to bolster its soft Ethiopia revealed that many institute
power through education. State- graduates end up working as translators
sponsored training programs that China at Chinese enterprises, where they get
offers officials in countries in the global paid double the average salary of an
South present the CCP as an inspiration Ethiopian university professor.
for fast-paced development, especially From a Western perspective, China
when it comes to beating poverty. might appear to be making up for a lack
“They lifted 700 million out of pov- of ideational power with material
erty!” exclaimed an Ethiopian official inducements. According to that view,
I met in Addis Ababa in 2019 who has China is not really exercising soft power
attended several Chinese trainings. He at all but using its economic power to
then ticked off a list of facts and figures co-opt people. This critique misses the
that he had learned on his trip to fact that although such economic
China, including the country’s GDP inducements themselves are not exer-
growth rate, the number of universities cises of soft power, they enhance
it hosts, and even its urbanization rate. China’s soft power by bolstering the
U.S. soft power benefits from an country’s image as a bastion of generos-
image of American educational institu- ity, opportunity, competence, and
tions as elite and top tier; in contrast, pragmatism. Economic engagement
Chinese universities use their relatively also has an affective dimension, encour-
low tuition and the availability of aging an emotional connection to
state-funded scholarships as selling China, especially in places where other
points when recruiting students from opportunities are scarce. What might
the global South. (Before the COVID-19 look transactional to Western eyes in
pandemic, about 80,000 students from fact communicates a powerful message
Africa were studying in China, making about what makes China attractive.
PRAGMATISM SELLS by the U.S. State Department, China

In the United States and other Western offers thousands of scholarships to
industrialized democracies, Chinese soft cover the cost of degrees and training
power has had little impact, as evi- programs for African elites and young
denced by China’s declining favorability people. In Ethiopia, almost every
in such places in recent years. This is in official one meets has already been to
part a byproduct of preexisting negative China, or plans to go, or knows some-
associations of China with communism one who has gone. These are ambitious
and authoritarianism. These negative people, hungry for firsthand experi-
views are also connected to China’s ence in major centers of global power,
increasingly assertive foreign policy and although China might not be their
under Xi, including the rise of what is top-choice destination, it is often the
known as “Wolf Warrior” diplomacy, only feasible one. As one Ethiopian
which involves officials’ using antago- media professional in Addis Ababa
nistic, even churlish rhetoric to attack told me during my visit in 2019, “It is
China’s critics, especially in the West. better to see China than to stay at
In the global South, however, includ- home and see nothing.”
ing in Africa and in Latin America, For the broader public in places such
China’s more pragmatic approach to as Ethiopia, Chinese soft power tends
soft power, layered on top of its expan- to become visible through infrastructure
sive economic engagement, has had projects, such as railways, bridges, and
more success. The latest public opinion highways. Many of these projects are
surveys in Africa found a largely controversial because of onerous loans,
positive sentiment toward China’s disputes over labor, and concerns over
economic and political influence on the quality and safety. Nevertheless, they
continent; almost two-thirds of Afri- elevate China’s standing. In Addis
cans surveyed across 34 countries Ababa, ubiquitous construction sites
regarded China’s influence as “some- funded by Chinese investment are
what positive” or “very positive.” And covered with posters advertising Chi-
in a survey that the Pew Research nese companies. When I asked Ethiopi-
Center conducted in Argentina, Brazil, ans about the critiques from U.S.
and Mexico in 2019, about half of officials who warn of China’s malign
respondents reported having a favorable influence on Ethiopian politics and
image of China; only about a quarter society, the response I often heard was,
expressed negative views. “And where are the Americans?”
In my research on Chinese soft While acknowledging China’s
power in Ethiopia as well as in my relative appeal and advantages in the
interviews with African elites studying global South, it is important not to treat
and attending professional trainings in the U.S.-Chinese competition there, or
Beijing, I found a general appreciation elsewhere, as a zero-sum game. Many
for Chinese soft-power tools, such as people find both China and the United
educational opportunities. In contrast States attractive and perceive their
to the small number of highly com- different models as complementary
petitive fellowship programs sponsored rather than as mutually exclusive. Even
July/August 2022 49
Maria Repnikova
in regions such as Southeast Asia, NO CONTEST

where more overt suspicion and contes- Looking ahead, the United States and
tation of Chinese influence and soft China will face distinctive challenges in
power exist, surveys indicate a strong soft-power promotion. Washington’s
reluctance to side with either country. approach draws scrutiny because of the
In my interviews with Ethiopians in disconnect between the country’s em-
Addis Ababa and Beijing, I found that phasis on democratic values and its
many embrace China’s story of eco- inconsistent adherence to them. Demo-
nomic success and the idea of a shared cratic erosion, pervasive racial discrimi-
developmental trajectory while also nation, and attacks on reproductive
voicing support for values they associ- rights at home detract from the United
ate with the United States, such as States’ image as an inspirational democ-
human rights and democratic free- racy. In workshops with U.S. State
doms. Elites in places such as Ethiopia Department officials, I have sensed a
seek opportunities to interact with growing awareness of the need to
individuals and institutions in both address these issues but also a sense of
countries and sometimes find them- fear that doing so publicly would put the
selves negotiating between the two. United States at a disadvantage vis-à-vis
Ethiopian journalists who attended China. “Wouldn’t it make us look weak?”
training programs in China, for ex- asked one official when I suggested that
ample, often inquire about similar U.S. public diplomacy could convey
opportunities in the United States. more candor and humility about the
In Ethiopia and elsewhere, officials challenges facing American democracy.
often use China’s engagement as a Abroad, Washington’s selective
negotiating chip in getting the United commitment to human rights encour-
States to contribute more. For in- ages cynicism about its intentions. The
stance, at a higher education workshop failure of the United States and its
hosted by the U.S. Embassy in Addis allies to galvanize much of the global
Ababa in 2019, an Ethiopian education South, including major countries such
official highlighted China as an exam- as Brazil, India, and South Africa, in
ple of one of the countries that “take the confrontation with Russia reflects
our students,” implying that the deep-seated distrust. In explaining their
United States should grant similar reluctance to condemn Russia, officials
opportunities. The American officials from such countries tend to accuse
present politely ignored this comment NATO of playing a role in creating the
and stuck to emphasizing U.S. offer- crisis in Ukraine and downplay Russia’s
ings, such as prestigious fellowships aggression by pointing to wars waged
and university-to-university partner- by the United States—rhetoric that
ships. Privately, however, one embassy precisely echoes that of Chinese diplo-
official acknowledged that China is mats and state media.
competing “at scale” when it comes to The United States also ties its own
educational access for Africans and hands by limiting its investments in
that for many African students, China human capital through training and
is the most likely destination. education opportunities. American
diplomats often express interest in the asked Ethiopian university officials

idea of competing with China when it what would happen to Confucius
comes to scholarships and other means Institutes in the country if studying at
of attracting talent. But many also them no longer led to jobs at Chinese
express a conviction that the best talent companies, their response was clear and
will find its way to the United States terse: “We would close them down.” It
organically, a belief that creates inertia remains to be seen how China’s years of
when it comes to fundamentally rethink- pandemic isolation, which have hin-
ing the conduct of public diplomacy. dered people-to-people exchanges, will
For its part, by relying on practical affect its image in the global South. In
inducements rather than ideological the absence of a larger ideational vision,
visions, China invites scrutiny over however, China will need to keep
the quality of its offerings and risks a doling out ever larger gifts—a task that
wholly transactional reciprocity on the will become harder if the Chinese
ground. China’s COVID-19 vaccine economy continues to slow.
exports, for instance, were met with Officials in the United States have
suspicion in many parts of the global been thinking about, talking about, and
South and were sidelined in favor of consciously wielding soft power, al-
Western options when they became though unevenly and often ambiva-
available; concerns about the effec- lently, for decades. Their Chinese
tiveness of the Chinese vaccines were counterparts got a later start. This could
later borne out. Similarly, in conversa- be a disadvantage, but it could also
tions I have had with students from a work to China’s benefit. Contradictions,
number of African countries, many internal tensions, and even hypocrisy
have worried aloud about the quality have become deeply woven into U.S.
of student-teacher interactions and soft power. Managed properly, China’s
the pedagogic approaches at some less lofty vision of soft power might yet
education programs in China. Studies avoid that problem, so long as it can
of the impact of Chinese state media remain “soft” at all. Meanwhile, despite
in Latin America and in Africa have the belief in Washington and Beijing
noted limited public consumption, that the two countries are engaged in a
partly because people saw the content soft-power competition, the reality
as unappealing. To bridge the quality looks more like soft-power coexistence.
gap, the CCP would have to shift its Their success in making themselves
evaluation metrics from quantity to more attractive depends not so much on
quality and allow for more creative outmaneuvering each other as on
freedom, especially in the media—two overcoming their own internal frictions.
adjustments that appear unlikely to As each country tries to refine its
happen under Xi. appeal and reduce the other’s, much of
More broadly, China’s pragmatic the world is becoming less interested in
soft-power approach risks collapsing the question of whether the American
into mere transactionalism, with any model or the Chinese one is the most
benefit to China contingent on others’ attractive overall and more interested in
receiving material benefits. When I what each one has to offer.∂
July/August 2022 51
advantage among world powers, it is not

What Makes a
WHAT IS POWER?
military or economic might that makes

the crucial difference but the fundamental
Power Great qualities of a society: the characteristics of
a nation that generate economic produc-
tivity, technological innovation, social
The Real Drivers of cohesion, and national will.
Rise and Fall This is not a new insight, of course.
American politicians, scholars, and
Michael J. Mazarr pundits have for decades paid lip service
to the idea that a dynamic and resilient
R
ussia’s invasion of Ukraine—and home front is the foundation for success
China’s implicit support for this abroad. But behind such vague bromides
violent attempt to subvert the are specific national qualities that social
international order—has intensified the scientists can identify and measure. Over
strategic competition that now defines the course of 15 months, I led a RAND
U.S. national security policy. What up to Corporation study for the U.S. Defense
this point may have seemed like an Department’s Office of Net Assessment,
abstract and inchoate challenge has supported by analysis from outside histo-
suddenly become real, urgent, and rians, that did exactly that. Drawing on
perilous. In response, many U.S. officials historical case studies and research on
and analysts have called for the United economic development, technological
States to enhance its military capabili- advancement, and much else, we isolated
ties, harden its defenses, and invest in a number of national characteristics that
key technologies. Washington must throughout history have underpinned
prepare to have its will tested again and national competitive success—including
again, they say, whether by proxy wars or a strong national ambition, a culture of
by other challenges to the United States’ learning and adaptation, and significant
network of alliances and security part- diversity and pluralism.
nerships. Success in great-power compe- These domestic strengths are the
tition, in this view, depends on accumu- building blocks of international power. But
lating victories in a series of individual to enable a country to succeed, they must
contests for supremacy. reinforce and support one another. And
History offers a different lesson. they must not fall out of balance. Too
Nations do not prevail in enduring much national ambition, for instance, can
competitions chiefly by acquiring superior lead to overreach, imperiling the country
technological or military capabilities or that overcommits itself. But countries with
even by imposing their will in every crisis too little ambition, diversity, or willingness
or war. Great powers can make many to learn and adapt risk starting a negative
mistakes—lose wars, lose allies, even lose cycle that can spiral into national decline.
their military edge—and still triumph in Today, the United States finds itself
long-term contests. In the struggle for deficient in many of the qualities that
MICHAEL J. MAZARR is Senior Political
powered its rise over the second half of
Scientist at the RAND Corporation. the twentieth century. If it is to regain its
Michael J. Mazarr
competitive advantage—and prevail in its drama to Moscow’s lethargic, conserva-

current contests with China and Russia— tive Sparta. The lesson of both historical
it will have to do more than just outspend rivalries applies to nearly all contests
its rivals on defense or advanced military between world powers. Almost always,
technologies. It will have to nurture the nations rise and fall because of a complex
qualities that make great powers dy- and interlinked set of social characteris-
namic, innovative, and adaptive. tics that produce national dynamism and
competitive advantage.
INNOVATION ADDICTS Yet identifying these characteristics
On the eve of the Peloponnesian War in poses an analytic challenge. Most are
432 BC, a delegation from Corinth traveled abstract and ill defined. Many are also
to Sparta in a last-ditch effort to prevent difficult, perhaps even impossible, to
what would become a generational con- measure reliably, especially in historical
flict. In his history of the war, Thucydides cases where accurate data simply do not
recounts how the Corinthians accused the exist. In complex geopolitical interactions,
Spartans, their allies, of turning a blind tracing definitive causal relationships can
eye to the alarming growth of Athenian be difficult or impossible. Partly as a
power. “The Athenians are addicted to result, many efforts to identify the factors
innovation, and their designs are charac- underpinning dynamism and competitive-
terized by swiftness alike in conception ness have produced essentialist theories
and execution; you have a genius for about national will or decadence or have
keeping what you have got, accompanied posited the superiority of certain cultures.
by a total want of invention, and when Any attempt to overcome this chal-
forced to act, you never go far enough,” lenge must first define the yardstick for
the Corinthians complained. They contin- national success or failure. Measures of
ued: “To describe their character in a economic growth or indicators of
word, one might truly say that they were technological innovation might seem
born into the world to take no rest them- like obvious answers. But these are
selves and to give none to others.” Put intervening factors: economic growth is
differently, Athens posed a danger not a source of national power to be sure,
primarily because of the size of its navy, but it is also a product of more funda-
the richness of its soil, or the number of its mental factors that generate economic
people. It stood to supplant Sparta as the development. The same is true of
dominant power for a broader and more innovation, military sophistication,
encompassing reason: the superior productivity, and many other common
qualities of its social and political system. output measures of national power.
A remarkably similar story unfolded An added complication is that some
some 2,000 years later. The United States countries that score high on characteris-
ultimately prevailed over the Soviet tics associated with national dynamism
Union in the Cold War because it was and competitiveness do not rise to the top
more energetic, innovative, productive, of the global hierarchy. Some, such as the
and legitimate. Indeed, some commenta- Netherlands and Singapore, are too small.
tors made the comparison directly, Others, such as Sweden and South Korea,
casting Washington as the Athens of that have lost or never had a drive for global
What Makes a Power Great
leadership. Still, they generate economic across time and from country to country.
growth, technological sophistication, high And these are not the only variables
living standards, national cohesion, and associated with national success: other
many other outcomes associated with factors, such as natural disasters, pan-
success. A related issue is that factors other demics, and geography, obviously matter.
than societal characteristics can make a But a broad survey of the evidence
critical difference in specific conflicts: suggests that these seven characteristics
Athens had more geopolitical power and play an outsize role in determining the
long-term cultural influence than Sparta, competitive fate of nations.
but thanks in part to a devastating
pandemic and strategic blunders such as THE KEYS TO SUCCESS
its invasion of Sicily, it did lose the The first essential characteristic—argu-
Peloponnesian War. What all this means ably the foundation for all forms of
is that any effort to identify advantageous relative national strength—is some
societal qualities must consider absolute version of driving national ambition.
measures of national strength, such as Externally, this trait produces a sense of
longevity and ability to provide security national mission and greatness and a
and prosperity, and relative ones, such as desire to influence world politics.
success or failure in bilateral rivalries or Internally, it generates a national drive
standing on the world stage. to learn, achieve, and succeed in every-
Our RAND Corporation study looked thing from scientific research to busi-
at both. We examined the literature on ness and industry to the arts. Driving
the rise and fall of nations and on the national ambition demands the commit-
sources of economic and technological ment of a whole people to gain knowl-
progress, conducted a dozen major edge about and leverage over their
historical case studies, and supplemented world: to explore and control, to
that historical scholarship with more understand and direct. This impulse can
recent research on a variety of issues such easily go wrong. Excessive national
as inequality, diversity, and national ambition is a common route to failure,
identity. We found that nations that whether through destructive wars of
demonstrate both absolute and relative choice or imperial conquests that
forms of competitive success tend to overextend a nation’s resources and
reflect, either in specific periods of provoke destructive reactions. But
ascendancy or longer-term positions atop without such ambition, countries
the global hierarchy, seven leading seldom build potent domestic economic
characteristics: a driving national ambi- or technological engines or prevail in
tion, shared opportunity for citizens, a relative contests for power.
common and coherent national identity, Much of the evidence for the impor-
an active state, effective social institutions, tance of national ambition comes from
an emphasis on learning and adaptation, the historical record and the nearly
and significant diversity and pluralism. one-to-one relationship between com-
The causal links between these petitive success and some version of this
characteristics and national competitive characteristic. Rome, for example, had a
success, while generally consistent, vary driving ambition: its rise to greatness
July/August 2022 55
Michael J. Mazarr
during the middle and late Republic and Throughout history, nations that share
early Empire and its supremacy over the opportunity among their citizens have
major powers of its day were propelled gained an edge over those that do not.
by a powerful societal custom that Rome’s policy of opening citizenship to
valorized control, mastery, and conquest. conquered peoples and incorporating
Similar kinds of ambition, including the freed slaves into significant social roles
domestic urge for accomplishment and gave it economic and military advantages.
discovery, can be found in all highly Likewise, the social mobility afforded by
competitive nations—the United King- the United Kingdom and the United
dom, the United States, Meiji Japan, the States gave these powers an advantage
city-states of the Italian Renaissance, and over more socially restrictive powers in
others. Deteriorating societies tend to continental Europe, contributing to their
reflect the withering of this adventurous tremendous economic and scientific
spirit and everything that goes with it, advancement in the nineteenth and
including a thirst for improvement, an twentieth centuries. Researchers have also
appetite for new knowledge, and a found ample evidence for the importance
willingness to take risks. of shared opportunity in narrower, issue-
In addition to having a driving specific studies: inequality is correlated
national ambition, highly competitive with slower growth and stunted innova-
societies tend to share opportunities tion, for instance, and its absence is
widely among their citizens. They offer associated with creativity, innovation, and
many routes to success and exclude thus economic growth.
relatively few segments of their popula- Another characteristic that stimulates
tion from productive roles—at least as national competitiveness is a shared and
compared with their main rivals. In so coherent national identity. The most
doing, they leverage a high proportion competitive societies build their achieve-
of their available talent and provide ments on the foundation of a strong shared
real prospects to a broad cross section group identity—in modern settings, a sense
of their population. Over time, societ- of nationhood. Not only does this shared
ies that exhibit this trait have become identity help nations avoid the competitive
more inclusive in various ways, includ- handicaps of political and ethnic fragmen-
ing in granting full rights and opportu- tation and conflict, but it also enables them
nities to all social groups and in provid- to rally popular support for competitive
ing clear pathways to entrepreneurial efforts. The historian David Landes
and creative advancement. Rome, Meiji articulated the power of a common and
Japan, and even industrial-era Great coherent national identity beautifully in
Britain gained powerful advantage from The Wealth and Poverty of Nations:
versions of shared opportunity that
Britain had the early advantage of
would look incredibly restrictive to being a nation. By that I mean not
modern eyes. But by the standards of simply the realm of a ruler, not simply
their time, these societies generally a state or political entity, but a self-
developed more ways of drawing conscious, self-aware unit characterized
productive talent from more people by common identity and loyalty and by
than did their competitors. equality of civil status. Nations can
Michael J. Mazarr
reconcile social purpose with indi- Habsburg Spain and the late Ottoman
vidual aspirations and initiatives and Empire never developed coherent, lasting
enhance performance by their approaches to sponsoring key elements of
collective synergy. . . . Citizens of a national power, and their competitiveness
nation will respond better to state suffered as a result.
encouragement and initiatives. . . . Economists have cataloged dozens of
Nations can compete.
ways in which active states have helped
This same dynamic has fueled the catalyze growth in modern nations.
rise of many other competitive powers Mariana Mazzucato, for instance, has
throughout history. For example, Japan’s shown how state support was critical for
ascent to industrial and military promi- major advancements in information
nence in both the Meiji and the post– technology, green energy, and pharma-
World War II periods was driven in ceuticals. The Internet and GPS technol-
part by a unifying national identity. ogy both grew in part out of programs at
That identity was always complicated the U.S. Defense Advanced Research
by internal debates over the true nature Projects Agency, and government
of the Japanese character, but it none- support helped spawn dozens of other
theless galvanized a national spirit of technologies, including nuclear power
shared effort and sacrifice. and advanced aviation systems.
Highly competitive societies also tend The active state in turn relies on
to benefit from some version of an active another characteristic of competitive
state: a coherent, powerful, goal-directed, societies: effective social institutions. As
and effective government that invests in the economists Daron Acemoglu, Doug-
national capabilities and beneficial societal lass North, and James Robinson have
qualities. Active states have taken differ- demonstrated, strong and inclusive
ent forms in different countries and in institutions foster economic growth,
different eras, yet they have generally nur- enhance the legitimacy of the state,
tured public and private institutions that respond to social challenges, and produce
are essential for economic success and efficient military power. In the United
social stability. That has meant underwrit- Kingdom, for instance, a centuries-old
ing state-led development, cultivating the national parliament, strong financial
private sector, assuring national stability, sector, and powerful navy all contributed
promoting strong education systems, to the country’s economic and geopolitical
ensuring sufficient markets for revolu- rise. The decline and eventual collapse of
tionary technologies, and rallying national the Soviet Union, on the other hand,
willpower at critical moments. The most revealed what happens when institutions
obvious example of an active state gener- become corrupt and ineffective. As with
ating competitive advantage is the United all characteristics associated with competi-
States, from its early industrial policy to tive advantage, effective social institutions
later state support of research and devel- alone are not enough to explain national
opment and specific technologies. The success or failure; to matter, they must be
city-states of the Italian Renaissance and paired with broader values and habits.
the modern United Kingdom and Japan Most competitive societies share yet
are also good examples. By contrast, another characteristic: They tend to place
a strong social emphasis on learning and contribution to national vitality is

adaptation. They are fired by the urge to corroborated by a mountain of empirical
create, explore, and learn. Instead of being research on diversity in organizations.
shackled by orthodoxy and tradition, they
embrace adaptation and experimentation A BALANCED RECIPE
and are open to innovations in public Each of these seven characteristics is
policy, business models, military concepts associated with national competitiveness,
and doctrines, and art and culture. but not even societies that boast all of
Throughout history—from Athens to them can be assured of long-term success.
Rome to industrial Great Britain and the Nations that prevail in long-term compe-
United States—competitive success has titions must achieve balance in each trait,
been strongly correlated with widespread since all of these advantages can spiral
intellectual curiosity and commitment to into excess and become liabilities. This is
learning. More recent studies provide perhaps most true of national ambition,
evidence of a positive relationship be- which can lead nations to overextend
tween a commitment to modern techno- themselves. But it is also true of the other
logical education and growth and innova- characteristics. Efforts to build an active
tion, as well as one between educational state can, for example, produce a central-
attainment and growth. izing agenda that curdles into authoritari-
Finally, most dynamic and competitive anism and intolerance. Effective institu-
nations embody a significant degree of tions can become bloated and stifling
diversity and pluralism. A broad range of bureaucracies. Too much pluralism can
experiences and perspectives helps dissolve national unity. Most dynamic
generate more ideas and talents that in and successful nations have therefore
turn sustain national power. Pluralism also sought all seven of the essential character-
strengthens organizations, such as firms istics in healthy moderation.
and military branches, by forcing them to They have also enabled the character-
keep up with the competition. Diversity istics to reinforce one another. The most
takes many forms: even ethnically and potent advantage of each trait arises not
racially homogenous nations, such as the from its individual consequences but
Victorian-era United Kingdom or con- from its combined effect with those of
temporary Japan, can still produce wide the others. National ambition and a
political and commercial variety that culture of learning and adapting strongly
drives national competitiveness. reinforce each other, as do an active state
Diversity in the modern sense also and effective institutions. Shared oppor-
promises potential competitive advan- tunity must be combined with some
tages. Melting-pot societies tend not to diversity and pluralism to gain its true
adopt the kinds of rigid orthodoxies that value. This recipe for national success,
suppress competition and innovation, with mutually reinforcing ingredients,
and their ability to assimilate foreigners shows up in all the competitively domi-
makes it easier for them to attract talent nant societies, allowing for differences in
from abroad. These advantages have era and approach. It mixes strong
helped many great powers rise and retain state-supported national ambition with
their competitive advantage, and their varied and diverse human capital,
July/August 2022 59
Michael J. Mazarr
effective social institutions and rule of Four of the seven characteristics are
law, a spirit of shared national commu- especially at risk. One is national will and
nity, and a deeply felt reverence for ambition. Survey evidence suggests that
experimentation and new ideas. younger Americans do not view the
In order for this recipe to produce United States, its values, or its ambitions
competitive success, a society must have a in the same way as older Americans. A
public-spirited elite class. Nations gain 2019 Eurasia Group Foundation survey,
tremendous competitive advantage from an for example, found that fully 55 percent
active, public-minded elite that is represen- of Americans between the ages of 18 and
tative of the broader society and connected 29 do not think the United States is
to it via avenues of social mobility. But “exceptional,” compared with only 25
when a nation’s elite, or much of it, be- percent of Americans over 60. Belief in
comes corrupt or engages in rent-seeking American exceptionalism is not the same
behavior, that nation’s vibrancy, resilience, as ambition, of course, but it does indi-
and competitive edge will erode. Crucially, cate confidence in the national mission.
the quality of a nation’s elite plays a vital Taken together with the many surveys
role in determining the legitimacy of its that show growing popular skepticism
governing institutions. Where elites are about the need to project U.S. military
seen as corrupt and self-interested rather power overseas, Americans’ waning
than devoted to the public good, societies confidence in their national mission
and the institutions that govern them often suggests a country that is less self-assured
atrophy or break down. than it once was. Across a wide range of
issues, polls reveal that Americans
OVER THE HILL? generally have less faith in the future and
All this should give American leaders in their major political and social institu-
pause. In the second half of the twenti- tions than they have in half a century.
eth century, the United States mastered Such survey results have always ebbed
the recipe for national competitiveness and flowed, and Americans have had
better than any nation in history. And little faith in some institutions, such as
even now, aspects of American society Congress, for many decades now. But on
continue to exhibit strong elements of the whole, public opinion polls paint a
the seven essential characteristics: social picture of a nation that is no longer sure
mobility, diversity and political plural- of itself, much less of its right and duty
ism, in particular. Despite their troubles, to impose its will on the world.
moreover, U.S. government institutions The United States’ shared national
from the local to the federal level still identity may be in even greater peril.
rank high in global evaluations of Increasingly, polling data and other observ-
transparency and effectiveness. But able trends—such as “associative sorting,”
there are also serious reasons for con- wherein people move to live closer to
cern. If the United States continues on others with similar views—suggest that the
its current trajectory, it will risk weaken- country is becoming divided into mutu-
ing or even losing many of the traits ally suspicious camps with little common
that for the last 75 years have made it ground. This national fragmentation has
the world’s dominant power. been accelerated by a siloed information
environment that allows disinformation strengths. The United States displays

and conspiracy theories to thrive. some of the characteristics of a once
Shared opportunity also shows signs of dominant power that has passed its
waning. Inequality is rising, and intergen- competitive prime: by some important
erational mobility appears to be stalled. measures, it is complacent, highly bureau-
As the economist Raj Chetty and his cratized, and seeking short-term gains and
collaborators at Harvard’s Opportunity rents rather than long-term productive
Insights project have shown, only half of breakthroughs. It is socially and politically
young people today earn more than their divided, cognizant of the need for reforms
parents did, compared with 90 percent of yet unwilling or unable to make them, and
people born in 1940. Efforts to close suffering a loss of faith in the shared
opportunity gaps in areas such as access national project that once animated it.
to venture capital have not been sufficient At the same time that the United States
to reverse these troubling trends. At best, has allowed some of its societal strengths to
the level of shared opportunity has atrophy, its closest rival—China—has built
plateaued, and it may well be retreating up tremendous societal strengths in some
after decades of progress. areas but also allowed potentially fatal
Finally, the spirit of learning and weaknesses to fester in others. China
adaptation in the United States is in- clearly benefits from a potent national will
creasingly threatened by the corrosive and ambition, both domestically and
information environment. Competitive internationally, and a unified national
societies are information-processing identity among much of the population. It
organisms whose various components has an active state that is pouring resources
take insights about the world and turn into human capital, research and develop-
them into behavior. Yet the U.S. informa- ment, high technology, and infrastructure.
tion marketplace is being corrupted, in Its subnational governments theoretically
part because of the tremendous amounts offer platforms for vibrant, pluralistic
of misinformation sloshing through social experiments in social policy. China has a
media, the sensationalism of the news proud tradition of learning and education,
media, the fragmentation of information and its governing institutions appear to
sources, and the emergence of a “trolling” have a high degree of legitimacy: in the
ethic that encourages hostility and 2022 Edelman Trust Barometer, an online
mean-spiritedness in public discourse. survey of public opinion in 28 countries,
The United States continues to exhibit China scored toward the top of the rank-
clear societal strengths. But data on issues ings for average levels of trust in nongov-
as varied as the explosive rise of bureau- ernmental organizations, business, govern-
cratic and administrative functions across ment, and media. In some ways, therefore,
many U.S. public and private institutions China seems to be cultivating a powerful
and the growing proportion of investment combination of essential characteristics for
devoted to so-called value extraction, competitive success and positioning itself
including via stock buybacks, suggest that to leap ahead of the United States.
the country may be living off the accumu- Yet there are reasons to think China
lated benefits of long-standing advantages may falter. Opportunity there is wide-
rather than generating new competitive spread but still limited: inequality is
July/August 2022 61
Michael J. Mazarr
growing, the World Economic Forum pressures. Social institutions become weak
ranks China 106th out of 153 countries on and inept or authoritarian and overly
gender equality, and young people are bureaucratic. The active state seizes up
increasingly anxious about lack of social and is unable to take bold action to solve
mobility. On the World Bank’s Worldwide problems or create new opportunities.
Governance Indicators, which measure To retain its competitive edge, the
quality of governance, China continues to United States may need nothing less than
lag behind the United States. China has a new national project to reinvigorate its
little diversity and shows even less interest essential characteristics. Our RAND study
in embracing it. Most critically, China is wasn’t designed to generate specific policy
not achieving a healthy balance of these proposals, but its findings hint at what
essential characteristics. Its ambition is such an initiative would require. Among
becoming excessive and self-defeating; its other things, it should include a renewed
proud national identity could curdle into a commitment to ensuring that opportunity
xenophobic and exclusionary one that is shared and to unleashing the national
limits learning from abroad. The Chinese creativity and power that reside in under-
state is also becoming hyperactive, seeking served and underachieving parts of the
to dominate all areas of social and eco- population. To cultivate a shared American
nomic life, choking off policy innovation identity, the United States must also find
and adaption, and imposing rigid ortho- ways to celebrate American national
doxies that stifle free inquiry and innova- community and spirit—and unapologeti-
tion. These trends, along with other cally promote unifying themes of Ameri-
well-known challenges—including a can history and culture—while acknowl-
rapidly aging population and burgeoning edging the complexity of its past. And it
debt—should be red flags for China. will have to embrace a renewed, although
limited and targeted, active role for the
A QUESTION OF WILL state by encouraging research, innovation,
For the United States, the warning signs and new models of learning; wage war
come from the opposite direction, sug- against bureaucratic excess and administra-
gesting a once-dominant power congeal- tive constraints on creativity in the private
ing into immobility. Similar signs have and public sectors; and do more to combat
preceded the decline of many other great misinformation and disinformation.
powers and civilizations that lost their Such an agenda would be thoroughly
competitive standing. The process is a nonpartisan. Some of these needed
poisonous cycle, the mirror image of the initiatives—those promoting a vibrant
positive reinforcement among beneficial commercial market and a strong sense of
traits that generates competitive advan- national community and identity, for
tage. Opportunity is hoarded. National instance—are often associated with
willpower recedes as a society becomes conservative agendas. Others are more
self-satisfied and gripped by new ortho- commonly seen as progressive priorities,
doxies, losing some its drive for interna- including efforts to share opportunity
tional achievement and domestic intellec- more widely and empower an active state
tual, social, and scientific progress. Unity to shape markets for the public good.
fragments under partisan or ideological That there is something for everyone
may be because the societal characteris- failure which was psychological: The
tics that drove the United States to failure of will, the failure to confront
predominance always reflected a produc- the crises that the Italians knew that
tive and healthy combination of priori- they were in, the decision—the hard
decision, and the decision that is so
ties from across the political spectrum: a
natural in human nature—to accept
nonpartisan view of American greatness what is known and safe and stable.
that it is essential to recapture today.
The challenges confronting the United That fateful decision doused much of
States are very real. The threats posed by the intellectual fire that had fueled the
China and Russia should not be exagger- period’s remarkable progress. In Bartlett’s
ated, but both countries have goals that words, it killed off the “self-reinforcing
are antithetical to American interests and energizing myth” that had driven the
values and to the post–World War II Italians “to do such great things, to extend
international order that has served the human experience so far in such a short
United States so well. But the prevailing period of time.” That source of greatness
view of what Washington must do in was much broader and more fundamental
response—redouble investments in than economic growth or military might.
military power and embrace a new It was the essential dynamism and vitality
campaign to contain Russian and Chinese of a society. And when it suddenly
power—is at best only part of the answer. evaporated, it left Italy without ambition
Such efforts could easily become counter- or a commitment to learning, fearful of
productive if they overextend the United experimentation and innovation, and
States or yield new forms of domestic captured by elites concerned with power
repression and orthodoxy. Far more and profit above all else.
important is a determined national effort The United States faces a strikingly
to reinvigorate the qualities that made the similar peril today. The primary threat to
United States the greatest engine of U.S. dynamism and competitive standing
competitive dynamism in history. comes not from without but from within:
In 2005, the historian Kenneth from changes in the character of Ameri-
Bartlett ended a series of lectures on the can society. The next great challenge for
Italian Renaissance with a melancholy the United States will be to stimulate a
meditation on the causes of national new era of competitive advantage, one
stagnation and decline: that can revive the qualities that powered
the country’s rise in the last century as
The Renaissance ended because the well as sustain them into the next. As it
sets of attitudes and beliefs and
self-confidence, that energizing myth
was for Italy at the end of the Renais-
that [was] the motive power of the sance, the ultimate question for the
Renaissance mind, simply ceased to United States is not one of understand-
function. The Renaissance could not ing or of capacity to tackle such an
continue in the form that it had. It undertaking. The question is one of will:
couldn’t be sustained because ultimately whether the United States has the
the failure wasn’t military or political or reservoirs of creative determination,
economic, although all of these national solidarity, and political resolve to
provided the context of the truly great meet this weighty challenge.∂
July/August 2022 63
Two definitions of economic power

What Money
WHAT IS POWER?
together demonstrate its strengths and

limitations. To paraphrase the econo-
Can’t Buy mist Richard Cooper, economic power
is the capacity to apply economic instru-
ments to punish or reward another
The Limits of party. But another definition, as articu-
Economic Power lated by the political scientist F. S.
Northedge, depicts economic power as
Barry Eichengreen the capacity of an individual, group, or
government to use economic instru-
ments to influence the decision-making
A
nyone who wonders about the of another actor, thereby causing the
potential of economic power targeted party to modify its behavior.
need look no further than the The United States and its NATO allies
response to Russia’s attack on clearly possess economic power in
Ukraine. The dramatic measures Cooper’s sense, in terms of the ability to
taken by the United States and its use economic instruments to punish
allies illustrate the potency of the another party. It is less clear, however,
purse. The International Monetary that they are capable of exercising it in
Fund has forecast that asset seizures, Northedge’s sense, as a means of alter-
financial sanctions, oil embargoes, and ing the behavior of an adversary.
bans on the sale of military hardware, The United States has a long
oil drilling equipment, and commer- history of wielding economic instru-
cial airliner parts will cause Russia’s ments to achieve its foreign policy
economy to contract by nearly nine goals. Precedents can be found at least
percent in 2022, a decline nearly three as far back as the Embargo Act of 1807,
times as large as the one that Russia when U.S. President Thomas Jefferson
suffered in 2020 as a result of COVID-19. blocked imports in an effort to push
It is hard to imagine a more striking back against British and French inter-
demonstration of the power of eco- ference in U.S. trade. But there is an
nomic sanctions. equally long history recording the
But anyone who wonders about the inability of such instruments to alter
limits of economic power also need the fundamental behavior of another
look no further than Russia. For all the party. The 1807 embargo, for instance,
damage that Western punitive moves failed to hurt British and French
have done, there is no indication that interests and fueled, rather than
they can persuade the Kremlin to halt prevented, conflict between the United
its war in Ukraine or even to modify Kingdom and the United States,
its prosecution of the war. culminating in the War of 1812. Nor
does exercising economic power
BARRY EICHENGREEN is George C. Pardee necessarily induce political shifts:
and Helen N. Pardee Professor of Economics
and Political Science at the University of economic penalties and rewards rarely
California, Berkeley. lead to regime change, for example.
Barry Eichengreen
The application of economic power is frontations, as well as to weaken the

changing in one crucial respect, however: credibility of threats of military action.
the growing importance of international Economic measures, in contrast,
coordination. Economic power has can be surgically calibrated to limit
always been more effective when exerted the danger of escalation—or so say
by a coalition of countries. But in a their proponents. They can be aimed
multipolar global economy, where at specific banks, politicians, and
essential goods and services can be businesses. They can be tailored to
sourced from an increasing number of maximize the pain felt by key
national suppliers, the importance of decision-makers and their political
coordination for effective application is allies while sparing the general public.
greater still. Consider the Trump admin- Few armies can deploy their hardware
istration’s tariffs on Chinese exports, with comparable precision and avoid
which were imposed solely by Washing- inflicting civilian casualties. In his
ton and produced no significant changes 2009 book, Power Rules, the foreign
in Beijing’s economic behavior. The policy expert Leslie Gelb invoked
Biden administration surely had that these dissimilarities as explanations
failure in mind when it enlisted the for “two earthquaking historical
support of a broad coalition of like- trends: the declining utility of mili-
minded governments before imposing tary power and the concomitant rise
sanctions on Russia. Going forward, U.S. of international economic power.”
economic power will depend more and In practice, however, the relation-
more on Washington’s ability to foster ship between economic and military
unity in an increasingly fractured world. power is more complex. For one thing,
economic and military measures have
HAMMER, NOT SCALPEL sometimes served as complements
Economic power is typically framed as rather than substitutes. In 1990, for
an alternative to military power. Esca- instance, the un Security Council,
lating economic sanctions on Russia, for responding to Iraq’s invasion of Ku-
instance, have been presented as an wait, authorized an embargo broadly
alternative to fulfilling the Ukrainian prohibiting trade with both countries.
government’s request that NATO estab- It later authorized the use of military
lish a no-fly zone over Ukraine. This force in implementing the embargo. A
formulation is invoked to explain why series of subsequent resolutions in-
governments, when embroiled in structed states to use their armies,
geopolitical conflicts, have increasingly navies, and air forces to interdict ships
turned to economic measures in recent or aircraft carrying cargo to Iraq or
decades rather than engaging in direct Kuwait. More recently, the use of
military conflict. Given the threat of economic sanctions against Russia has
nuclear war, the risk of escalation in a not precluded the provision of military
military confrontation between major assistance to Ukraine; rather, the two
powers is simply too great. That risk go hand in hand as essential compo-
has been sufficient to limit the inci- nents of a larger strategy to punish
dence and extent of such direct con- Russia for its aggression.
What Money Can’t Buy
Moreover, the idea that high-tech embark on foreign policy adventures for
economic weapons will inflict pain fear that sanctions will galvanize public
exclusively on their intended targets is opinion against them and that this
an illusion. The fact that Russia is on dissatisfaction will manifest itself on the
course to experience a nine percent fall streets and cost them votes. Unfortu-
in gdp, with an annual rate of consumer nately, authoritarian leaders who control
price inflation of around 20 percent, is their country’s military, security appara-
an indication that the West’s economic tus, and media landscape are not subject
sanctions will hit not just Russian to the whims of public opinion. The
oligarchs but also ordinary households. scholars Gary Hufbauer, Jeffrey Schott,
In other cases, countries have imposed Kimberly Ann Elliott, and Barbara Oegg
economic sanctions to purposely inflict found that sanctions are least effective,
widespread pain. During World War I, in the sense of changing a target’s
for instance, the Allies imposed a com- behavior, when levied against autocratic
prehensive blockade against Germany, regimes. As the political scientists
seeking to ratchet up pressure on the Jean-Marc Blanchard and Norrin Rips-
country by creating economic hardship man put it, sanctions are most likely to
for ordinary citizens. That blockade is work when executive autonomy is
estimated to have caused some 750,000 limited or when the head of state is
civilian deaths from malnutrition and answerable to other government
disease. Notably, however, there is no branches capable of channeling popular
evidence that civilian hardship played a disaffection. The United States has
role in the German high command’s repeatedly directed sanctions and related
decision to end the war. economic instruments against autocratic
In any case, the current economic regimes, including in China, Cuba, Iran,
sanctions against Russia have not come Iraq, and Russia, among other states. It
close to anything on the scale of a is not surprising that these efforts have
World War I–style blockade. They fall met with limited success.
short even of the 1990 embargo against A further limitation of sanctions,
Iraq, which exempted only humanitarian when levied against an important and
assistance. The hope of some Western interconnected economy, is that they
observers that the country might rise up inflict damage that reverberates well
against Russian President Vladimir Putin beyond the targeted country. The eu,
rests in part on the idea that Western for instance, was initially reluctant to
sanctions will inflict widespread eco- sanction Russian banks during the
nomic pain for which the Russian public early stages of the Ukraine crisis for
will blame its leader, resulting in that fear of harming its own banks that
leader’s downfall. History suggests that have claims on the country. Germany
this outcome is unlikely. has likewise resisted banning imports
of Russian natural gas for fear of
SANCTIONS WHIPLASH causing a domestic recession.
The hope, in most cases, is that eco- Moreover, the impact of many
nomic sanctions will serve as a deterrent. economic measures may also be con-
Leaders, the logic goes, will hesitate to strained by the adaptability of the global
July/August 2022 67
Barry Eichengreen
economy. The effect of a European ban It helps, of course, when a commodity

on Russian oil and gas would be limited required by the sanctioned country has
insofar as energy exports could be only a small number of sources and when
rerouted, via tanker or pipeline, to the governments of those source coun-
countries not participating in the ban. tries are allied. Advanced semiconductors
Russia could ship additional natural gas and the equipment needed to produce
to China, which is not a party to the them, for instance, can be sourced only
sanctions regime, through the Power of from the Netherlands, South Korea, and
Siberia pipeline, the existing natural gas Taiwan. Earlier this year, the U.S.
link between the two countries, which Treasury Department worked hard to
was running at less than full capacity ensure that their governments were
before the war. China and Russia have onboard with its sanctions on Russia. (It
also reached a 30-year deal in which didn’t hurt that Russia was only a minor
Russia will supply gas to China via a market for these places.) But whether
new pipeline—an agreement they lack of access to the latest generation of
formalized when Putin met with Chi- semiconductors will be enough to effect a
nese President Xi Jinping during the change in Russian foreign and military
Beijing Winter Olympics, just days policy is questionable. Sometimes, in a
before Russia launched its attack on pinch, less advanced semiconductors
Ukraine. The deal will have clear sourced from other countries will do, as
geopolitical consequences: China will U.S. automakers learned during supply
rely more on Russian energy imports chain disruptions in 2021. This option
and less on Middle Eastern supplies, suggests that even concentrated eco-
whereas western Europe will increas- nomic pressure can have limited bite.
ingly look to the Middle East, instead
of Russia, to meet its energy needs. But HITTING A WALL
thanks to China, the impact on the Other developments in the economic
Russian economy of a European em- war against Russia similarly illustrate
bargo on Russian energy will be limited. the limitations of economic power,
Commodities at large, beyond oil given the increasingly multipolar
and gas, are fungible: they can be structure of the world economy. Take,
bought and sold on different markets. for instance, the ban on Russian banks
The implication is that economic power from SWIFT, the communications
will be effective only when the coun- network that financial institutions use
tries exerting it form an encompassing to transmit information about trans-
coalition—a trick that is easy to at- fers, transactions, and payments. The
tempt but hard to pull off. Although political scientists Henry Farrell and
holdouts offering the targeted country Abraham Newman, in their work on
alternative sources of supply or demand weaponized interdependence, cel-
can be threatened with secondary ebrate SWIFT as an example of how
sanctions, their application would risk certain states are able to leverage
igniting a two-front economic war. This interdependence to coerce others.
could inflict yet more damage on the They observe that SWIFT is an all but
sanctioning countries. exclusive conduit for instructions
Barry Eichengreen
regarding cross-border financial costs—when their competitors fail

transfers. Banning a country’s banks, to do the same.
therefore, makes it difficult to pay for This last observation points to a key
imports, whatever their source. difference between military power and
The United States, Farrell and economic power: military power is
Newman observe, is better able than concentrated, whereas economic power
other countries to wield authority is disbursed. Armies are hierarchical.
over swift and leverage it as a tool of Soldiers follow commands from superi-
economic might. U.S. financial ors. Battalions are instructed on how to
institutions are its largest set of coordinate. Market economies, on the
national shareholders. The single larg- other hand, are decentralized. Compa-
est share of bank-to-bank financial nies and households make decisions
transfers is conducted in dollars and based on prices, profits, and values.
therefore involves U.S. banks. Swift When executives do not believe it is in
operates data centers in the United their firm’s interest to help the state in,
States, exposing it to the long arm of say, ousting objectionable leaders or
the U.S. legal system. U.S. sanctions discouraging their foreign adventures,
against swift itself, which Congress they are unlikely to contribute to their
has threatened in the past, would pose government’s effort to leverage eco-
an existential threat to the network. nomic power to these ends.
Smaller, less financially consequential At the same time, executives care
states, in contrast, find it harder to about their company’s image, and they
bend swift to their will. Farrell and are often willing to exert their own
Newman therefore refer to swift as economic power against foreign actors
an “asymmetric network structure.” to protect their company’s reputation
As they also observe, swift is not elsewhere. Numerous companies
an intergovernmental agency, as is terminated their business in Russia
the case, for example, with the Uni- following Putin’s invasion of Ukraine—
versal Postal Union. Rather, it is a less, one suspects, out of sympathy for
cooperative of private financial the besieged residents of Mariupol than
institutions. Those private-sector for fear of how their customers would
entities regulate its economic power. react to their profiting from continued
Governments can enlist firms to do Russian operations. The Russian case
their bidding, of course. In wars, they highlights an important point: eco-
do so by executive order. But whether nomic power in the age of social media
they can order firms to stop doing is rooted in public opinion and in
business in a country because of, say, consumers’ purchasing power. A gov-
unsavory factory conditions or ernment that is unable to maintain
human rights violations is less cer- popular momentum for a military
tain. Whether companies will comply campaign will likely be unable to
voluntarily is also unclear. Firms like sustain that campaign indefinitely.
keeping costs down. They find it Public support is, if anything, even
difficult to seek new sources of more essential to efforts to deploy
products—thereby incurring higher economic power effectively.
SLIPPING THROUGH THE NET swift to glean information about these

But the ban on Russian participation countries’ cross-border transactions and
in swift also reveals how actors can to impose costs on a country’s banks
circumvent dependence on global and those doing business with them.
networks. Economies are flexible; The People’s Bank of China has
banks and firms regularly seek ways to been working to develop cips into a
avoid economic pinch points and find real alternative to the West’s dollar-
substitutes for scarce inputs. Before based clearing system since 2015. Seven
swift transmitted its first message, in years later, however, China’s system is
1977, banks sent transfer instructions still far from an adequate substitute.
by telegraph and telex systems. This The main U.S. clearing-house for large
equipment still exists today, as does banking transactions, the Clearing
the Internet. Although these means of House Interbank Payments System,
communication may be more costly known as CHIPS, processes 40 times as
and less secure than swift, they can many transactions by value as does
still be used to carry out the work of China’s alternative and has nearly ten
verifying details about consumer times as many participants. Despite the
accounts and transmissions of funds. Chinese authorities’ efforts to encour-
Iranian banks, for instance, remained age cross-border use of the renminbi,
able to do business with foreign banks, the currency still accounts for barely
albeit at a cost, when they were cut off two percent of global payments, a
from swift in 2012. Without other fraction of the dollar’s 40 percent
punitive measures, Russian banks will share. Ironically, these facts are known
likely be able to do the same. because cips still relies heavily on
Moreover, the governments of swift’s messaging system to send
countries cut out of these networks, and instructions regarding funds transfers
other governments simply wary of to and from banks outside China.
suffering the same fate, can invest in Cips’s potential should not be underes-
alternatives. Aware of its dependence on timated, however. Eventually, banks
swift and the dollar, China has been will install digital translators enabling
promoting the cross-border use of its them to use cips’s Chinese-character-
currency, the renminbi, and developing based messaging system, but that will
an alternative to swift and Western take time. Similarly, the renminbi may
bank clearing-houses known as the one day come to rival the dollar as a
Cross-Border Interbank Payment vehicle for cross-border payments,
System (cips). To the extent that it although that may take decades.
succeeds, China, and potentially other Still, governments’ attempts to use
countries, such as Russia, will be able to existing networks and institutions to
conduct international transactions in project economic power will cause rivals
renminbi and transfer funds between to redouble their efforts to develop
domestic and foreign banks using a alternatives. This is not an argument
platform operated by the People’s Bank against relying on economic instru-
of China. This practice will eliminate ments. But it is a reminder that govern-
the ability of the United States to use ments wielding their economic power
July/August 2022 71
Barry Eichengreen
aggressively will see others investing Chinese firms has not led China to
even more heavily in arrangements that modify its military posture, be it
render those instruments less powerful toward Taiwan or more generally.
in the future. Counterfactuals are difficult. One
can imagine that Beijing would have im-
DON’T BANK ON IT ported even less from the United States,
Policymakers continue to believe in the that its human rights violations would
potential of economic pressure to sway be even more egregious, and that its
foreign regimes and actors. Successive military posture would be even more
U.S. administrations, for instance, have aggressive had the United States not
deployed the United States’ economic used its economic power. But even if
might in an effort to influence Chinese that is true, the best that can be said for
policy. The Trump administration these policies is that they prevented bad
slapped tariffs on Chinese goods to situations from getting worse.
browbeat China into increasing its Perhaps it is unrealistic to expect
purchases of U.S. agricultural products. economic instruments to bring about
The Biden administration followed sharp changes in a strategic adver-
President Donald Trump’s lead, prohib- sary’s policies within a short period.
iting sales to China of high-tech Gelb, in Power Rules, cautioned that
equipment that could be used for economic power does not produce
surveillance purposes. In 2021, Presi- results expeditiously. “Economic
dent Joe Biden issued an executive power functions best when you permit
order denying 59 Chinese defense and it to proceed slowly,” he wrote, “allow-
surveillance technology firms access to ing it to act like the tide.” Armies can
U.S. investment in an effort to discour- employ blitzkrieg tactics, but treasury
age the Chinese government from departments must eschew quick
engaging in foreign intelligence activi- victories and stay the course.
ties abroad and committing human Economic power may also be more
rights violations domestically. effective at encouraging behavioral and
The one thing these initiatives have policy change when it takes the form of
in common, besides seeking to lever- positive incentives and rewards for
age economic power, is their failure to potential allies rather than sanctions
induce discernible changes in Chinese and punishments for rivals. The Mar-
policy. A study by the economist Chad shall Plan is the prototypical example of
Bown concluded that Trump’s tariffs how economic resources can be used to
and the subsequent trade deal with encourage governments and societies to
Beijing led China to purchase exactly affiliate with a particular economic and
zero additional U.S. agricultural geopolitical camp and align their
exports or any other extra U.S. ex- policies accordingly. Trade deals may
ports. Denying China access to ad- foster deeper economic relations among
vanced U.S. technology has not the signatories but also encourage closer
prompted Beijing to back away from cooperation on other, non-trade-related
its surveillance activities. Prohibiting matters. China is vigorously pursuing
U.S. investment in defense-linked such policies: witness its Belt and Road
Initiative, designed to spread its foreign Russia, presumably for fear of provok-
investment around Asia and the world, ing secondary sanctions. This result is
and its participation in the Regional an indication that economic power can
Comprehensive Economic Partnership, be effective when it has a very specific
a market-access agreement that includes focus—in this case, limiting a specific
15 Asia-Pacific countries but excludes set of transactions, namely those by
the United States. The United States banks, with a specific country. It is
can and should exert its economic might also a reminder that United States
for similar ends; if not, it may see its derives much of its economic power
own power dwindle. from its engagement with the rest of
Thus, the main threat to effective the world. China’s banks—and govern-
U.S. economic power comes from the ment—fear secondary sanctions
United States itself—from the danger precisely because business with their
that the country will once again turn Western counterparts is so extensive
inward economically and politically, as and economically important.
it did starting in 2017. Foreign trade The application of such secondary
and investment have always been a sanctions—or, more alarming, a direct
source of strength for the U.S. econ- confrontation over Taiwan, leading to
omy, and a country that is not econom- broader U.S. sanctions against China—
ically strong cannot effectively wield could cause that interdependence to
economic power. At the same time, it is unravel. China would retaliate with
important to recognize that there is no sanctions of its own, redouble its efforts
fundamental reason why the United to create self-standing economic and
States should continue to play the financial institutions, and demand that
dominant economic role that it did countries in its orbit operate exclusively
after World War II. Emerging markets through its institutions. The United
will continue to emerge: a number of States and its allies would presumably
economic and demographic factors do likewise. U.S. economic leverage
indicate that the United States will over China would diminish if the world
account for a shrinking share of global bifurcated into rival camps, decreasing
gdp over time. To effectively exercise global interdependence.
economic power, therefore, the country And that would be the least of
will have to coordinate with others—as Washington’s worries. The unraveling
it has done recently by cooperating of global supply chains would place the
with the Netherlands, South Korea, U.S. economy at risk. Were China to
and Taiwan on banning advanced liquidate its dollar reserves, possibly in
semiconductor sales to Russia. anticipation of the imposition of U.S.
The future of U.S. economic power sanctions, it could precipitate a global
will hinge, in large part, on whether financial crisis of unprecedented
there is cooperation between the proportions. To ward off those disas-
United States and the single biggest ters, Washington would do well to
emerging market, China. Chinese remember that there is power in
banks appear to have acceded to West- numbers and that the road away from
ern sanctions barring business with interdependence is a dead end.∂
July/August 2022 73
also shunned multilateral alliances,

Hierarchies of
WHAT IS POWER?
pulled out of international agreements,

and cultivated cozy relations with
Weakness autocrats such as Saudi Crown Prince
Mohammed bin Salman and Russian
President Vladimir Putin, all in the name
The Social Divisions That of rejecting the values of liberal elites
Hold Countries Back and the existing Western establishment
in favor of a more nationalist, “America
Amitav Acharya first” vision. One result is that many
U.S. allies today have much less confi-
dence in the ability of Washington to
I
n the year and a half since U.S. uphold the liberal international order.
President Joe Biden came to office, Although they have welcomed renewed
the international order has often U.S. engagement in NATO and Europe,
seemed defined by a resurgence of many European governments wonder
great-power conflict. China and the how long the approach will last if another
United States remain locked in a robust populist president is elected in 2024.
rivalry. In the wake of Russia’s invasion The United States is not alone in
of Ukraine, Washington and its NATO facing deep social polarization. In many
allies have been drawn into a large-scale countries—in both the West and other
war in Europe that pits the liberal West parts of the world—political and social
against an autocratic Russia. In this cleavages over class, race, gender, and
volatile world, many analysts suggest, religion have become increasingly
the most important kinds of power are pronounced. Rising income inequality
once again military and economic: the has slowed growth and social mobility
continued ability of the United States to since the Great Recession of 2008, not
limit the threat of authoritarian rivals only in countries such as Italy, the
depends on the extent to which it can United Kingdom, and the United States
maintain the most advanced armed but also in Finland, Norway, and
forces in the world and ensure that its Sweden—countries known for their
economic might can outpace China’s. more equitable wealth distributions.
Often overlooked in the commentary, Anti-Asian hate crimes have risen
however, are the ways in which military sharply in the United States and glob-
and economic power are dependent on ally since the start of the COVID-19
social stability at home. Biden’s populist pandemic. In recent years, China and
predecessor, Donald Trump, exploited India have also experienced rising
growing divisions over class, race, gender, income inequality, and they now rank at
and religion for political purposes. He the bottom of the World Economic
Forum’s Global Gender Gap Index on
AMITAV ACHARYA is Distinguished Professor women’s health and survival. And
of International Relations at the School of religious freedom is diminishing in
International Service at American University
and the author of Constructing Global Order: both of these countries, as well as in
Agency and Change in World Politics. Hungary, Indonesia, and Russia.
Amitav Acharya
These tensions underscore a key order as a prerequisite for maintaining

point: as Western governments focus on U.S. primacy in world affairs; Biden’s
international conflicts, strategic compe- version of this has been to call for “a
tition, and disruptions to the global foreign policy for the middle class.” But
economy, an even greater threat to whether in the United States or else-
world stability may come from internal where, such rhetoric has rarely led to a
social divisions that sap countries’ unitysystematic and serious effort to under-
and strength. These forces are all part stand how internal social hierarchies
of what might be called “power affect international power.
within”—the domestic social hierarchies The neglect has two main causes.
that determine who gets to have power First, scholars and policymakers have
and why. And just as these hierarchies tended to frame the concept of power
can affect national prosperity and social around national security. National
stability, they can also enhance or security has traditionally been defined
constrain a country’s influence in the as protecting a country’s sovereignty
world. For any given country, the and territorial integrity against foreign
internal distribution of power may be as military threats, an approach that tends
important to international relations as to ignore nonmilitary and noneconomic
external geopolitical and ideological sources of power. Second, the idea of
forces, since social hierarchies are oftenworld order is often conflated with the
more deep-rooted, ubiquitous, insidi- distribution of military and economic
ous, and enduring. It is vital, then, to capabilities among countries, without
address these cleavages if the United taking account of the variations in social
States and its allies are to defend and hierarchies within them.
revive the liberal international order. But as recent history has shown,
analysts ignore these internal forces at
POWER WITHIN their peril. There is now a significant
For decades, international relations body of data on the effects of social
experts have tended to downplay the cleavages—whether based on class, race,
role of domestic power relationships in gender, or religion—on political and
shaping the world order. This has been economic power. Uneven access to new
true even with the growing recognition technology and education, for example,
of soft power and other indirect forms of along with economic deregulation and
international influence: the concept of cuts in welfare benefits, has led to a
international power—whether exercised growing class divide between those at
through coercion, persuasion, seduction, the top of social hierarchies and those
or cooperation—continues to be under- lower down. According to the Pew
stood as fundamentally a matter of Research Center, the income gap
external relations between countries. Of between the top ten percent and the
course, political scientists have long bottom ten percent of earners in the
recognized that foreign policy goals and United States increased by 39 percent
outcomes are influenced by domestic between 1980 and 2018. The pattern is
politics. U.S. politicians often talk being repeated in middle-income and
about getting their own house in emerging-market countries, such as
Hierarchies of Weakness
China and India, with an estimated caste identity. Under India’s Hindu
two-thirds of the global population now nationalist government, discrimination
experiencing growing income inequal- and abuse based on caste have grown in
ity. A Credit Suisse report found that recent years, including a rise in violence
at the end of 2019, only one percent of against low-caste women.
the world’s adult population controlled Gender disparities and religious
over 43 percent of global personal persecution also continue to be widely
wealth, whereas 54 percent of adults prevalent. Despite progress in recent
accounted for just two percent. decades, the World Bank has estimated
Race has become another source of that some 2.4 billion working-age
social and political division. Although women worldwide still lack full eco-
racial disparities have never been far nomic rights. In 95 countries, women
from the surface in the United States have no guarantee of equal pay, and 76
and other Western democracies, they countries restrict women’s property
have received much greater scrutiny in rights. In the case of religion, repressive
recent years. The Black Lives Matter practices have not only persisted but
movement has generated worldwide appear to be growing. The Pew Re-
attention, driving activist campaigns to search Center has found that between
remove the statues of slaveholders and 2007 and 2017, the number of govern-
colonial rulers from public places, to ments imposing “high” or “very high”
seek reparations for the descendants of levels of restrictions on religion in-
enslaved people, and to remove the creased from 40 to 52, and the number
names of avowed racists from vener- of countries experiencing high levels of
able institutions. But these demands “social hostilities involving religion”
have also provoked a growing backlash jumped from 39 to 56. Notably, in a
from the nativistic right in both the number of major states, leaders increas-
United States and Europe, where racist ingly invoke their country’s civiliza-
violence has grown and racist ideas tional past in ways that encourage
have increasingly come into the main- discrimination against minority groups
stream. In the United States, laws and faiths. Consider India, where
designed to protect the economic attacks on Muslim-owned businesses
opportunities and voting rights of and Christian schools have dramatically
minorities have been rolled back. increased, or Turkey, which has wit-
Although distinct from those of race, nessed a steady erosion of secular values
hierarchies of caste—social groupings and a growing repression of religious
based on work or descent—continue to minorities, or China, which has con-
shape political and economic power in fined hundreds of thousands of Uy-
many parts of the world. The Asia Dalit ghurs, Kazakhs, and other Muslim
Rights Forum—an organization devoted minorities in “reeducation camps.”
to defending the rights of members of These social fault lines can have a
low castes—has estimated that some direct impact on international relations.
260 million people worldwide, the A country that can effectively manage
majority of them in India and Nepal, its social hierarchies can often enhance
suffer discrimination on the basis of its productivity, economic growth, and
July/August 2022 77
Amitav Acharya
political stability, thereby increasing its has been lower economic growth,
influence in the world order. A country higher social instability, and persistent
that cannot, however, may damage or racial hierarchies. The consulting firm
undercut its international standing by McKinsey & Company has estimated that
eroding other countries’ confidence in between 2019 and 2028, the wealth gap
its stability or its commitment to between Black and white Americans
international norms of social and human will cost the U.S. economy $1 trillion to
rights. Moreover, an unequal or socially $1.5 trillion in lost consumption and
restrictive internal distribution of power investment. In India, caste plays a
may also affect a country’s long-term similar role. Although caste can increase
political and economic influence. It is economic activity and efficiency in the
particularly concerning, then, that short run—through networking and
domestic social disparities remain alarm- mutual support within castes—the rigid
ingly high and in some cases appear to social hierarchies it creates restrict
be increasing in many liberal democra- capital and labor mobility. As research-
cies, including the United States. ers have pointed out, persistent caste
structures have likely reduced India’s
DIMINISHING RETURNS growth by undermining efforts to
The distribution of power within alleviate poverty and achieve greater
countries matters to the international income equality and by slowing the
order above all because of its far-reaching country’s transition to a full-fledged
economic impact. A 2014 study by the industrial economy.
Organization for Economic Coopera- Similarly large is the impact of
tion and Development, for example, gender discrimination on national
found that in the years leading up to productivity. By restricting or limiting
the 2008 global financial crisis, rising women’s access to education, business,
income inequality lowered economic politics, and other areas of economic
growth in Italy, the United Kingdom, and activity, gender discrimination also
the United States by between six and limits the labor supply. In developing
nine percentage points; for Mexico countries, this is especially true in the
and New Zealand, the loss was an even agricultural sector, where women play a
larger ten percent. The same study also critical role. Constraints on women’s
found that France, Ireland, and Spain— participation in the workforce make it
countries in which income inequality harder for low-income countries to
was kept in check—benefited from move out of poverty. But gender
higher GDP growth. barriers can affect advanced countries,
Many countries are also held back by as well. In 2016, the Organization for
racial disparities. Although the institu- Economic Cooperation and Develop-
tion of slavery once propelled the ment estimated that gender discrimina-
United States and the West to global tion costs the global economy as much
dominance—by cheapening the cost of as $12 trillion per year, or about 16
labor and boosting overall exports— percent of global GDP.
there is growing evidence that the Religious restrictions also make the
long-term legacy of this unjust system business environment in many coun-
Amitav Acharya
tries less attractive. In Egypt, for ars Weiling Jiang and Igor Martek
example, where tourists provide a major found that religious tensions ranked
source of economic activity, the tourism among the top four “significant politi-
sector has been negatively affected by cal risk factors” affecting foreign
religious conflicts, including violence investment in the energy sector in 74
between Christians and Muslims and developing countries. In countries with
between the Muslim Brotherhood and acute income inequality, citizens may
the regime of Egyptian President Abdel also be more prone to rise up against
Fattah el-Sisi. Extensive religious the government to achieve economic,
restrictions in many Arab countries— social, and political parity. Govern-
such as subjecting financial instruments ments that promote or sustain racial
to the arbitrary and inconsistent regula- and religious discrimination may also
tions of Islamic law boards—have encourage higher rates of violence or
prompted young entrepreneurs to take extremism. Notably, during the
their talents overseas. Sometimes, COVID-19 pandemic in 2020, on average,
countries’ repressive religious practices a low-caste Indian person was victim-
can also interfere with major interna- ized by a crime every ten minutes.
tional business deals. In 1999, Goldman Gender-based violence has been
Sachs had to restructure its initial particularly persistent in many coun-
public offering agreement with the tries. According to the World Health
China National Petroleum Corporation, Organization, in 2021, 27 percent of
which had investments in Sudan, after women worldwide in the 15–49 age
the U.S. Commission on International group who were in a relationship
Religious Freedom recommended experienced some form of abuse, either
sanctions on Sudan for violations of physical or sexual violence or both, by
religious freedom. (In the restructured an intimate partner. In the developing
deal, Goldman created a new company world, women suffer from specific forms
with CNPC that would operate only in of violence because of traditional social
China.) In all these ways, then, internal practices such as requiring dowries,
social divisions can have a direct impact honor killing, and genital mutilation.
on a country’s economic performance But violence against women is not
and, hence, on one of the core forms of restricted to poor countries. The UN
international power. Office on Drugs and Crime, for exam-
ple, has included Australia, Sweden, and
FROM CLEAVAGES TO CONFLICT the United Kingdom among the coun-
But the effects of social cleavages can tries that have the highest reported rates
go well beyond economic growth. of sexual violence. The United States
When social divisions are allowed to has a notably high rate of rape.
fester, they may threaten a country’s Social tensions at home are likely
underlying social and political stability. to play out internationally. States
Recent conflicts in Myanmar, Sri experiencing violence or social insta-
Lanka, Syria, and Yemen, among other bility may be limited in their ability to
places, have been driven by internal project soft power; they may also be
religious divisions. In 2021, the schol- prone to creating bilateral tensions
Hierarchies of Weakness
and undermining free-trade negotia- Enhancing religious tolerance and

tions and other forms of multilateral freedom can also affect national eco-
cooperation. Caste tensions are a nomic competitiveness. Notably, none of
perennial cause of political violence in the ten countries that the Pew Research
India, which has undercut the coun- Center has ranked as having “very high”
try’s global reputation. restrictions on religion—a group that
includes Algeria, China, Egypt, Iran,
MORE TOLERANCE, MORE POWER Malaysia, the Maldives, Russia, Syria,
Although divisions over class, race, Tajikistan, and Turkmenistan—is among
gender, and religion are increasing in the top 20 most competitive countries in
many parts of the world, evidence the World Economic Forum’s Global
suggests that when such tensions are Competitiveness Index.
reduced, countries can enhance their
international power. For example, A WARNING TO THE WEST
providing women with stronger legal Recognizing that power within can
rights and better access to health care, affect the external strength of countries
education, financial services, and offers important lessons for interna-
technology is good not just for human tional relations. For the West, the
rights or social justice but also for growth of social cleavages should come
increasing productivity. According to as a warning. As a growing body of
Oxfam, rising numbers of women in the research shows, democracy does not
paid workforce in Latin America inevitably lead to a reduction of
contributed to a 30 percent reduction in hierarchies based on income, race,
poverty between 2000 and 2010. In gender, or religion. Western democra-
2015, the McKinsey Global Institute cies as a group have not performed
estimated that the benefits to the world particularly well in any of these areas.
economy offered by the full inclusion of To the contrary, democratic institu-
women in the paid workforce would tions can provide cover for social
equal $28 trillion by 2025. divisions and allow them to be ex-
Countries can make similar gains by ploited for political gain, as has oc-
eliminating racial disparities. A study curred in the United States and else-
by the think tank PolicyLink and the where in recent years. As these
University of Southern California disparities become more pronounced,
found that removing the pay gap moreover, they also weaken the ability
between racial groups would increase of the West to counter the spread of
U.S. economic growth by 14 percent; autocracy. For example, scholars have
the Washington Center for Equitable noted that rising income inequality has
Growth has estimated that reducing contributed to the eroding appeal of
racial, ethnic, and gender gaps could the liberal international order.
add $7.2 trillion a year to U.S. GDP. These trends are not irreversible. In
Such benefits would need to be weighed contrast to their nondemocratic coun-
against the costs of government spend- terparts, advanced democracies have the
ing to equalize pay, but the rewards capacity to self-correct and challenge
would still be substantial. persistent social hierarchies. Because of
July/August 2022 81
Amitav Acharya
their greater transparency, freedom of go beyond specific disparities to ad-

expression, and culture of open debate, dress the conditions that lead to all
democratic societies can expose these types of social hierarchies.
divisions, and their electorates can Reducing social cleavages will not
change governments that are viewed as eliminate differences in power and
unwilling or unable to address the root status among countries. But those that
causes. Yet in the United States, Eu- better develop and harness their power
rope, and elsewhere, democracies have within by ensuring fairer wage distribu-
been constrained by political polarization and curbing discriminatory prac-
tion and the rise of right-wing popu- tices—and therefore maximizing
lism, which have made it increasingly growth—are likely to enjoy greater
difficult to form a political consensus to stability and influence in the long run.
tackle cleavages based on class, race, Such efforts will need to begin at home,
gender, and religion. At the same time, including in the United States and in
many advanced countries have estab- many of its European allies. But given
lished economic interests that may have the prevalence of these divisions in
a stake in reinforcing existing practices. many countries, lasting progress is
Of course, internal power structures unlikely to be achieved through domes-
can also limit the influence of many tic politics alone. Stepped-up global
non-Western countries. Brazil, China, cooperation will be needed, including
India, Russia, and South Africa are collective efforts to strengthen interna-
particularly striking examples of tional human rights agreements and
countries with large economies and other international rules aimed at
significant socioeconomic disparities preventing discrimination on the basis
based on caste, gender, and religious of race, caste, gender, and religious
identity. According to the World Bank, belief. Since all countries, rich and
South Africa is the most unequal poor, suffer from these disparities,
country in the world, with the wealthi- reform efforts can and should be framed
est one percent of the population as a common challenge of humankind.
holding 80.6 percent of the country’s By creating a more level playing field
financial assets. This is important not among social groups, the United States
only because of the link between and other members of the liberal
income inequality and low growth but international order can better mobilize
also because of the incentive it creates their power within and promote their
for corruption and instability. In many collective ability to enhance stability
countries, moreover, different types of and peace in the world as a whole.∂
social hierarchies often appear in
tandem and are mutually reinforcing.
Income inequality, for example, often
correlates with racial, caste, gender, and
religious discrimination. Racial preju-
dice is a trigger for religious intoler-
ance and vice versa. Hence, policymak-
ers will need to develop strategies that
Can Putin Survive?

The Lessons of the Soviet Collapse
Vladislav Zubok
O
n May 9, 2022, a column of tanks and artillery thundered
down Moscow’s Red Square. Over 10,000 soldiers marched
through the city’s streets. It was Russia’s 27th annual Victory
Day parade, in which the country commemorates the Soviet Union’s
triumph over Nazi Germany in World War II. Russian President
Vladimir Putin, presiding over the ceremonies, gave a speech praising
his country’s military and fortitude. “The defense of our motherland
when its destiny was at stake has always been sacred,” he said. “We
will never give up.” Putin was speaking about the past but also about
the present, with a clear message to the rest of the world: Russia is
determined to continue prosecuting its war against Ukraine.
The war looks very different in Putin’s telling than it does to the
West. It is just and courageous. It is successful. “Our warriors of differ-
ent ethnicities are fighting together, shielding each other from bullets
and shrapnel like brothers,” Putin said. Russia’s enemies had tried to
use “international terrorist gangs” against the country, but they had
“failed completely.” In reality, of course, Russian troops have been met
by fierce local resistance rather than outpourings of support, and they
were unable to seize Kyiv and depose Ukraine’s government. But for
Putin, victory may be the only publicly acceptable result. No alternate
outcomes are openly discussed in Russia.
They are, however, discussed in the West, which has been near jubi-
lant about Ukraine’s success. Russia’s military setbacks have reinvigo-
rated the transatlantic alliance and, for a moment, made Moscow look
like a kleptocratic third-rate power. Many policymakers and analysts are
now dreaming that the conflict could ultimately end not just in a Ukrai-
nian victory; they are hoping Putin’s regime will suffer the same fate as
VLADISLAV ZUBOK is Professor of International History at the London School of Econom-
ics and the author of Collapse: The Fall of the Soviet Union.
Can Putin Survive?
the Soviet Union: collapse. This hope is evident in the many articles
and speeches drawing comparisons between the Soviet Union’s disas-
trous war in Afghanistan and Russia’s invasion of Ukraine. It appears to
be a latent motivation for the harsh sanctions imposed on Russia, and it
underlines all the recent talk of the democratic world’s new unity. The
war, the logic goes, will sap public support for the Kremlin as losses
mount and sanctions destroy the Russian economy. Cut off from access
to Western goods, markets, and culture, both elites and ordinary Rus-
sians will grow increasingly fed up with Putin, perhaps taking to the
streets to demand a better future. Eventually, Putin and his regime may
be shunted aside in either a coup or a wave of mass protests.
This thinking is based on a faulty reading of history. The Soviet
Union did not collapse for the reasons Westerners like to point to: a
humiliating defeat in Afghanistan, military pressure from the United
States and Europe, nationalistic tensions in its constituent republics,
and the siren song of democracy. In reality, it was misguided Soviet
economic policies and a series of political missteps by Soviet leader
Mikhail Gorbachev that caused the country to self-destruct. And Pu-
tin has learned a great deal from the Soviet collapse, managing to
avoid the financial chaos that doomed the Soviet state despite intense
sanctions. Russia today features a very different combination of resil-
ience and vulnerability than the one that characterized the late-era
Soviet Union. This history matters because in thinking about the war
in Ukraine and its aftermath, the West should avoid projecting its
misconceptions about the Soviet collapse onto present-day Russia.
But that doesn’t mean the West is helpless in shaping Russia’s fu-
ture. Putin’s regime is more stable than Gorbachev’s was, but if the
West can stay unified, it may still be able to slowly undermine the
Russian president’s power. Putin grossly miscalculated by invading
Ukraine, and in doing so he has exposed the regime’s vulnerabilities—
an economy that is much more interdependent with Western econo-
mies than its Soviet predecessor ever was and a highly concentrated
political system that lacks the tools for political and military mobiliza-
tion possessed by the Communist Party. If the war grinds on, Russia
will become a less powerful international actor. A prolonged invasion
may even lead to the kind of chaos that brought down the Soviet
Union. But Western leaders cannot hope for such a quick, decisive
victory. They will have to deal with an authoritarian Russia, however
weakened, for the foreseeable future.
July/August 2022 85
Vladislav Zubok
CREATIVE DESTRUCTION
In the United States and Europe, many experts assume that the col-
lapse of the Soviet Union was preordained. In this narrative, the Soviet
Union had long been fossilized economically and ideologically, its mili-
tary overextended. It took time for the economic flaws and internal
contradictions to tear the state apart, but as the West increased pressure
on the Kremlin through military buildups, the country began to buckle.
And as national self-determination movements in the constituent re-
publics gained steam, it began to break. Gorbachev’s attempts at liber-
alization, well intentioned as they were, could not save a dying system.
There is some truth to this story. The Soviet Union could never
successfully compete militarily or technologically with the United
States and its allies. Soviet leaders performed Sisyphean labor to
catch up with the West, but their country always lagged behind. On
the battlefield of ideas and images, Western freedom and prosper-
ity did help accelerate the demise of communist ideology, as
younger Soviet elites lost faith in communism and gained a keen
interest in coveted foreign goods, travel, and Western popular cul-
ture. And the Soviet imperial project certainly faced discontent
and disdain from internal ethnic minorities.
Yet these were not new problems, and by themselves, they were not
enough to rapidly force the Communist Party out of power at the end
of the 1980s. In China, communist leaders faced a similar set of crises
at roughly the same time, but they responded to rising discontent by
liberalizing the Chinese economy while using force to put down mass
protests. This combination—capitalism without democracy—worked,
and the leaders of the Chinese Communist Party now rule cynically
and profit from state capitalism while posing under portraits of Karl
Marx, Vladimir Lenin, and Mao Zedong. Other communist regimes,
such as the one in Vietnam, made similar transitions.
In reality, the Soviet Union was destroyed not so much by its struc-
tural faults as by the Gorbachev-era reforms themselves. As the econ-
omists Michael Bernstam, Michael Ellman, and Vladimir Kontorovich
have all argued, perestroika unleashed entrepreneurial energy but not
in a way that created a new market economy and filled shelves for
Soviet consumers. Instead, the energy turned out to be destructive.
Soviet-style entrepreneurs hollowed out the state’s economic assets
and exported valuable resources for dollars while paying taxes in ru-
bles. They siphoned revenues to offshore sites, paving the way for
Can Putin Survive?
oligarchic kleptocracy. Commercial banks quickly learned ingenious

ways to milk the Soviet state, leading the central bank to print more
and more rubles to cover the commercial banks’ financial obligations
as the government deficit expanded. In 1986 and 1987, as vodka sales
and oil prices fell and the country reeled in the wake of the Chernobyl
nuclear disaster, the Ministry of Finance printed only 3.9 billion and
5.9 billion rubles, respectively. But in 1988 and 1989, when Gorbachev’s
reforms were enacted, the injections of ruble liquidity increased to
11.7 billion and then to 18.3 billion.
Gorbachev and other reformers plowed ahead anyway. The Soviet
leader delegated more political and economic authority to the 15 re-
publics that constituted the union. He removed the Communist Party
from governance and authorized elections in each of the republics for
councils vested with legislative and constitutional authority. Gor-
bachev’s design was well meaning, yet it magnified economic chaos and
financial destabilization. Russia and the other republics withheld two-
thirds of the revenues that were supposed to go to the federal budget,
forcing the Soviet finance ministry to print 28.4 billion rubles in 1990.
The Soviet ruling class, meanwhile, decomposed into ethnic clans: the
communist elites in the various republics—Kazakhs, Lithuanians,
Ukrainians, and others—began to identify more with their “nations”
than with the imperial center. Nationalist separatism rose like a flood.
The change of heart was particularly striking in the case of the Rus-
sians. During World War II, the Russians had done most of the fight-
ing on behalf of the Soviet Union, and many in the West saw the
communist empire as a mere extension of Russia. But in 1990–91, it
was primarily tens of millions of Russians, led by Boris Yeltsin, who
tore down the Soviet state. They were an eclectic group, including
liberal-minded intellectuals from Moscow, provincial Russian appara
tchiks, and even KGB and military officers. What united them was their
rejection of Gorbachev and his failing governance. The Soviet leader’s
perceived weakness, in turn, prompted an attempted coup in August
1991. The organizers put Gorbachev under house arrest and sent tanks
into Moscow in hopes of shocking people into submission, but they
failed on both fronts. Instead, they hesitated to use brutal force and
inspired mass protests against the Kremlin’s control. What followed
was the self-destruction of the Soviet Union’s power structures. Yeltsin
pushed Gorbachev aside, banned the Communist Party, and acted as a
sovereign ruler. On December 8, 1991, Yeltsin and the leaders of Be-
July/August 2022 87
Vladislav Zubok
larus and Ukraine declared that the Soviet Union had “ceased to exist
as a subject of international law and geopolitical reality.”
But without Yeltsin’s declaration, the Soviet Union might have sol-
diered on. Even after it ceased to formally exist, the empire continued
to live for years as a common ruble zone with no borders and customs.
Post-Soviet states lacked financial independence. Even after national
independence referendums, followed by celebrations of newfound free-
dom, it took decades for tens of millions of former Soviet citizens out-
side Russia to develop postimperial identities, to think and act like
citizens of Belarus, Ukraine, and the other new states. In this sense, the
Soviet Union proved to be more resilient than brittle. It was no different
from other empires in that it took decades, not months, to disintegrate.
LEARNING FROM THE PAST

Putin is deeply familiar with this history. The Russian president once
declared that “the demise of the Soviet Union was the greatest geopo-
litical catastrophe” of the twentieth century, and he has structured his
regime to avoid the same fate. He recognized that Marx and Lenin
were wrong about economics, and he energetically worked to figure
out how Russia could survive and thrive under global capitalism. He
brought in capable economists and made macroeconomic stability and
having a balanced budget among his top priorities. During the first
decade of his rule, soaring oil prices filled Russia’s coffers, and Putin
quickly finished paying back the $130 billion in debt Russia owed to
Western banks. He kept future debts to a minimum, and his govern-
ment began to accumulate reserves in foreign currency and gold.
Those precautions paid off during the global financial crisis of 2008,
when Russia was able to comfortably bail out corporations vital to its
economy (all of which were run by Putin’s associates).
After Putin annexed Crimea in 2014, the United States imposed
sanctions on Russian oil and other industries, and oil prices plum-
meted as much as they did under Gorbachev. But the Russian gov-
ernment reacted skillfully. Under the leadership of Central Bank
Chair Elvira Nabiullina and Finance Minister Anton Siluanov, the
government allowed the ruble to devalue, restoring macroeconomic
stability. After a brief dip, the Russian economy rebounded. Even
during the COVID-19 pandemic, the country maintained strict fiscal
discipline. While Western states printed trillions of dollars to subsi-
dize their economies, Russia increased its budget surplus. The gov-
Vladislav Zubok
ernment’s economists “are holier than the Pope in applying” the

approach advocated by the International Monetary Fund, said Dmi-
try Nekrasov, a former Russian state economist. “During the last ten
years there has been no country in the world that would have con-
ducted such a consistent, conservative, and hard-principled policy
drawn on [a] liberal model of macroeconomics.” By 2022, Putin’s
state had accumulated more than $600 billion in financial reserves,
one of the largest stashes in the world.
But for Putin, the primary purpose of this sound financial poli-
cymaking was not to earn international plaudits or even to help
ordinary Russians keep their savings. The point was to bolster his
power. Putin used the accumulated reserves to restore the sinews of
the authoritarian state by building up the security services, expand-
ing Russia’s military and armament industry, and paying off the
head of Chechnya, Ramzan Kadyrov, and his paramilitary—another
pillar of the Kremlin’s dictatorship.
When Putin decided to invade Ukraine earlier this year, he be-
lieved Russia’s large reserves would allow the country to ride out
whatever sanctions resulted. But the West’s financial response was
far harsher than he expected—even ardent anti-Russian hawks in
the West were surprised. The West and its allies cut off a number of
major Russian banks from SWIFT, the international payment clear-
ing network, and froze $400 billion in Russian international re-
serves that were physically stored in G-7 countries. Washington
and its allies also blocked a host of manufacturing companies from
working with the Russian government or Russian businesses. Over
700 Western manufacturing and retail corporations walked out of
Russia on their own, shamed by public opinion in their home coun-
tries. Large international transportation and financial firms and in-
termediaries stopped working with companies linked to Moscow.
The decoupling is unlike anything the world has seen since the
blockades of Germany and Japan during World War II.
In the West, these actions were met with euphoria. Pundits de-
clared that Russia’s currency would collapse and that there would be
broad protests. Some even speculated that Putin could be toppled.
But none of those scenarios came to pass. The ruble did initially tank,
but Nabiullina and Siluanov acted quickly to save it. The Russian
state suspended the currency’s free convertibility and decreed that 80
percent of the oil revenue made by Russian companies and other ex-
Can Putin Survive?
porters (including revenue made in dollars) had to be sold to the cen-

tral bank. It banned Russian citizens from wiring more than $10,000
abroad per month, quashing the panicky rush to convert rubles to
dollars, and the Russian currency eventually bounced all the way back
to pre-invasion levels. Had Gorbachev been assisted by such exper-
tise, the Soviet Union might have survived.
Russia’s entrepreneurs, meanwhile, are learning how to adapt to
their new reality. Many of the front doors to the international econ-
omy have shut, but Russia’s businesspeople—including those who
run its arms industry—know how to use backdoors to find what they
need. Russian businesses also still enjoy legal access to multiple ma-
jor economies, including those of China and India, both of which
remain willing to do business with Russia. There is little economic
reason for them not to: the strength of the ruble makes it profitable
to buy Russian energy and other materials at a discount. The Russian
government can then tax these profits and enforce their conversion
to rubles, further maintaining the country’s solvency. In the short
term, then, it is unlikely that the West’s harsh sanctions will kill the
ruble and force the Kremlin to yield.
DIVIDE AND CONQUER

Western penalties may not be shifting Moscow’s thinking. But they
are unmistakably hurting parts of Russia’s population: namely, the
country’s elites and the urban middle class. Governments, universi-
ties, and other institutions around the world have canceled thousands
of scientific and scholarly projects with Russian researchers. Services
that were woven into the lives of many white-collar Russians—from
Facebook to Netflix to Zoom—are suddenly unavailable. Russians
cannot upgrade their MacBooks or iPhones. It has become extremely
hard for them to get visas to enter the United Kingdom or the Euro-
pean Union, and even if they succeed, there are no direct flights or
trains that can take them there. They can no longer use their credit
cards abroad or pay for foreign goods and services. For the country’s
cosmopolitans, Russia’s invasion has made life quite difficult.
At first glance, this might seem to bode ill for Putin. During the
Soviet political crisis of 1990–91, members of the middle and upper
classes played a huge role in bringing about the collapse of the state.
Hundreds of thousands of educated Soviets rallied in the main squares
of Moscow and St. Petersburg, demanding change. A new Russian
July/August 2022 91
Vladislav Zubok
elite, one that embraced nationalism and cast itself in opposition to

the Soviet old guard, gained power after elections held in 1990. The
country’s knowledge workers and intelligentsia teamed up with this
new elite to help bring the empire down.
But Gorbachev tolerated, and arguably encouraged, such political ac-
tivism. Putin does not. Unlike Gorbachev, who allowed opponents to
contest elections, Putin has worked to prevent any Russians from emerg-
ing as credible threats—most recently, by poisoning and then arresting
the opposition leader Alexei Navalny in August 2021. There have been no
demonstrations against the war on the scale that Gorbachev allowed,
thanks in no small part to the ruthless efficiency of Russia’s security ser-
vices. The enforcers of Putin’s police state have the power and the skills
needed to suppress any street protests, including through intimidation,
arrests, and other assorted punishments, such as hefty fines. And the
Russian state is aggressively pushing to control its people’s minds. In the
first days after the invasion, Russia’s legislature passed laws criminalizing
open discussion and the dissemination of information about the war. The
government forced the country’s independent news outlets to shut down.
But these are just the most visible tools of Putin’s system of con-
trol. Like many other authoritarians, the Russian president has also
learned to exploit economic inequality to establish a firm base of sup-
port, leaning into the differences between what the Russian scholar
Natalya Zubarevich calls “the four Russias.” The first Russia consists
of urbanites in large cities, many of whom work in the postindustrial
economy and are culturally connected to the West. They are the source
of most opposition to Putin, and they have staged protests against the
president before. But they constitute just one-fifth of the population,
by Zubarevich’s estimate. The other three Russias are the residents of
poorer industrial cities, who are nostalgic for the Soviet past; people
who live in declining rural towns; and multiethnic non-Russians in
the North Caucasus (including Chechnya) and southern Siberia. The
inhabitants of those three Russias overwhelmingly support Putin be-
cause they depend on subsidies from the state and because they ad-
here to traditional values when it comes to hierarchy, religion, and
worldview—the kinds of cultural positions that Putin has championed
in the Kremlin’s imperialist and nationalist propaganda, which has
gone into overdrive since the invasion of Ukraine began.
Putin, then, doesn’t need to engage in mass repression to keep him-
self in command. Indeed, recognizing the seeming futility of oppos-
Can Putin Survive?
ing the state, many members of the first Russia who are truly fed up
with Putin are simply fleeing the country—a development that Putin
openly supports. He has declared their departure to be “a natural and
necessary self-purification of [Russian] society” from a pro-Western
“fifth column.” And so far, the invasion has done little to erode his
support among the other three Russias. Most members of those
groups do not feel connected to the global economy, and they are
therefore relatively unbothered by Russia’s excommunication by the
West via sanctions and bans. To maintain these groups’ support, Putin
can continue to subsidize some regions and pour billions into infra-
structure and construction projects in others.
He can also appeal to their conservative and nostalgic sentiments—
something Gorbachev could never do. Russia’s turbulent history has
led most of its people to want a strong leader and consolidation of the
country—not democracy, civil rights, and national self-determina-
tion. Gorbachev, however, was no strongman. The Soviet leader was
driven by an extraordinarily idealistic vision and refused to use force
to maintain his empire. He mobilized the most progressive groups of
Russian society, above all the intelligentsia and urban professionals,
to help him yank the Soviet Union out of its isolation, stagnation,
and conservative moorings. But in doing so, he lost the support of the
rest of Russia and was forced out of office, leaving behind a legacy of
economic crisis, statelessness, chaos, and secession. The life expec-
tancy of Russians dropped from 69 years in 1990 to 64.5 years in
1994; for males, the plunge was from 64 years down to 58 years. Rus-
sia’s population declined, and the country faced food shortages. It is
no wonder that so many Russians wanted a strongman like Putin,
who promised to protect them from a hostile world and to restore the
Russian empire. In the weeks after the invasion of Ukraine, the Rus-
sian people’s knee-jerk reaction was to rally around the tsar, not to
accuse him of unprovoked aggression.
UNDER PRESSURE
None of this bodes well for Westerners who want Putin’s system to
fall—or for the Ukrainians fighting to defeat the Russian military ma-
chine. But even though the Soviet Union’s collapse may not offer a
preview of Russia’s trajectory, that doesn’t mean the West’s actions will
have no impact on the country’s future. There is a consensus among
both Western and savvy Russian economists that in the long term, the
July/August 2022 93
Vladislav Zubok
sanctions will cause Russia’s economy to shrink as supply chain disrup-

tions mount. The country’s transportation and communications indus-
tries are especially vulnerable. Russia’s passenger aircraft, fastest trains,
and most of its automobiles are made in the West, and they are now cut
off from the companies that know how to service and maintain them.
Even official government statistics indicate that the assembly of new
cars in Russia has fallen precipitously—at least partly because Russian
factories are cut off from foreign-made parts. The Russian military-
industrial complex may continue to go on unimpeded for now, but it,
too, will eventually face shortages. In the past, Western companies
continued to supply Russian arms manufacturers, even after Russia
annexed Crimea. Now, if for ethical reasons alone, they won’t.
The Russian energy sector has largely escaped the penalties, and
as prices soar, it is making more money on exports than it did before
the war. But eventually, energy output will also deteriorate, and the
energy sector, too, will need spare parts and technological upgrades
that only the West can properly offer. The Russian authorities have
admitted that the country’s oil output declined by 7.5 percent in
March and may go down to levels not seen since 2003. Selling energy
is likely to become a problem as well, especially if the European
Union can wean itself from Russian oil and gas.
Putin denies that this will happen. At a meeting with the heads of the
energy corporations, he referred to Western sanctions as “chaotic” and
asserted that they would hurt Western economies and consumers more
than Russians because of inflation. He even spoke about Europe’s “eco-
nomic suicide” and promised to stay ahead of the West’s anti-Russian
actions. He has also convinced himself that the West no longer calls the
shots in the global economy, given the world’s increasing multipolarity.
He is not alone; even Russian economists who oppose Putin are con-
vinced that as long as the country’s finances are in good shape, the rest
of the world—including some Western companies, traders, and interme-
diaries—will risk violating the sanctions to do business with Russia. As
the global economy sags under the weight of the war and as international
shock over the invasion fades, they believe that Russia’s relationship with
the world will return to normal, just as it did after 2014.
But the West appears prepared to keep going. One day before
Putin celebrated Victory Day, the G-7 leaders issued a declaration
in support of Ukraine in which they recognized the country as an
ally of the West and pledged financial support, a steady supply of
Can Putin Survive?
arms, access to NATO intelligence, and, critically, continued eco-

nomic pressure on Russia. The key of the declaration was, indeed,
an announcement that they would work toward “Russia’s isolation
across all sectors of its economy.” It echoes what Ursula von der
Leyen, the head of the European Commission, described as the EU’s
goals: to stop Russian banks “from operating worldwide,” to “effec-
tively block Russian exports and imports,” and to “make it impossi-
ble for the [Russian] Central Bank to liquidate its assets.”
It won’t be easy to maintain this level of unity, nor will it be easy to
expand the pressure to more of Russia’s sectors—such as by instituting
an EU embargo on Russian oil and gas. Several countries, including
Hungary (whose prime minister, Viktor Orban, remains one of Putin’s
few friends in Europe) as well as Germany and Italy, are aware that an
energy embargo would deal a huge blow to their economies. And even
if Europe does institute an energy ban, it will not lead to an immediate
crisis in Russia. The Soviet Union, after all, experienced a drastic drop
in oil revenues in the late 1980s, but that is not what bankrupted the
country. It was, instead, Gorbachev’s loss of control over the central
bank, the ruble, and the country’s fiscal mechanisms. As long as Putin
retains power over these assets and follows professional advice, a fall in
energy profits will not undermine the resilience of his regime.
But if the West is serious about stopping Putin, it will have to try
to keep up the pressure anyway. The longer the sanctions go on and
the harsher they grow, the more the West’s anti-Russian economic
regime will be implemented and internalized by other actors in the
global economy. States and companies outside the West will grow
more concerned about secondary sanctions. Some of the businesses
may even worry about their reputations. The Chinese telecommuni-
cations giant Huawei has already suspended new contracts with Rus-
sia. Indian firms that indicated a readiness to buy Russian oil at a 30
percent discount are now under intense pressure to back off.
If the sanctions regime does drag on and becomes institutionalized,
the West may yet succeed in undermining Putin’s system. Moscow’s
talented economists will eventually become unable to shield the coun-
try from devastating macroeconomic impacts. Even with trillions of
dollars in investment in infrastructure projects or other stimulus mea-
sures, the Russian state will be unable to overcome the effects of ex-
clusion as the costs of these projects, especially with the accompanying
corruption, balloon. Without foreign know-how, the efficiency of pro-
July/August 2022 95
Vladislav Zubok
ducing Russian goods and their quality will return to where they were
in the early 1990s. The three Russias dependent on the state for their
livelihoods will then acutely feel their country’s growing weakness
and isolation in a way that, for now, they do not. People may even
struggle to put food on the table. This would all seriously undermine
Putin’s story: that he is the essential leader of a “sovereign and great
Russia,” which has “risen from its knees” under his tenure.
In the long term, it is possible to imagine this seriously weakening
the Russian state. Separatism could rise or return to some regions,
such as Chechnya, if the Kremlin stops paying their residents’ bills.
Tensions will generally grow between Moscow—where money is
amassed—and the industrial cities and regions that depend on im-
ports and exports. This is most likely to happen in Eastern Siberia
and the mid-Volga, oil-producing regions that could find themselves
forced to give ever-larger shares of shrinking profits to the Kremlin.
Still, even a much weaker Russia is not destined to suffer a
Soviet Union–style breakup. National separatism is not nearly as much
of a threat to present-day Russia, where roughly 80 percent of the
country’s citizens consider themselves to be ethnic Russians, as it was
to the Soviet Union. Moscow’s strong repressive institutions could also
ensure that Russia does not experience regime change, or at least not
the same kind of regime change that took place in 1991. And Russians,
even if they turn against the war, would probably not go on another
rampage to destroy their own state.
The West should nonetheless stay the course. The sanctions will
gradually drain Russia’s war chest and, with it, the country’s capacity
to fight. Facing mounting battlefield setbacks, the Kremlin may agree
to an uneasy armistice. But the West must also stay realistic. Only a
hardcore determinist can believe that in 1991, there were no alterna-
tives to the Soviet collapse. In fact, a much more logical path for the
Soviet state would have been continued authoritarianism combined
with radical market liberalization and prosperity for select groups—
not unlike the road China has taken. Similarly, it would be determin-
istic for the West to expect that a weakened Russia would fall. There
will at least be a period in which Ukraine and the West have to coex-
ist with a weakened and humiliated but still autocratic Russian state.
Western policymakers must prepare for this eventuality rather than
dreaming of collapse in Moscow.∂
The Consequences of
Conquest
Why Indo-Pacific Power Hinges on Taiwan
Brendan Rittenhouse Green and
Caitlin Talmadge
O
f all the intractable issues that could spark a hot war between the
United States and China, Taiwan is at the very top of the list. And
the potential geopolitical consequences of such a war would be
profound. Taiwan—“an unsinkable aircraft carrier and submarine tender,”
as U.S. Army General Douglas MacArthur once described it—has impor-
tant, often underappreciated military value as a gateway to the Philippine
Sea, a vital theater for defending Japan, the Philippines, and South Korea
from possible Chinese coercion or attack. There is no guarantee that China
would win a war for the island—or that such a conflict wouldn’t drag on for
years and weaken China. But if Beijing gained control of Taiwan and based
military assets there, China’s military position would improve markedly.
Beijing’s ocean surveillance assets and submarines, in particular,
could make control of Taiwan a substantial boon to Chinese military
power. Even without any major technological or military leaps, pos-
session of the island would improve China’s ability to impede U.S.
naval and air operations in the Philippine Sea and thereby limit the
United States’ ability to defend its Asian allies. And if, in the future,
Beijing were to develop a large fleet of quiet nuclear attack subma-
rines and ballistic missile submarines, basing them on Taiwan would
BRENDAN RITTENHOUSE GREEN is Associate Professor of Political Science at the

University of Cincinnati.
CAITLIN TALMADGE is Associate Professor of Security Studies at the Walsh School of

Foreign Service at Georgetown University.
This essay is adapted from their forthcoming article in International Security (Summer 2022).
July/August 2022 97
enable China to threaten Northeast Asian shipping lanes and

strengthen its sea-based nuclear forces.
Clearly, the island’s military value bolsters the argument for keeping
Taiwan out of China’s grasp. The strength of that case, however, depends
on several factors, including whether one assumes that China would pur-
sue additional territorial expansion after occupying Taiwan and make the
long-term military and technological investments needed to take full
advantage of the island. It also depends on the broader course of U.S.
China policy. Washington could remain committed to its current ap-
proach of containing the expansion of Chinese power through a combi-
nation of political commitments to U.S. partners and allies in Asia and a
significant forward military presence. Or it might adopt a more flexible
policy that retains commitments only to core treaty allies and reduces
forward deployed forces. Or it might reduce all such commitments as
part of a more restrained approach. Regardless of which of these three
strategies the United States pursues, however, Chinese control of Tai-
wan would limit the U.S. military’s ability to operate in the Pacific and
would potentially threaten U.S. interests there.
But the issue is not just that Taiwan’s tremendous military value poses
problems for any U.S. grand strategy. It is that no matter what Washing-
ton does—whether it attempts to keep Taiwan out of Chinese hands or
not—it will be forced to run risks and incur costs in its standoff with
Beijing. As the place where all the dilemmas of U.S. policy toward China
collide, Taiwan presents one of the toughest and most dangerous prob-
lems in the world. Simply put, Washington has few good options there
and a great many bad ones that could court calamity.
TAIWAN IN THE BALANCE

A Chinese assault on Taiwan could shift the military balance of power
in Asia in any number of ways. If China were to take the island swiftly
and easily, many of its military assets geared toward a Taiwan campaign
might be freed up to pursue other military objectives. China might also
be able to assimilate Taiwan’s strategic resources, such as its military
equipment, personnel, and semiconductor industry, all of which would
bolster Beijing’s military power. But if China were to find itself bogged
down in a prolonged conquest or occupation of Taiwan, the attempt at
forced unification might become a significant drag on Beijing’s might.
Any campaign that delivers Taiwan to China, however, would allow
Beijing to base important military hardware there—in particular, under-
The Consequences of Conquest
water surveillance devices and submarines, along with associated air and
coastal defense assets. Stationed in Taiwan, these assets would do more
than simply extend China’s reach eastward by the length of the Taiwan
Strait, as would be the case if China based missiles, aircraft, unmanned
aerial vehicles, or other weapons systems on the island. Underwater sur-
veillance and submarines, by contrast, would improve Beijing’s ability to
impede U.S. operations in the Philippine Sea, an area that would be of
vital importance in many possible future conflict scenarios involving China.
The most likely scenarios revolve around the United States defending
its allies along the so-called first island chain off the Asian mainland,
which starts north of Japan and runs southwest through Taiwan and the
Philippines before curling up toward Vietnam. For example, U.S. naval
operations in these waters would be essential to protecting Japan against
potential Chinese threats in the East China Sea and at the southern end
of the Ryukyu Islands. Such U.S. operations would also be important in
most scenarios for defending the Philippines, and for any scenario that
might lead to U.S. strikes on the Chinese mainland, such as a major
conflagration on the Korean Peninsula. U.S. naval operations in the
Philippine Sea will become even more important as China’s growing
missile capabilities render land-based aircraft and their regional bases
increasingly vulnerable, forcing the United States to rely more heavily
on aircraft and missiles launched from ships.
If a war in the Pacific were to break out today, China’s ability to conduct
effective over-the-horizon attacks—that is, attacks targeting U.S. ships at
distances that exceed the line of sight to the horizon—would be more
limited than commonly supposed. China might be able to target forward-
deployed U.S. aircraft carriers and other ships in a first strike that com-
mences a war. But once a conflict is underway, China’s best surveillance
assets—large radars located on the mainland that allow China to “see”
over the horizon—are likely to be quickly destroyed. The same is true of
Chinese surveillance aircraft or ships in the vicinity of U.S. naval forces.
Chinese satellites would be unlikely to make up for these losses. Using
techniques the United States honed during the Cold War, U.S. naval
forces would probably be able to control their own radar and communica-
tions signatures and thereby avoid detection by Chinese satellites that
listen for electronic emissions. Without intelligence from these specialized
signal-collecting assets, China’s imaging satellites would be left to ran-
domly search vast swaths of ocean for U.S. forces. Under these conditions,
U.S. forces operating in the Philippine Sea would face real but tolerable
July/August 2022 99
risks of long-range attacks, and U.S. leaders probably would not feel im-
mediate pressure to escalate the conflict by attacking Chinese satellites.
If China were to wrest control of Taiwan, however, the situation
would look quite different. China could place underwater microphones
called hydrophones in the waters off the island’s east coast, which are
much deeper than the waters Beijing currently controls inside the first
island chain. Placed at the appropriate depth, these specialized sensors
could listen outward and detect the low-frequency sounds of U.S. sur-
face ships thousands of miles away, enabling China to more precisely
locate them with satellites and target them with missiles. (U.S. subma-
rines are too quiet for these hydrophones to detect.) Such capabilities
could force the United States to restrict its surface ships to areas outside
the range of the hydrophones—or else carry out risky and escalatory at-
tacks on Chinese satellites. Neither of these options is appealing.
Chinese hydrophones off Taiwan would be difficult for the United
States to destroy. Only highly specialized submarines or unmanned
underwater vehicles could disable them, and China would be able to
defend them with a variety of means, including mines. Even if the
United States did manage to damage China’s hydrophone cables,
Chinese repair ships could mend them under the cover of air de-
fenses China could deploy on the island.
The best hope for disrupting Chinese hydrophone surveillance
would be to attack the vulnerable processing stations where the data
comes ashore via fiber-optic cables. But those stations could prove hard
to find. The cables can be buried on land as well as under the sea, and
nothing distinguishes the buildings where data processing is done from
similar nondescript military buildings. The range of possible U.S. tar-
gets could include hundreds of individual structures inside multiple
well-defended military locations across Taiwan.
Control of Taiwan would do more than enhance Chinese ocean surveil-
lance capabilities, however. It would also give China an advantage in sub-
marine warfare. With Taiwan in friendly hands, the United States can
defend against Chinese attack submarines by placing underwater sensors
in key locations to pick up the sounds the submarines emit. The United
States likely deploys such upward-facing hydrophones—for listening at
shorter distances—along the bottom of narrow chokepoints at the entrances
to the Philippine Sea, including in the gaps between the Philippines, the
Ryukyu Islands, and Taiwan. At such close ranges, these instruments can
briefly detect even the quietest submarines, allowing U.S. air and surface
assets to trail them. During a crisis, that could prevent Chinese submarines
from getting a “free shot” at U.S. ships in the early stages of a war, when
forward-deployed U.S. naval assets would be at their most vulnerable.
If China were to gain control of Taiwan, however, it would be able to
base submarines and supporting air and coastal defenses on the is-
land. Chinese submarines would then be able to slip from their pens
in Taiwan’s eastern deep-water ports directly into the Philippine Sea, by-
passing the chokepoints where U.S. hydrophones would be listening.
Chinese defenses on Taiwan would also prevent the United States and its
allies from using their best tools for trailing submarines—maritime patrol
aircraft and helicopter-equipped ships—near the island, making it much
easier for Chinese submarines to strike first in a crisis and reducing their
attrition rate in a war. Control of Taiwan would have the added advantage
of reducing the distance between Chinese submarine bases and their pa-
trol areas from an average of 670 nautical miles to zero, enabling China to
operate more submarines at any given time and carry out more attacks
against U.S. forces. Chinese submarines could also make use of the more
precise targeting data collected by hydrophones and satellites, dramati-
cally improving their effectiveness against U.S. surface ships.
UNDER THE SEA

Over time, unification with Taiwan could offer China even greater military
advantages if it were to invest in a fleet of much quieter advanced nuclear
attack and ballistic missile submarines. Operated from Taiwan’s east coast,
these submarines would strengthen China’s nuclear deterrent and allow it
to threaten Northeast Asian shipping and naval routes in the event of a war.
Currently, China’s submarine force is poorly equipped for a campaign
against the oil and maritime trade of U.S. allies. Global shipping has
traditionally proved resilient in the face of such threats because it is pos-
sible to reroute vessels outside the range of hostile forces. Even the clo-
sure of the Suez Canal between 1967 and 1975 did not paralyze global
trade, since ships were instead able to go around the Cape of Good
Hope, albeit at some additional cost. This resiliency means that Beijing
would have to target shipping routes as they migrated north or west
across the Pacific Ocean, likely near ports in Northeast Asia. But most of
China’s current attack submarines are low-endurance diesel-electric
boats that would struggle to operate at such distances, while its few
longer-endurance nuclear-powered submarines are noisy and thus vul-
nerable to detection by U.S. outward-facing hydrophones that could be
deployed along the so-called second island chain, which stretches south-
east from Japan through the Northern Mariana Islands and past Guam.
Similarly, China’s current crop of ballistic missile submarines do little
to strengthen China’s nuclear deterrent. The ballistic missiles they carry
can at best target Alaska and the northwest corner of the United States
when launched within the first island chain. And because the submarines
are vulnerable to detection, they would struggle to reach open ocean ar-
eas where they could threaten the rest of the United States.
Even a future Chinese fleet of much quieter advanced nuclear attack or
ballistic missile submarines capable of evading outward-facing hydro-
phones along the second island chain would still have to pass over U.S.
upward-facing hydrophones nestled at the exits to the first island chain.
These barriers would enable the United States to impose substantial losses
on Chinese advanced nuclear attack submarines going to and from North-
east Asian shipping lanes and greatly impede the missions of Chinese bal-
listic missile submarines, of which there would almost certainly be fewer.
But if it were to acquire Taiwan, China would be able to avoid U.S.
hydrophones along the first island chain, unlocking the military poten-
tial of quieter submarines. These vessels would have direct access to
the Philippine Sea and the protection of Chinese air and coastal de-
fenses, which would keep trailing U.S. ships and aircraft at bay. A fleet
of quiet nuclear attack submarines deployed from Taiwan would also
have the endurance for a campaign against Northeast Asian shipping
lanes. And a fleet of quiet ballistic missile submarines with access to
the open ocean would enable China to more credibly threaten the con-
tinental United States with a sea-launched nuclear attack.
Of course, it remains to be seen whether China can master more
advanced quieting techniques or solve a number of problems that have
plagued its nuclear-powered submarines. And the importance of the
anti-shipping and sea-based nuclear capabilities is open for debate, since
their relative impact will depend on what other capabilities China does
or doesn’t develop and on what strategic goals China pursues in the
future. Still, the behavior of past great powers is instructive. Nazi Ger-
many and the Soviet Union both invested heavily in attack submarines,
and the latter made a similar investment in ballistic missile submarines.
The democratic adversaries of those countries felt deeply threatened by
these undersea capabilities and mounted enormous efforts to neutralize
them. A Chinese seizure of Taiwan would thus offer Beijing the kind of
military option that previous great powers found very useful.
July/August 2022 103

Troubled Water
The first and second island chains
NO GOOD OPTIONS
A fuller understanding of Taiwan’s military value clearly bolsters the
argument in favor of keeping the island in friendly hands. Yet just
how decisive that argument should be depends, in part, on what over-
all strategy the United States pursues in Asia. And whatever ap-
proach Washington adopts, it will have to contend with challenges
and dilemmas stemming from the military advantages that Taiwan
has the potential to confer on whoever controls it.
If the United States maintains its current strategy of containing

China, retaining its network of alliances and forward military pres-
ence in Asia, defending Taiwan could be extremely costly. After all,
the island’s military value gives China a strong motive for seeking
unification, beyond the nationalist impulses most commonly cited.
Deterring Beijing would therefore probably require abandoning the
long-standing U.S. policy of strategic ambiguity about whether
Washington would come to the island’s defense in favor of a crystal-
clear commitment of military support.
But ending strategic ambiguity could provoke the very crisis the
policy is designed to prevent. It would almost certainly heighten
pressures for an arms race between the United States and China in
anticipation of a conflict, intensifying the already dangerous compe-
tition between the two powers. And even if a policy of strategic clar-
ity were successful in deterring a Chinese attempt to take Taiwan, it
would likely spur China to compensate for its military disadvantages
in some other way, further heightening tensions.
Alternatively, the United States might pursue a more flexible secu-
rity perimeter that eliminates its commitment to Taiwan while still
retaining its treaty alliances and some forward-deployed military
forces in Asia. Such an approach would reduce the chance of a conflict
over Taiwan, but it would carry other military costs, again owing to
the island’s military value. U.S. forces would need to conduct their
missions in an arena made much more dangerous by Chinese subma-
rines and hydrophones deployed off the east coast of Taiwan. As a
result, the United States might need to develop decoys to deceive
Chinese sensors, devise ways to operate outside their normal range, or
prepare to cut the cables that connect these sensors to onshore pro-
cessing centers in the event of war. Washington would almost cer-
tainly want to ramp up its efforts to disrupt Chinese satellites.
Should the United States take this approach, reassuring U.S. allies
would become a much more arduous task. Precisely because control
of Taiwan would grant Beijing significant military advantages, Japan,
the Philippines, and South Korea would likely demand strong dem-
onstrations of a continuing U.S. commitment. Japan, in particular,
would be inclined to worry that a diminished U.S. ability to operate
on the surface of the Philippine Sea would translate into enhanced
Chinese coercion or attack capability, especially given the proximity
of Japan’s southernmost islands to Taiwan.

Over the longer term, U.S. allies in the region would also likely fear
the growing Chinese threat to shipping routes and worry that a stron-
ger sea-based Chinese nuclear deterrent would reduce the credibility of
U.S. commitments to defend them from attack. Anticipation of these
dangers would almost certainly drive U.S. allies to seek greater reassur-
ance from the United States in the form of tighter defense pacts, addi-
tional military aid, and more visible U.S. force deployments in the
region, including of nuclear forces on or near allies’ territory and per-
haps collaborating with their governments on nuclear planning. East
Asia could come to look much like Europe did in the later stages of the
Cold War, with U.S. allies demanding demonstrations of their U.S.
patron’s commitment in the face of doubts about the military balance of
power. If the Cold War is any guide, such steps could themselves
heighten the risks of nuclear escalation in a crisis or a war.
Finally, the United States might pursue a strategy that ends its
commitment to Taiwan and also reduces its military presence in Asia
and other alliance commitments in the region. Such a policy might
limit direct U.S. military support to the defense of Japan or even wind
down all U.S. commitments in East Asia. But even in this case, Tai-
wan’s potential military value to China would still have the potential
to create dangerous regional dynamics. Worried that some of its is-
lands might be next, Japan might fight to defend Taiwan, even if the
United States did not. The result might be a major-power war in Asia
that could draw in the United States, willingly or not. Such a war
would be devastating. Yet upsetting the current delicate equilibrium
by ceding this militarily valuable island could make such a war more
likely, reinforcing a core argument in favor of current U.S. grand strat-
egy: that U.S. alliance commitments and forward military presence
exert a deterring and constraining effect on conflict in the region.
Ultimately, however, Taiwan’s unique military value poses problems for
all three U.S. grand strategies. Whether the United States solidifies its
commitment to Taiwan and its allies in Asia or walks them back, in full or
in part, the island’s potential to alter the region’s military balance will force
Washington to confront difficult tradeoffs, ceding military maneuverabil-
ity in the region or else risking an arms race or even an open conflict with
China. Such is the wicked nature of the problem posed by Taiwan, which
sits at the nexus of U.S.-Chinese relations, geopolitics, and the military
balance in Asia. Regardless of what grand strategy Washington pursues,
the island’s military value will present some hazard or exact some price.∂
The Hollow Order

Rebuilding an International System
That Works
Philip Zelikow
T
here they were, meeting in Beijing on February 4: Chinese
President Xi Jinping and Russian President Vladimir Putin.
Shortly before the start of the 2022 Winter Olympics, the
two leaders released a remarkable 5,300-word joint statement about
how the partnership between China and Russia would have “no lim-
its.” The document went on at length about the two nations’ commit-
ment to democracy. It called for a universalist and open world order,
with the United Nations at the center. It stressed a commitment to
international law, inclusiveness, and common values. It did all this
even though Russia, as Xi and Putin both knew, was sending tanks
and missile launchers to the Ukrainian border.
By comparison, the September 1940 joint statement issued by
Germany, Italy, and Japan was a model of candor. The Axis powers
were at least truthful when they announced that it was “their prime
purpose to establish and maintain a new order of things.” Russia,
meanwhile, has described its war against Ukraine as one of libera-
tion. It decided that the country’s Jewish president was a Nazi. It
declared that there was really no such thing as “Ukraine.” And it ar-
gued that a NATO alliance with a U.S. force commitment in Europe
that was only one-seventh as large as it had been at the height of the
Cold War was now an existential threat.
In their statement, China and Russia achieved peak hypocrisy. But
the existing world order, which aspired to build a global common-
wealth, had already been failing. The free world’s leaders had long ago
started favoring performative commitments over the real action needed
PHILIP ZELIKOW is Professor of History at the University of Virginia. A former U.S.
diplomat and Executive Director of the 9/11 Commission, he has worked for five presiden-
tial administrations.

Philip Zelikow
to safeguard the planet from crises. They expanded NATO without

meaningfully responding to increasing Russian aggression. Distracted
and chastened by misadventures in the Muslim world, Washington in
particular disengaged from practical deeds, even as its rhetorical com-
mitment to the international order varied. The United States’ high
defense spending had more to do with satisfying domestic constituen-
cies than with supporting any positive strategy. The world’s transition
from fossil fuels to renewable energy sources was based on hollow
pledges and private action. As support for globalization waned, the
United States and other countries retreated from trade agreements
and neglected international institutions for civilian and common eco-
nomic action. The world’s drive in the early years of this century to
improve global health and human development petered out.
The emptiness of the supposed international system was espe-
cially obvious at the end of 2019, when the COVID-19 pandemic broke
out. Charged with unprecedented global responsibilities, China and
the United States stepped down, not up. Beijing withheld crucial
information about the outbreak.
Washington withdrew from the
The most powerful idealism World Health Organization just
has usually been the when it most needed U.S. leader-
idealism of what works. ship. Wealthy countries began a mad
scramble to develop vaccines, but
they moved too slowly to create other
treatments and hoarded whatever shots and therapeutics pharmaceu-
tical companies could produce, leaving the rest of the world behind.
The best estimates suggest that the virus caused about 15 to 20 mil-
lion deaths and trillions of dollars of economic damage.
By the spring of 2020, “for all practical purposes the G7 ceased to
exist,” wrote the foreign policy experts Colin Kahl and Thomas Wright
in August 2021. “Pandemic politics,” they continued, “ultimately dealt
the final blow to the old international order.”
Six months after they published those words, Russia invaded
Ukraine. It was an attack that could truly have buried the old system,
as Moscow believed it would. Yet Ukraine’s inspiring fight has helped
the G-7 roar back to life. Its members have organized an economic
counteroffensive, and they have joined a coalition providing military
aid. Amid the wreckage of so many past hopes, it is possible to imag-
ine a reconstructed world order emerging from this crisis.
The Hollow Order
The illiberal tide: Putin and Xi in Brasília, Brazil, November 2019
But for a new system to succeed, its would-be architects must organ-
ize actions, not more theatrics. Over the course of world history, the
most powerful idealism has usually been the idealism of what works.
Today, that means crafting a practical international order focused on
a few basic problems that rally broad interest. Many leaders want to
stop unprovoked wars of aggression, especially those that might spark
a third world war. They would welcome a new vision of economic
order that does not ignore security but is also not a huckster’s promise
that everything can be made at home. They would like to convert jolt-
ing energy shocks, such as the one caused by Russia’s invasion, into a
managed transition to a more carbon-free future. They want to be bet-
ter prepared for the next pandemic. And most world leaders, and even
many ordinary Americans, still hope that China will choose to be part of
these solutions, not one of the wreckers of a new international system.
These aspirations may seem modest. They do not include holding
P AV E L G O L O V K I N / P O O L N E W / R E U T E R S
war crimes trials or spreading democracy. But effective common ac-

tion on just these items will be an enormous task. The world order is
deglobalizing and dysfunctional, facing challenges that have never
been more planetary in scope. Leaders must craft a system focused on
actually addressing these issues rather than on striking the right pose.
ACTING AND ACTIONS

The idea of a cooperative world order is, historically speaking, relatively
new. The European empires created a globe-spanning system meant to be

Philip Zelikow
stable and organized, but just to the point that it served their interests. It
was not until the Paris Peace Conference of 1919 that nations began pur-
posefully organizing an ambitious order. That era’s peacemakers strained
until 1925 to reconstruct a bitterly broken world amid the chaotic collapses
of five dynastic empires. But by the end of 1933, these fragile efforts had
been swept away by postwar resentments, fantasies of ethnic destiny and
self-sufficiency, U.S. disengagement, and the despair of the Great De-
pression. The result was a second, even more destructive global conflict.
After World War II, the Cold War system that emerged dealt with
a divided world. It generated real actions and functional institutions
but mainly within two principal confederations: one led by the United
States, and the other by the Soviet Union. These confederations
organized themselves for global war and competed for advantage in the
uncommitted, unaligned world, much of it newly freed by the collapse
of European colonialism. But the economic systems of both confed-
erations began unraveling during the 1970s, and the Cold War system
itself disintegrated between 1988 and 1990.
International policymakers then set out to create a truly global
commonwealth, working from 1990 to 1994 to build new institutions
and to improve old ones. Those architects believed that Washington’s
role in the system would be central but not domineering. U.S. power,
they understood, worked only when it combined the country’s
strengths—political, financial, and military—in partnerships with
other states. They were mindful of Russian pride; indeed, those pol-
icymakers ensured that all the former Soviet Union’s nuclear weap-
ons went to Russia and that Moscow would be a party to and
influential in all the pan-European arms control agreements and se-
curity systems. Amid the awful economic turmoil that accompanied
the end of communism, the United States, Europe, the International
Monetary Fund (IMF), and the World Bank offered Russia alone
more than $50 billion in financial assistance between 1992 and 1994.
These financial settlements of the early 1990s did much to build a
better world, and they lasted for a generation. But from the start,
they also bred complacency. Beginning during that decade, NATO al-
lies mostly disarmed and looked to the United States for military
defense that no longer seemed that necessary. The United States, for
its part, was withdrawing most of its forces from Europe and only
reluctantly led a peacemaking mission in the Balkans. That modest
success was followed by years of indifference, drift, and growing hu-
The Hollow Order
bris, interrupted by the riveting, distracting shock of September 11.

By 2006, as U.S. military efforts floundered in Iraq, sentiment had
turned against the United States, and Americans were more anxious
about foreigners and disillusioned about their own capacity to do
good in the world. The world order and its operating institutions
were left more and more on autopilot. Soon, performative gestures
took the place of well-designed action.
Consider, for instance, the problem of European security. When
the debate over NATO enlargement first heated up in the mid-1990s,
the main arguments were performative on both sides. Poland wanted
a symbolic connection to Western defense. Russia complained not
about new foreign bases or nuclear deployments, which were limited
by the NATO-Russia Founding Act of 1997, but about symbolic issues
such as wounded pride and lost status in a country where everyone
had grown up with “NATO” as a synonym for “enemy.”
What was concrete was the shift of former Soviet states toward
Europe and away from Putin’s Russia. In 2005, an anti-Russian leader,
Viktor Yushchenko, who had survived a mysterious poisoning the pre-
vious year, became president of Ukraine, defeating the more pro-
Russian candidate, Viktor Yanukovych. The U.S. reaction was
triumphalist. Putin began proclaiming a messianic creed of Russian
fascism. In 2007, he suspended Russian compliance with the most
important parts of the pan-European arms control and security sys-
tem. He invaded Georgia not long after.
This was the time for NATO allies to start taking European security
seriously again, not to stage more plays. Although the allies did not
take practical steps to build more credible defenses, President
George W. Bush pushed in 2008 for Ukraine to receive NATO mem-
bership, a call that predictably backfired. Allies such as Germany and
France blocked any plan to advance Ukraine’s membership. Bush’s
move thus fostered divisions among NATO members while failing to
deliver any assurance to Ukraine, where the future remained very
much in question. The Russia-friendly candidate, Yanukovych, then
won Ukraine’s presidency in 2010. Four years later, he was toppled in
a “revolution of dignity” after he withdrew from a process that would
have brought his country closer to the European Union. That, in turn,
led directly to the first Russian invasion of Ukraine.
The 2014 crisis had little to do with NATO. The triggering event was
Ukraine’s attempt to associate with the EU and put Ukraine on an ir-

Philip Zelikow
revocable path away from Russia. But Putin uses “NATO” the way Hit-
ler used “Versailles”: as a secondary grievance for propaganda theatrics.
Talk about NATO helps Putin and his minions obscure their real con-
cern, which is that Ukraine may achieve democratic independence
rather than be subjected to their dictatorial empire.
TALK IS CHEAP
In the 30 years since the 1992 Earth Summit in Rio de Janeiro, the
problem of how countries can source, supply, and pay for energy has
become a defining planetary challenge. The main international re-
sponse has been a wide commitment to decarbonization, expressed in
international pledges. But these pledges are a façade. As the Interna-
tional Energy Agency recently pointed out, most of them are not un-
derpinned by substantive policies, and if they were, they would still not
be nearly enough to stop climate change. (Even Europe, the loudest
voice for a green transition, has spent the last decade becoming more
dependent on fossil fuels, particularly from Russia.) The world’s re-
sponse to climate change, then, has been the geopolitical equivalent of
a masque: a form of sixteenth-century aristocratic court entertainment,
a dramatic performance featuring poetry and dumb allegorical shows,
usually culminating in a ceremonial dance joined by the spectators.
Even the energy transition will not, by itself, stabilize the planet. It
will shift dependence from fossil fuels to an even more pronounced
reliance on certain metals used in green technology. In the relevant
geology, mining, and mineral processing, China and Russia are in par-
amount positions. In the absence of any concerted action, the world is
therefore trending toward addiction, and financial flows, to those new
sources—China above all—in its carbon-free dreams. The architects
of this system have done little to prevent such addiction.
It might seem that international economic management is a bright
spot, an arena where there has been real action, not just a masque. To
some extent, that’s true. In the wake of the 2008 global financial crisis,
the main central banks jumped into action. Unlike in 1931, a financial
panic that had earlier started in the United States and then spread to
Europe did not lead to a world-crushing depression; instead, finance
ministries and central banks coordinated to bail each other out. The
G-20 was a genuinely useful forum to consider vital economic issues.
In the last ten years, however, the institutions for managing global
capitalism have also become more stage than substance. The United
The Hollow Order
States is unable to join new trade agreements because of domestic op-

position. Countries across the planet have piled up debt, and the cur-
rent international economic system cannot coordinate how to wind it
down or provide necessary relief. The operation of the World Trade
Organization is coming to a halt, both because it is unable to modern-
ize its rules and because the United States has deliberately paralyzed
the WTO’s dispute settlement system by refusing to confirm arbiters.
But nowhere has the hollowness of the current world order been
more starkly revealed than in global health. After the SARS epidemic of
2003, amid concerns about China’s role in informing the rest of the
planet about the outbreak, the nations of the world ceremoniously en-
acted a set of “international health regulations,” which defined the
rights and duties of states to prevent and contain international public
health dangers. The outbreak of COVID-19 revealed that the elaborate
provisions for global surveillance and early warnings were a sham. The
pandemic also showed that the planet’s main public health agency—
the World Health Organization—was weak, and it demonstrated that
the world’s major powers were far too self-interested to mount a truly
global response. The most substantial investigation so far of the world’s
reaction to COVID-19, by an independent panel with access to the WHO’s
staff and documents, found it was “a preventable disaster.” As they
wrote, “Global political leadership was absent.”
It’s a conclusion that is difficult to escape. China’s government has
blocked proper investigations into the outbreak’s cause and continues
to stonewall the WHO. In his own gesture of theatrical pretense, then
U.S. President Donald Trump moved to pull his country out of the
WHO during the spring of 2020, turning the crisis into a blame game
focused on China, with the organization as an accomplice. Yet the
Trump administration had no alternative agenda for meaningful
global action. Its acclaimed vaccine development program encouraged
an “every country for itself” approach to acquisition and bypassed the
challenge of developing effective therapeutics.
The Biden administration has tried to correct Trump’s mistakes. In
2021, with due fanfare, the United States rejoined the WHO. It then
focused on a rhetorically appealing G-20 health security agenda that
called for spending more money on global readiness. But this agenda
has turned out to be impractical in detail and ineffective in its results.
At the October 2021 G-20 summit in Rome, the United States strug-
gled to get the other countries to agree to even study its proposal.

Philip Zelikow
ON THE CLOCK
The need for a new world order is apparent, and policymakers are al-
ready at work trying to address the evident failures of the existing
system. In doing so, they have again invoked values and philosophies.
Biden, for instance, has described the war in Ukraine and tensions with
China as part of “an ongoing battle in the world between democracy
and autocracy.” French President Emmanuel Macron declared that
Russia’s invasion had called democracy “into question before our eyes.”
Yet the best, most unifying organizing principle for what will be
the fourth system of world order is practical problem solving. It’s con-
venient to perceive the world as apportioned into democracies and
autocracies, but it is also self-regarding and divisive. People are more
likely to come together around problems that command wide interest
and embrace corrective actions that require wide participation. After
years of theatrics that have resulted in catastrophes and growing fear,
the system can no longer afford to place inclusiveness and symbolism
ahead of teamwork and results.
To erect a new system, policymakers should start by addressing the
most pressing current crisis: Ukraine. The military issues are already
receiving intense attention. Yet economic issues may determine the
outcome of the war as Russia tries to break not just Ukraine’s armed
forces but its hope for a better future. The G-7 and allied countries
must prepare a far-reaching strategy of Ukrainian reconstruction, tied
to the ongoing process of EU accession for Ukraine and funded in part
by frozen Russian state and state-related assets. Such an action, with
expert assistance from EU staff and hundreds of billions of dollars in
reconstruction aid, would be a peaceful counteroffensive on an epic
scale. Ultimately, it would help Ukrainians believe and see that they
can have a better future.
But to address the challenges Russia has created, the free world can’t
focus only on Ukraine. Unless a fundamental change occurs in Mos-
cow, the United States and Europe will also have to redefine their de-
fense for the 2020s, from the Arctic to the Mediterranean (a process
already underway), to deter further aggression. And sadly, when a leader
such as Putin makes ominous threats about escalation, the United States
and its friends must develop credible plans for a wider war with Russia.
For this new system to succeed at keeping the peace, the responsi-
ble countries will also need to engage in military planning beyond
Europe. For example, the war in Ukraine affects diplomatic calculations
The Hollow Order
on all sides of the dispute over Taiwan’s sovereignty. Because of the

international response to aid Ukraine, Beijing can see that Japan, the
United States, and other countries now feel much greater pressure to
defend Taiwan. It is now harder for China to sustain the fiction that it
can peacefully reunify the island with the mainland. The free world’s
ability to defend Taiwan has long involved considerable pretense, but
the war in Ukraine has also revealed that well-prepared global eco-
nomic action may be a more powerful and less provocative way to
deter conflict than reliance on more traditional military tools. China
should see that Japan and others around the world are preparing for
the possible financial and commercial earthquake that would immedi-
ately accompany a war with the United States and Japan over Taiwan.
The invasion of Ukraine has also highlighted the need for more
decisive, concerted action on the world’s transition to clean energy.
More than any other event since the Iranian revolution of 1979, the
war spotlights the danger of relying too much on particular supplies
of fossil fuels. Europe should end its
dependence on Russian oil, gas, and
coal as quickly as it can. At the global The resources and
level, policymakers will need to boost wisdom needed to solve
fossil fuel supplies from more de-
pendable sources in the short term,
many global problems are
but they should treat these sources as not concentrated in the
“transition assets” (to quote the energy United States.
experts Jason Bordoff and Meghan
O’Sullivan) that will be quickly wound
down as governments embrace the transition. The switch to
greener sources will need to include a renewed commitment to
advanced forms of nuclear energy.
The energy transition will require much more concerted work to
find, extract, and process diverse and secure supplies of the minerals
needed for renewable sources. Both the United States and Europe
know that they cannot let vital supply chains such as these operate
according to market forces alone, since these markets have been dis-
torted by vast Chinese state projects that operate with limited regard
for the environment and for workers. Countries that regard each other
as secure sources—and that accept the cost burdens of sustainable
production—must form their own supply network with its own com-
mercial system and pricing. Such a plan requires strong international

Philip Zelikow
participation. No country alone can source and process the metals

needed for the transition to carbon-free energy.
Such trading among partners, or “friend shoring,” as U.S. Treasury
Secretary Janet Yellen put it, is far preferable to the “Buy American”
public procurement requirements that Washington has put in place to
placate protectionists. Indeed, the United States is not self-sufficient
with regard to almost any major global commodity. In this time of
crisis, Americans may be tempted by the idea of a “Fortress America”—
in which they bring all production onshore—but that is an illusion.
The United States needs and benefits from production chains that
run through other countries, whether for mineral resources or medical
supplies. It needs to rebuild export markets shriveling from past trade
war rhetoric and present interest-rate policies that boost an overval-
ued dollar. The best way to cope with deglobalization is to reglobalize
among friends. As major firms operating around the world rethink
their business models, the free world should create structures to help
these companies see new opportunities.
For example, Germany’s new finance minister, Christian Lindner,
has urged Europe to focus on renewing economic ties with the United
States. “Especially now with the [Ukraine] crisis, it is becoming clear
how important free trade is with partners in the world who share our
values,” he told the German press, while calling on the United States
and the European Union to restart negotiations on a trade deal. Such
an agreement may be a hard sell in the United States, where politicians
still peddle the myth of self-sufficiency. But plenty of middle-class
Americans across the country know that the nations of the world are
interdependent and that leaders must adjust their policies accordingly.
This includes in finance, where the G-7 and its partners will need
to collaborate. They must manage the international financial coali-
tion combating Russian aggression in Ukraine, and they must coor-
dinate their policies to limit foreign exchange volatility as Washington
raises interest rates. Critically, they need to consider how their ac-
tions affect developing states. “The West is grappling with stagfla-
tion,” wrote the economic journalist Sebastian Mallaby in The
Washington Post. “But poorer countries face the far more acute pros-
pect of food riots, debt crises, and even regime collapse.”
That doesn’t mean the G-7 needs to tear down the world’s eco-
nomic architecture. In response to debt crises and the collapse of com-
munism in the 1980s and early 1990s, the IMF and the World Bank
The Hollow Order
transformed themselves. The IMF became a lead crisis manager and

established creditworthiness for stressed borrowing countries so they
could tap private lenders. The bank rethought its approach to global
development. Beyond its lending operations, it has become the most
important focal point for ideas and advice to policymakers in develop-
ing countries. These existing institutions can again help organize
common action and evolve once more. In spring of 2022, Robert Zoel-
lick, former U.S. Deputy Secretary of State, suggested in these pages
that the IMF start by convening meetings of the principal actors in the
global financial system to address new shocks.
Leaders around the world are also still worried about biological
security, another pandemic, or a resurgence of COVID-19. That
means the United States and Europe will need to improve their
coordination. Both went into this global crisis with superior assets.
They had more of the best scientists, the best labs, and the best
pharmaceutical producers than anywhere else on earth. They
should have launched a global war effort; organized biomedical in-
telligence efforts; sized up the global requirements for vaccines,
tests, and medications; and together arranged for acquisition and
deployment of these health-care resources on a global scale. In-
stead, they mostly looked out for themselves.
It is not too late for them to improve their response to the pan-
demic. The U.S. government could still work with key partners, such
as the EU’s new European Health Emergency Preparedness and Re-
sponse Authority, to set global targets for developing and distributing
the vaccines, therapeutics, and diagnostics that different regions need.
Then, together, the world’s governments can replace the current vac-
cination and treatment free-for-all with a system in which countries
coordinate their national investments and procurements.
IN IT TOGETHER
It may be easy, and perhaps natural, for the would-be architects of the
new system to organize it around Washington. But that would be a
mistake. The enemies of this new order, united by their resentment of
the United States, will seek to discredit it as just another effort to
dominate global affairs. For this new order to be viable, it must be
conceived in such a way that the charge is false.
The new order must also be decentralized to be effective; the re-
sources and wisdom needed to solve many vexing problems are not

Philip Zelikow
concentrated in the United States. For instance, on the enormous

issue of defining rules for a digitized world, Washington has been
confused and passive, despite—or perhaps because of—its domi-
nance in such commerce. It is the European Union that has led the
way. The EU’s General Data Protection Regulation, its Digital Ser-
vices Act, and its Digital Markets Act created the standards that in-
fluence most of the world, including the Americas. Decentralized
leadership has also proved critical to responding to Russia’s aggres-
sion in Ukraine. The nucleus of the emerging pro-Ukraine coalition,
for instance, is not just the United States but the entire G-7, includ-
ing the European Commission. South Korea and Australia should be
invited to join this coalition as well.
Yet a revised system of world order shouldn’t be limited to the
United States and its traditional allies. It must be open to any coun-
tries that can and will help attain its common objectives. India should
have a place at any symbolic high table, for example, as a permanent
member of the UN Security Council. But India’s leaders are still
making their choices about their will and capacity to work on
common problems. Even China should be welcome at the table. After
much internal debate in the early 1990s, China’s leaders chose to play
a major and often constructive role in the global commonwealth sys-
tem that emerged after the end of the Cold War. In 2005, Zoellick
famously urged Beijing to become a “responsible stakeholder.” As late
as 2017, Kurt Campbell, who now leads Asia policy for the Biden
White House, thought this invitation was a wise move.
But Zoellick’s words were a challenge, one that Beijing is failing to
meet. China’s partnership with Putin—whom Xi described to the Rus-
sian press as “my best and bosom friend”—is the opposite of respon-
sible. Instead, it shows that China and Russia lead a primarily Eurasian
grouping of dangerous states, including the likes of Iran, North Korea,
and Pakistan. Their loose confederation has its cross-purposes and is
united mainly by hostility toward the United States. But it is building
tighter links, better divisions of labor, and more effective coordination
than existed among the Axis powers before or during World War II.
For these and other reasons, pessimists believe China is irredeem-
ably hostile. They argue that China has written off the United States
as a country determined to resist China’s rise and that Chinese leaders
may feel they have little to lose by embracing confrontation. In this
pessimistic view, China is trying to shift from the post–Cold War
The Hollow Order
era’s emphasis on global interdependence toward a Chinese grand

strategy of Eurasian dominance and growing national self-sufficiency.
China’s leaders are now using the pandemic to keep a chokehold on
international travel and strengthen domestic surveillance.
That does seem to be China’s current plan. But it is unclear
whether this plan will work. It rests on unproven social, political,
and economic premises that are starting to deeply disturb parts of
Chinese society essential to its past and future success—such as
the many residents of Shanghai who have been trapped during the
city’s draconian recent lockdown.
Chinese leaders may also have noticed that, in backing the Putin re-
gime, they have tethered themselves to an adventurist Russian govern-
ment that, for 30 years, has treated its neighbors much as Japan treated
China between 1915 and 1945. For instance, Putin insists that Russia is
not invading Ukraine. There is no war, he declared; there is only a “spe-
cial military operation.” Many Chinese people will recall that, from
1937 to 1941, Japan insisted that it, too, was not invading China. There
was no war, the Japanese said; there was merely a “China incident.”
Throughout the years of Japanese aggression, the United States
defended China’s territorial integrity. Even amid times of misjudg-
ment and weakness, Washington maintained that stance, refusing in
November 1941 to make a deal with Japan at China’s expense. Ten
days later, Japan went to war against the United States. As they watch
what is happening in 2022, Chinese leaders can still reflect on this
past and consider what decisions to make.
If Beijing charts a new course, it would not be the first time it has
chosen to change. But if China does rejoin a system of world order,
it should be a new one. The old system has fractured and must be
remade. Facing tragic realities, the citizens of the free world must
rebuild a global order that is practical enough to address the most
vital common problems, even if it cannot and does not promise prog-
ress on all the values and concerns people face. This system will be
far more effective if the world’s most populous country joins it, and
China faces another time of choosing. Regardless of China’s partici-
pation, responsible actors must begin the hard, substantive work of
protecting the planet from war, climate, economic, and health risks.
The time for rhetoric and posturing is over.∂

Last Best Hope

The West’s Final Chance to Build a
Better World Order
R
ussia’s invasion of Ukraine confirmed what has long been ap-
parent: the rules-based order created after World War II is at
risk of collapse. Russia is not content to be a responsible stake-
holder in a system set up by others, and neither is China, which has
supported Moscow’s aggression. Both countries want to remake the
order to serve their autocratic interests. As U.S. President Joe Biden
said in Warsaw in March, the West now faces “a battle between de-
mocracy and autocracy, between liberty and repression, between a
rules-based order and one governed by brute force.”
History was not supposed to play out this way. In the heady days
after the Cold War, the order appeared both unchallenged and un-
challengeable. Washington believed that its unquestioned primacy
allowed it to determine the future of other countries as well as its
own. U.S. allies believed they had escaped the tragedy of great-
power politics and had entered an era of self-enforcing rules. As
time went on, however, habits of collaboration eroded, and the
sense of common purpose faded. Rather than using the unique mo-
ment of U.S. dominance to deepen and strengthen the rules-based
order, the West let that system wither.
Washington and its allies now have a chance to correct that mis-
take. Russian President Vladimir Putin’s historic miscalculation to
attack Ukraine has reminded them not just of their shared interests
IVO H. DAALDER is President of the Chicago Council on Global Affairs and served as U.S.
Ambassador to NATO from 2009 to 2013.
JAMES M. LINDSAY is Senior Vice President and Director of Studies at the Council on
Foreign Relations.
They are the authors of The Empty Throne: America’s Abdication of Global Leadership.
Last Best Hope
and values but also of the importance of acting collectively. The

West responded to the invasion with a show of unity not seen since
the height of the Cold War. The United States and its allies have
levied unprecedented sanctions, begun weaning themselves off
Russian energy, and shipped massive quantities of weapons to
Ukraine. But this surprising unity may not last. As the economic
pain of sanctions increases and the war settles into the prolonged
battle of attrition that intelligence officials forecast, domestic and
other concerns may start to sow divisions within the West.
Even as the West works to manage these differences, it should
turn its newfound unity into a broader effort to save the rules-based
order. The first step should be to create a new group, the G-12, that
would bring together the United States and its leading allies in
Asia, Europe, and North America. Every member of this group has
a vital interest in preserving the order, and none of them can do it
on their own. But formalized cooperation alone will not be enough.
The United States and its allies will need to take the second step of
learning from the mistakes they had made over the last three decades.
Washington will need to curtail its penchant for unilateralism, to
listen as well as talk, and to give as well as demand. Asian and Eu-
ropean allies, for their part, will need to accept more responsibility
and overcome their tendency to free-ride.
If the West sticks to its old ways, it will bungle something that is
exceedingly rare in international politics: a second chance. Only by
seizing the moment, learning from its errors, and acting collectively
can the West rebuild an international order that promotes the rule of
law rather than the law of the jungle.
WHAT A WASTE
Although it emerged triumphant from the Cold War, the United
States quickly squandered the extraordinary opportunity to turn its
unipolar moment into something more permanent. It had outlasted
the Soviet Union, unified Europe, and propelled a historic expansion
of the global economy. This victory, which was both strategic and
ideological, paved the way for the West to broaden and deepen the
rules-based order of collective security, open markets, and respect for
democracy, human rights, and the rule of law. In the early 1990s,
democracy was spreading, and free markets were emerging. Even old
enemies, such as Russia, and possible future rivals, including China,
2022 121
July/August 2022
appeared to have no choice but to embrace the free flow of capital,

goods, ideas, and people—or be left behind. Cooperation and con-
ciliation seemed set to replace competition and conflict as the defin-
ing features of world politics.
But events didn’t go as planned. The United States overplayed its
hand, believing that its role as the world’s “indispensable power” al-
lowed it to hurry history along. A series of military interventions
launched in the name of stability and democracy often produced more
chaos and misery than security and riches. It hardly helped that even
as it trumpeted a rules-based order, Washington regularly ignored
rules it disliked—as when it intervened in Kosovo in 1999 and Iraq in
2003 after failing to secure a UN mandate, and when it tortured de-
tainees during its war on terrorism. The United States refused to join
new cooperative arrangements on nuclear testing, arms control, pros-
ecuting war crimes, and regularizing trade in the Asia-Pacific, fearing
that such commitments would limit its freedom of maneuver. Wash-
ington felt justified because it had convinced itself that its own mo-
tives were pure. “We stand tall and we see further than other countries
into the future,” U.S. Secretary of State Madeleine Albright pro-
claimed in 1998. But friends and foes alike did not see strength and
integrity; they saw hubris and hypocrisy.
Washington was hardly alone in its failure to make the most of
the moment created by the Soviet Union’s collapse. Its allies in
Europe suffered from delusions of their own, believing that the end
of the continent’s Cold War divisions meant the end of conflict.
They saw themselves as postmodern states that could rely on coop-
eration and multilateral institutions to maintain peace. Although
they recognized that terrorism and nuclear proliferation remained
threats, they were content to let Washington address such prob-
lems. They also assumed that economic engagement, arms control,
and dialogue would transform Russia into a partner and that Chi-
na’s need for access to their markets and technology would turn it
into a stakeholder in the rules-based order. With great-power com-
petition seemingly relegated to the dustbin of history, economic
interests could now drive foreign policy.
American hubris and European wishful thinking ruled the day,
and leaders in Western capitals ignored signs that great-power
competition was far from dead. Russia invaded Georgia in 2008,
and then six years later, it annexed Crimea and fomented a sepa-
Last Best Hope
ratist rebellion in Ukraine. These acts elicited mostly symbolic

responses from the West. Rather than reducing its dependence on
Russian oil and gas, much of Europe increased its reliance because,
as the German chemical executive Martin Brudermüller put it,
“cheap Russian energy has been the basis of our industry’s com-
petitiveness.” China, for its part, conducted unprecedented acts of
economic espionage, coerced its trading partners, laid claim to the
South China Sea, imprisoned more than one million Uyghurs, and
crushed democracy in Hong Kong—a string of outrages that
earned Beijing little more than mild rebukes. Wall Street relied
ever more on Chinese riches, and in 2020, the EU signed a new
trade and investment deal with Beijing.
These developments gradually eroded the core features of the
rules-based order. The ability of great powers to use force with impu-
nity against smaller neighbors exposed the weaknesses of the UN Se-
curity Council and other collective security institutions. The
proliferation of mercantilist trade practices highlighted the gaps in
global trading rules. The economic disruptions caused by unfettered
globalization fueled populist nationalism and claims by autocrats that
liberal democracy was decadent and obsolete. When the COVID-19
pandemic hit, countries responded not by acting collectively against a
common threat but by pursuing “every country for itself” policies.
The world order, in short, was unraveling.
The invasion of Ukraine roused the West from its slumber. The
speed, scale, and scope of the U.S.-led response surprised Western
leaders almost as much as they surprised Putin. Economic sanctions
are pummeling the Russian economy. Europe is rapidly cutting im-
ports of Russian energy, sharply reducing Moscow’s leverage. NATO is
bolstering its presence from the Baltics to the Black Sea and is prepar-
ing to welcome Finland and Sweden as new members. And Ukraine,
aided by new weapons shipments and Western intelligence, has suc-
cessfully resisted a much larger Russian military.
Much of the West’s diplomatic energies will rightly go into sus-
taining its support for Ukraine. Equally important, however, is for
Western leaders to think more ambitiously about restoring the
crumbling rules-based order. By reminding Western democracies of
their common interests and their strength when they work together,
Putin’s strategic blunder has created an opportunity to heal three
decades’ worth of self-inflicted wounds.
2022 123
July/August 2022
BETTER TOGETHER
The first step will be to institutionalize the cooperation that has
emerged in the wake of Russia’s invasion of Ukraine. The best way
to do this is for the United States and its advanced democratic al-
lies in Asia, Europe, and North America to create a G-12 consisting
of the current G-7 members (Canada, France, Germany, Italy, Ja-
pan, the United Kingdom, and the United States) plus Australia,
New Zealand, South Korea, and the EU. NATO would have a seat at
the table for all security-related discussions.
Establishing a G-12 is the last best hope to reinvigorate the rules-
based order. The prospective G-12 member states and institutions
have the capacity, the interest, and the ability to work collectively to
do so. They are home to nearly one billion people and account for
more than 60 percent of global GDP and military spending. China and
Russia together are more populous but constitute barely 20 percent of
the world’s economic output and just 17 percent of its military spend-
ing. As their reaction to Russia’s invasion of Ukraine has shown, the
potential members of the G-12 all recognize that their security and
prosperity rest on finding ways to avoid returning to a world in which
brute force replaces the rule of law. And they were able to react so
quickly against Russia because they had a long history of working
cooperatively on a wide variety of issues, whether in their bilateral
relations or in multilateral forums.
What these countries have not done is work together intention-
ally as a group or for the specific purpose of strengthening the
global order. The formation of a G-12 would remedy that failing. In
contrast to a loose association such as the G-7, which has tradition-
ally approached global issues in an ad hoc fashion, the G-12 states
and institutions would commit to identifying global challenges, as-
sessing available responses, and responding in a coordinated fash-
ion. The arrangement would not require a formal treaty, structure,
or secretariat. Instead, it would rest on a joint commitment among
G-12 members to base their engagement abroad on the principle
that cooperation and coordination among themselves is vital to
achieving their objectives and maintaining the rules-based order.
The G-12 heads of state should meet at least biannually, and their
foreign, defense, economic, and other ministers should meet more
frequently—much as the Council of the European Union conducts
its business across a full range of issues.
Last Best Hope
Policy coordination would need to start in the foreign policy sphere.

G-12 members would need to come together on foiling Russian re-
vanchism, competing with China, halting nuclear arms proliferation,
countering terrorism, fighting pandemics, and curbing climate change.
The post-invasion coordination at the UN and within the G-7 and
NATO needs to become the norm for the G-12 on all major issues. To
facilitate common action, the G-12 countries should caucus with the
UN, the World Trade Organization, the international financial institu-
tions, and other international organizations to develop common posi-
tions and agree to concerted actions on critical issues.
In the economic sphere, the G-12 would need to coordinate on
trade, investments, export controls, digital commerce, and other
critical economic issues. The COVID-19 pandemic and the war in
Ukraine have reinforced economic nationalism and protectionism,
disrupted trade, and upended supply chains, slowing growth and
spurring inflation. Growing security concerns about intellectual
property and critical technologies have further limited trade, espe-
cially with U.S. rivals such as China and Russia.
The G-12 should become an engine for economic cooperation and
growth, pushing against the temptation to turn inward. A crucial first
step would be for the United Kingdom, the United States, and the EU
to accede to the Comprehensive and Progressive Trans-Pacific Part-
nership trade agreement, which already includes Canada and other po-
tential G-12 nations in Asia. The United States and Europe should
also revive negotiations on a trade and investment pact, thus comple-
menting the EU’s existing bilateral pacts with Australia, Canada, and
Japan. G-12 members would also need to coordinate their policies on
export controls and foreign investment to ensure they maintain their
competitive edge over China. And they would need to consolidate sup-
ply chains for critical goods—such as semiconductors, robotics, artifi-
cial intelligence, and rare-earth metals—within the Western world.
In the security field, the United States would remain first among
equals within the G-12. It alone has a military with true global reach.
Even so, in the wake of Russia’s invasion of Ukraine, other members of
the prospective G-12 have finally made good on their promises to spend
more on defense. Japan is considering possibly doubling its military
expenditures over the next few years, and Germany’s decision after the
invasion to increase its defense budget makes it the third-largest mili-
tary spender in the world. These outlays will add as much as $150 bil-
2022 125
July/August 2022
lion to what the West now spends annually on defense, making Germany
and Japan far more effective security partners for the United States.
The principal channels for enhancing defense capabilities among G-12
members would remain the same—defense arrangements through nato
and bilateral agreements with the United States—with the addition of
greater coordination within the EU. But the G-12 would provide a use-
ful forum for driving these efforts and ensuring that transatlantic and
transpacific security policies were far more aligned than is currently the
case. Increased military capabilities and enhanced coordination would
greatly improve the chances of deterring and, if necessary, defeating any
further aggression by Russia, China, or other countries.
As important as formalized cooperation will be, the success of the
G-12 will depend on the United States and its allies abandoning the
bad habits they have developed since the end of the Cold War. Wash-
ington has too often acted unilaterally, believing that leading means
deciding what to do and commanding others to follow. Consultations
have often taken the form of informing others of decisions already
made rather than developing new positions together. This type of
behavior was on display in the Trump administration’s decisions to
walk away from the Paris agreement on climate change and the Iran
nuclear deal and the Biden administration’s decision to hastily with-
draw U.S. troops from Afghanistan. Conversely, U.S. allies have fre-
quently shirked responsibility for tough decisions, free-riding off of
U.S. security pledges while allowing their own hard power to atro-
phy. The G-12 would need to be a partnership of equals—in ways its
members have long professed to want—with Asian and European
members assuming more of the burden of acting and the United
States sharing more of the decision-making. To be sure, as is the case
in NATO and in the EU, forging agreement can take time, especially
when interests clash. But just as in these other institutions, the source
of the G-12’s strength will lie in its ability to act collectively—as Rus-
sia has now discovered at its own peril.
REALITY CHECK
The G-12 offers the best chance to mobilize the resources of the
world’s most powerful and advanced democracies to defend the
rules-based order. It is fair to ask, however, whether creating a G-12
would widen the divide between democracies and autocracies, in-
flame current tensions, and make it harder to forge the solutions
Last Best Hope
needed to address the broad array of global challenges that the

world, not just the West, faces. The G-12 will no doubt be seen as
a means of explicitly countering Chinese and Russian power. Bei-
jing and Moscow won’t respond by shrugging their shoulders. They
will redouble their efforts to undermine the rules-based order and
work hard to bring other countries into their orbit.
Concern about deepening divisions glosses over a critical point:
Western democracies are already locked in a struggle with authoritar-
ian governments over whose values will guide the world order. Neither
China nor Russia is looking to improve existing international arrange-
ments. Both are revisionist powers contesting the norms and institu-
tions of the postwar order. They wish to return to an era of great-power
politics in which they would be free to dominate their neighbors.
Western democracies have been reluctant to recognize the challenges
both countries pose, hoping that engagement would persuade Beijing
and Moscow to work with rather than against them. Russia’s invasion
of Ukraine, with China’s all-but-formal endorsement, has made clear
that the Chinese-Russian partnership is headed toward confrontation
over everything the West—and the rules-based order—stands for.
The formation of a G-12 would not prevent the West from ever
working with China or Russia. Efforts to curb climate change and
prevent pandemics would certainly benefit from more cooperation
among all the major powers. But Chinese and Russian cooperation on
these issues hasn’t been forthcoming, even as the West downplayed
China’s economic intimidation and ignored Russian aggression. Bei-
jing and Moscow have shown that they will make concessions only out
of self-interest, not out of goodwill. By mobilizing the resources of
the world’s strongest democracies, a G-12 would enable the West to
conduct its diplomacy with both countries from a position of strength.
The G-12’s approach to China, Russia, and other autocracies
should be similar to what U.S. Secretary of State Antony Blinken
has described as the Biden administration’s approach to China:
“competitive when it should be, collaborative when it can be, and
adversarial when it must be.” To that end, the G-12 would need to
make clear what it is for, not just what it is against. Its purpose
would not be to hold down China or Russia or transform them or
other countries into Western democracies. Its purpose would be to
defend the core principles of the postwar order: respect for the
sovereignty of large and small countries alike, adherence to the rule
2022 127
July/August 2022
of law, support for democracy and human rights, and a commit-

ment to the peaceful settlement of disputes.
DEMOCRATIC DIVISION
Western democracies may share a commitment to liberal values, but
they will always have their own interests. This fact has been reflected in
the West’s response to the invasion of Ukraine, with the varying levels
of enthusiasm among U.S. allies for cutting off Russian energy exports
and supplying heavy weapons to Ukraine. The difficulty of forging
common policies will only grow as the subject shifts from existential
threats to more mundane choices over trade or technology policy.
Just as important, democracies outside the West have not united
against Russia’s aggression. Brazil, India, South Africa, and other
democracies in the Americas, Asia, and Africa have refused to con-
demn the violation of Ukraine’s sovereignty, declined to back sanc-
tions against Russia, and, in a few cases, sought to exploit the war
to their benefit. This resurfacing of Cold War–style nonalignment
reflects a complex mix of self-interest, historical sympathies and
resentments, and preoccupations with more immediate problems
closer to home. None of this should be surprising. Democracies
aren’t immune to being shortsighted, nursing grudges, or playing
two sides against each other for their own benefit.
Even though democratic cooperation cannot be assumed, it can
be forged. For all their failures and missteps, Western democracies
have an established record of building successful collaborative ar-
rangements and have generally fared far better than autocracies
because their interactions go beyond the transactional. Their
shared commitment to the rule of law makes it possible for them
to trust one another, which is why the United States has formal
security commitments with more than 50 allies. Russia has only
five, and China has just one—North Korea.
To build on this success, the G-12 would ideally focus on build-
ing solidarity with democracies in the “global South” that stand to
be the biggest losers if China and Russia remake the world order in
their own image. Neither Beijing nor Moscow sees smaller powers
as sovereign equals; rather, they see such countries as ripe for ex-
ploitation and manipulation. Recognition of that fact is why Kenya,
Singapore, and other non-Western democracies have joined the
West in condemning Russian aggression.
Last Best Hope
Western democracies offer other democracies much more. To be-

gin with, the joint economic output of the G-12 countries is triple
that of China’s and Russia’s combined. And if the West worked more
closely with non-Western democracies, it would likely find more
willing partners for all its diplomatic endeavors.
But the G-12 would need to live by the rules it wishes others to fol-
low, in ways that the United States and its allies have not always done
themselves. Critics rightly point to plentiful instances of Western hy-
pocrisy, with the U.S. invasion of Iraq chief among them. “Do as we
say, not as we do” is a poor foundation for building cooperation. Just
as important, the G-12 would need to view its interests broadly and
recognize that trying to compel other democracies to follow its lead
would be a losing strategy. Far better to demonstrate the real benefits,
economic and otherwise, of active cooperation with the G-12 than to
pressure other democracies to blindly follow along.
As the West works to overcome divisions among democracies, it
will also need to overcome political divisions at home. Populist na-
tionalism is a driving political force in the United States and else-
where, fostering foreign policies that are skeptical of the intentions
of others and encouraging unilateral action rather than compromise
and cooperation. The good news is that for now, Russia’s assault on
Ukraine has shaken Western publics out of their complacency. Ger-
mans have overwhelmingly embraced Chancellor Olaf Scholz’s in-
terpretation of the war as a Zeitenwende—a “historic pivot”—through
which Germany will take military security more seriously. Large ma-
jorities of Finns and Swedes now support NATO membership. Amer-
icans have supported the steps the Biden administration has taken to
aid Ukraine; in a Pew Research Center poll conducted in March, five
times as many respondents agreed that the United States should pro-
vide more aid to Kyiv as agreed that it was providing too much.
Congress has followed suit and rallied behind Ukraine.
But worrying signs exist. Hungarian Prime Minister Viktor Or-
ban’s resounding victory in his country’s March parliamentary elec-
tions and the politician Marine Le Pen’s strong performance in the
French presidential race show that a fondness for Putin is not auto-
matically disqualifying in European politics. More troubling is the
possibility that former U.S. President Donald Trump—who said Putin
was “a genius” and called him “savvy” and “smart” after Russia launched
its invasion—or someone else who shares Trump’s fondness for autocrats
2022 129
July/August 2022
could become U.S. president in January 2025. No G-12 could suc-

ceed without the active participation of the United States. When
Trump was president, he did much to upend the very rules-based
order the G-12 would seek to uphold.
And yet Orban’s effort to forge a coalition of EU discontents with
the Czech Republic, Poland, and Slovakia collapsed with the shell-
ing of Kyiv. The response by NATO member countries to the Rus-
sian invasion has answered Trump’s complaint that other alliance
members are not doing enough for defense. And a 2021 Chicago
Council survey of Americans found that respondents preferred, by
a ratio of three to one, for Washington to share leadership with oth-
ers rather than dominate them.
ANOTHER CHANCE
The fear that Trump, or at least his “America first” tendencies, could
derail a G-12 does give reason for it to proceed with caution, how-
ever. For one thing, the G-12 cannot be a return to Pax Americana.
The group’s goal would be to share responsibilities and burdens
among the most advanced Western democracies, not let Washington
dictate its terms. For another thing, the G-12 would need to deepen
economic cooperation just as much as it promotes coordination on
security matters. The rise of populist nationalism reflects the conse-
quences of unbridled globalization, which favored big business over
workers and capital over labor, leaving far too many people behind.
The success of the G-12 would ultimately rest on its ability to im-
prove conditions in the home countries of its member states as well
as abroad. This would mean reversing the race to the bottom on
corporate taxes, avoiding trade deals that ship jobs overseas, and
tackling growing income inequality.
The silver lining in the horror of the aggression against Ukraine is
that it gives the United States and its Western allies a chance to do
what they failed to accomplish after the end of the Cold War: rein-
vigorate international institutions and deepen cooperation on trans-
national threats. But this moment will not last forever. The West
needs to resist the temptation to regard the aggression against Ukraine
as an aberration rather than a trend. To that end, the United States
should join with the 11 other prospective members of the G-12 to re-
vitalize the rules-based order. Western democracies cannot afford to
squander this second chance to get things right.∂
The New Energy Order

How Governments Will Transform
Energy Markets
I
n the wake of Russia’s invasion of Ukraine, the world appears to
be at an inflection point. Business leaders have declared the ac-
celeration of deglobalization and sounded the alarm about a new
period of stagflation. Academics have decried the return of conquest
and hailed the renewal of transatlantic ties. And countries are re-
thinking almost every aspect of their foreign policies, including
trade, defense spending, and military alliances.
These dramatic shifts have overshadowed another profound
transformation in the global energy system. For the last two de-
cades, the urgent need to reduce carbon emissions has gradually
reshaped the global energy order. Now, as a result of the war in
Ukraine, energy security has returned to the fore, joining climate
change as a top concern for policymakers. Together, these dual pri-
orities are poised to reshape national energy planning, energy trade
flows, and the broader global economy. Countries will increasingly
look inward, prioritizing domestic energy production and regional
cooperation even as they seek to transition to net-zero carbon emis-
sions. If countries retreat into strategic energy blocs, a multidecade
trend toward more energy interconnectedness risks giving way to
an age of energy fragmentation.
JASON BORDOFF is Co-Founding Dean of the Columbia Climate School and Founding
Director of the Center on Global Energy Policy at Columbia University’s School of Interna-
tional and Public Affairs. During the Obama administration, he served as Special Assistant
to the President and Senior Director for Energy and Climate Change on the staff of the
National Security Council.
MEGHAN L. O’SULLIVAN is Jeane Kirkpatrick Professor of the Practice of International

Affairs at Harvard University’s Kennedy School and the author of Windfall: How the New
Energy Abundance Upends Global Politics and Strengthens America’s Power. During the
George W. Bush administration, she served as Special Assistant to the President and
Deputy National Security Adviser for Iraq and Afghanistan.

But in addition to economic nationalism and deglobalization, the

coming energy order will be defined by something that few analysts
have fully appreciated: government intervention in the energy sector on
a scale not seen in recent memory. After four decades during which they
generally sought to curb their activity in energy markets, Western gov-
ernments are now recognizing the need to play a more expansive role in
everything from building (and retiring) fossil fuel infrastructure to in-
fluencing where private companies buy and sell energy to limiting
emissions through carbon pricing, subsidies, mandates, and standards.
This shift is bound to invite comparisons to the 1970s, when exces-
sive government intervention in energy markets exacerbated repeated
energy crises. The dawning era of government intervention won’t be
a bad thing, however, if managed correctly. Appropriately limited and
tailored to address specific market failures, it can forestall the worst
effects of climate change, mitigate many energy security risks, and
help manage the biggest geopolitical challenges of the coming energy
transition. The current energy crisis has refocused the world’s atten-
tion on geopolitical energy risks, forcing a reckoning between tomor-
row’s climate ambitions and today’s energy needs and offering a
preview of the tumultuous era ahead. How governments respond to
these challenges, brought into sharp relief by Russia’s invasion of
Ukraine, will shape the new energy order for decades to come.
WORSE THAN THE DISEASE

The story of the 1970s energy crises is in part a story of government
overreach. Even before six Gulf members of the Organization of the
Petroleum Exporting Countries (OPEC) cut production and instituted
an oil embargo against the United States and other countries that sup-
ported Israel during the 1973 Yom Kippur War, Washington had ac-
tively sought to manage U.S. oil markets. In 1959, for instance,
President Dwight Eisenhower set quotas on oil imports in order to
protect American producers. These quotas had their intended effect,
allowing U.S. producers to flourish and boost supply throughout the
1960s. But they did not protect consumers from rising costs. As
Americans took to the suburbs, buying ever larger homes and cars, oil
consumption outpaced supply, and prices eventually began to rise.
To keep prices in check, President Richard Nixon tried a number of
policies. In 1971, at the same time that his administration ended the gold
standard, he imposed a series of wage and price controls, including on oil
and gas. But these measures only increased demand for oil while push-
ing down domestic supply. By the winter of 1972–73, fuel shortages had
forced some school districts to close on various days, and the media was
warning of a looming energy crisis. In the spring of 1973, Nixon relented
and revoked Eisenhower’s oil import quotas, at the same time urging
Americans to conserve gasoline. Yet by June, several months before the
Arab oil embargo, nearly half the gas stations in the country reported
problems operating normally, and drivers were struggling to find fuel.
Instead of dialing back the government’s role in energy markets,
Nixon dialed it up, and the cure proved worse than the disease. In No-
vember 1973, Nixon created a federal program through which govern-
ment officials determined how to allocate propane, heating oil, jet fuel,
diesel, and other fuels. The effort, according to William Simon, who
headed the Federal Energy Office at the time, was “a disaster.” It was
against this backdrop of government intervention that the Arab oil em-
bargo led to panic buying and lines at gas stations across the country.
The end of the 1970s saw yet another oil crisis, fueled by many of
the same forces. In late 1978, a popular uprising in Iran brought oil
production there to a standstill, causing shortages in the United States
and other countries and sending prices skyward. As they had during
the previous crisis, federal price controls and efforts at allocation only
made things worse. Americans waited in gas lines once again, were
restricted to fueling up on certain days, and listened as President
Jimmy Carter delivered his famous “crisis of confidence” speech.
Among the lessons learned from these failures was that too much gov-
ernment micromanagement of the energy economy can backfire. Carter
began deregulating energy prices, a process that President Ronald Reagan
then accelerated. Gradually, over the next few decades, the U.S. government
pared back its role in the energy economy: it phased out import quotas,
ended oil and gas price controls, and scrapped the allocation system.
To be sure, the government also enlarged its role in other energy-
related areas, instituting fuel economy standards and lower speed
limits, subsidizing synthetic fuels and home weatherization initia-
tives, creating the Strategic Petroleum Reserve, and expanding leas-
ing for exploration and production in the Gulf of Mexico and Alaska.
Its increasing use of sanctions against energy-producing nations has
been another exception to the general rule. Nevertheless, many of
the most significant changes to the energy sector since the crises of
the 1970s—such as deregulating natural gas sales and creating com-

petitive power producers and wholesale power markets—have been

guided by a bipartisan consensus that energy security and low costs
are best ensured by simply allowing the market to operate on its own.
GATHERING STORM
The energy crisis triggered by Russia’s invasion of Ukraine could be-
come the worst in half a century. Many analysts have already drawn
comparisons with the 1970s oil crises, but there are important differ-
ences. To begin with, the global economy is less energy intense. Eco-
nomic growth has outpaced growth in energy use, so the world now
uses much less energy per unit of GDP. Moreover, many more compa-
nies distribute oil globally today than did in the early 1970s, when just
a handful of firms controlled most of the world’s oil trade. As a result,
energy supply chains are now more durable.
That said, the current energy crisis goes well beyond oil and could
thus affect a wider slice of the economy. Energy sources of all kinds
stand to be disrupted by the turmoil. Russia is not only the world’s
largest exporter of oil and refined petroleum products but also the
dominant supplier of natural gas to Europe and a major exporter of
coal and the low-enriched uranium used to power nuclear plants, not
to mention many other commodities. With coal, gasoline, diesel, nat-
ural gas, and other commodity prices all near record highs, further
disruption of Russian energy supplies, whether initiated by Russia or
Europe, would accelerate inflation, invite recession, demand energy
rationing, and force business shutdowns.
The global energy system was under stress even before Russian Pres-
ident Vladimir Putin decided to invade Ukraine. Europe and other
parts of the world faced power generation challenges as more and more
of their electricity came from intermittent sources such as solar and
wind. At the same time, years of poor returns and increased climate
pressures had reduced investment in oil and gas, resulting in limited
supplies. COVID-19-related supply chain problems compounded the
scarcity and added to pricing pressures. In 2021 and early 2022, soaring
natural gas prices pushed some European utilities into bankruptcy and
forced governments to subsidize energy bills. Things could have been
even worse, but warmer-than-expected weather in Europe and Asia
eased some of the demand for energy.
Since the outbreak of the war in Ukraine, energy markets have been
even more volatile. Credit markets have tightened, leaving little liquid-
ity to support the buying and selling of oil, and both supply and de-
mand have experienced large shocks. Many buyers have steered clear of
Russian oil, concerned about Western banking and financial sanctions
as well as the potential stigma of doing business with Russia. Already,
the International Energy Agency estimates that Russia is producing
around one million fewer barrels per day, a number that could climb if
the European Union follows through with its plan to ban all Russian
crude oil, gasoline, and diesel by the end of the year. Speculation that
more sanctions could be on the horizon, coupled with OPEC’s reluctance
to backfill lost Russian oil supply, has pushed prices higher still.
As of late May, oil was trading at well over $100 per barrel. U.S.
gasoline prices reached a record high that month (not adjusted for in-
flation), and rocketing diesel prices raised the costs of shipping and
food. U.S. natural gas prices climbed to their highest level since 2008,
nearly doubling since the start of the year. Consumers in Europe and
elsewhere face an even sharper emergency as a result of record natural
gas prices. Such prices would be higher still were it not for two power-
ful factors that are at least temporarily moving the market in the op-
posite direction. COVID-19-induced lockdowns in China have seriously
dented global energy demand, and the United States and its interna-
tional partners have released unprecedented amounts of oil from their
strategic reserves. For the time being, the volume flowing from strate-
gic stockpiles roughly offsets the loss of supply from Russia.
But the worst is likely yet to come. When Chinese lockdowns ease,
oil demand will surge, pushing up prices. The same will be true for
natural gas prices, which in turn affect electricity and heating prices.
Although Russian gas has largely continued to flow to Europe, Mos-
cow has cut sales to Finland, Poland, and Bulgaria; curbed exports
through Ukraine and to a Gazprom subsidiary seized by Germany; and
threatened to sever supplies to all European countries that do not pay
in rubles. A complete cutoff of Russian gas supplies to Europe is still
unlikely, but hardly unthinkable, and would probably lead to shortages,
energy rationing, and the shuttering of energy-intensive industries.
Any additional sanctions would have second- and third-order effects
on the global energy system. Already, the turmoil in markets for lique-
fied natural gas, which has increasingly flowed toward Europe because
of higher prices there, has left Asia looking for alternative energy
sources. Coal, an abundant and comparatively cheap substitute for
natural gas, has won out. China and other countries have boosted coal

production amid rising fears of global energy shortages, taking some of

the pressure off global gas markets. Without Asia’s increased produc-
tion of coal, Europe would be less able to cope with the loss of Russian
gas. But greater reliance on coal has pushed its price to record highs as
well, leaving lower-income countries such as India and Pakistan strug-
gling to meet their energy needs in the midst of deadly heat waves.
High prices for natural gas, used to produce fertilizer, are also driving
up food prices that were already rising because of disruptions in
Russian and Ukrainian agricultural exports.
SAFE AND SECURE

These cascading emergencies demand a reevaluation of the lessons
from the 1970s about the right balance between government involve-
ment and market autonomy. Reliance on market forces has yielded
enormous benefits over the last 40 years, making energy more af-
fordable and accessible, increasing economic efficiency, and boost-
ing energy security by enabling competitive pricing to shift supplies
into markets where they are most needed. Today’s crises, however,
highlight certain market failures that can only be addressed with
greater government intervention.
Three market failures in particular reveal the need for a bigger role
for government in the effort to achieve the dual goals of enhanced
energy security and a timely transition to net-zero carbon emissions.
First, the private sector lacks sufficient incentives to build the infra-
structure and other assets that most countries need to ensure their
energy security. Second, market forces alone cannot encourage the
building of the infrastructure required for a more orderly energy tran-
sition—infrastructure that by definition may be obsolete before pri-
vate companies have achieved a full return on investment. And third,
private firms and individuals lack strong enough incentives to curb
emissions whose costs society bears.
The first of these failures has been painfully illustrated by Europe’s
vulnerability to the disruption of Russian energy exports. To achieve
energy security, countries need a range of options for purchasing en-
ergy, a diversity of energy supplies, and adequate reserves in case of
emergency—all of which require greater government intervention. Free
markets often do a good job of ensuring that consumers have a range of
options for sourcing energy. When supplies are disrupted in one loca-
tion, whether by a natural disaster or political upheaval, free trade in
highly integrated and well-functioning commodity markets allows buy-

ers to find alternatives and thereby avoid shortages. (This practice was
more difficult in the early 1970s, when oil was sold in long-term con-
tracts rather than traded globally as a commodity.) But as the current
European energy crisis makes clear, switching to alternative energy
sources for political, economic, or diplomatic reasons is only possible
when the infrastructure—ports and terminals with excess capacity, for
example—is in place to allow for the switch. The private sector lacks
incentives to invest in such infrastructure because disruptions are un-
predictable and private companies will not bear the full cost to society
of the resulting dislocations. Governments therefore need to step in.
Lithuania is a case in point. Nearly a decade ago, the country built
a floating liquefied natural gas terminal, aptly named “Independence.”
The terminal allowed the Baltic state to reduce its dependence on
Russian natural gas and negotiate better prices from Gazprom. But
the commercial operation of the terminal alone would not have justi-
fied its costs, especially since it has often operated well below capac-
ity. The terminal could be financed only thanks to loan guarantees and
other forms of aid from the Lithuanian government, in addition to
loans from the European Investment Bank. This decision to invest in
energy security infrastructure is paying dividends today, enabling
Lithuania to become the first European country to completely cease
importing Russian gas after Putin’s invasion of Ukraine.
Germany is also looking to liquefied natural gas to reduce its de-
pendence on Russian gas. Russia has long been Germany’s cheapest
source of natural gas, leading Germany to gradually increase its imports
from there and by 2021 to source more than half the gas it used from
Russia. Now, to bring non-Russian gas into the country, Berlin has
earmarked three billion euros to support the development of four
floating liquefied natural gas import terminals. Businesses and
consumers will have to pay more for their energy going forward,
but the government will have created the infrastructure to enable a
more diverse natural gas supplier base.
These moves by Lithuania and Germany build on recent efforts by
the European Commission to ensure more competition in gas mar-
kets and provide direct funding for pipeline improvements and lique-
fied natural gas infrastructure—investments that private firms alone
had little incentive to make. As a result, Europe’s natural gas market
is more resilient today than it was when Russia cut gas flows in 2009.

Government-owned stockpiles such as the U.S. Strategic Petro-

leum Reserve are another tool for energy security that cannot be
delivered solely by the market. (In Europe, many governments do
not hold reserves but instead require companies to maintain above-
normal levels of inventory.) Although such stockpiles can help ease
shortages in a crisis, they also require infrastructure that private
companies are unlikely to build on their own. U.S. President Joe
Biden’s administration has released enormous amounts of oil from
the Strategic Petroleum Reserve, for instance, but the govern-
ment’s ability to release even more to calm global prices is limited
by a shortage of available ports and terminals. In the past, such
infrastructure constraints were uncommon. Yet the shale boom
that made the United States a net energy exporter has dramatically
increased demand for port space, which is now mostly claimed by
the private sector. For government stocks to increase total global
supply rather than simply displace private-sector barrels, addi-
tional ports and terminals are needed that may see limited use out-
side of energy crunches. Given that there is little commercial
rationale for infrastructure that is only occasionally used, govern-
ments must play a role in developing it, as a major report by the
Department of Energy recommended in 2015.
Governments may also need to intervene in energy markets be-
yond those for oil and gas. The critical minerals needed for a success-
ful energy transition, such as lithium, nickel, and cobalt, are likely to
be in short supply as electric vehicles become more prevalent and as
solar, wind, batteries, and other forms of low- and zero-carbon infra-
structure proliferate. One answer would be to mine more of them. To
date, U.S. companies have largely avoided producing and processing
critical minerals because of the environmental costs associated with
doing so and the easy availability of foreign sources. But having deter-
mined that several of these minerals are critical for national security,
the Biden administration is now offering incentives to boost their
domestic production. Additional government involvement may be
needed, too. Private developers are understandably nervous about
making large investments that could take a decade or more to pay off
while major efforts are underway to find alternatives to these minerals
or to commercialize their recycling. The U.S. government might con-
sider guaranteeing such markets, as it did for COVID-19 vaccines, to
ensure the production of critical minerals on a larger scale.
Government intervention to enhance energy security need not be

limited to subsidies, tax breaks, and other incentives. Diplomacy, too,
can help secure adequate energy supplies in a crisis. When Europe
faced natural gas shortfalls last winter, for example, the United States
sent envoys to Japan and South Korea, among other places, to per-
suade them to forgo some natural gas cargoes that could then flow to
Europe instead. The United States also encouraged Qatar to allow its
gas to be sold to European buyers, third-party transactions that were
often prohibited by destination clauses in long-term contracts.
TIMED OUT
The second market failure that necessitates government intervention in
energy markets stems from the relatively short time frame that the world
has to achieve its climate goals. New oil and gas assets that are needed to
ensure energy security during the transition may need to be retired be-
fore the companies can pay their investors back. After all, what company
would risk capital to keep the lights and heat on in the near and medium
term while policymakers make increasingly ambitious pledges to render
the necessary infrastructure obsolete? To the extent that any companies
are willing to make those investments, they should not have to bet
against the world’s ability to reach its climate goals. Moreover, such in-
vestments should not create obstacles to climate action by strengthening
economic forces that oppose faster progress because they have vested
financial interests in today’s energy system.
Creative policymaking can help meet today’s energy needs without
undermining tomorrow’s energy transition. Governments might, for
instance, designate certain types of oil and gas installations as “transi-
tion assets” and take a more active role in helping private companies
build them. Assets such as regasification terminals and pipelines that
are needed today but are at risk of being stranded if the goal of net-
zero emissions is achieved by 2050 might also be required to be “tran-
sition ready”—that is, built equipped for carbon capture technology
or for low-carbon fuels such as hydrogen and ammonia—and govern-
ments might bear some of the additional costs in the early years.
Alternatively, governments could develop innovative tools to plan
for obsolescence. For instance, they might favor the permitting of
hydrocarbon infrastructure investments with shorter payback periods,
condition that permitting on having a right to pay to wind down the
asset after a specified time, or shorten the payback period by lowering

the cost of capital for private firms in exchange for the right to retire
the asset after the investment yields a certain return.
Governments will need to take great care in adopting such policies.
They should be limited to hydrocarbon projects deemed necessary for
near-term energy security needs. And they should favor projects with
more versatile uses, such as those that can deliver clean energy or
might redirect energy to other destinations. Moreover, policymakers
must carefully assess what components of the oil and gas industry are
really suitable for transition-ready projects, so that untested claims
that some oil and gas projects can be “hydrogen ready,” for example,
do not become a loophole for companies to exploit. Finally, govern-
ments should require project developers to meet the strictest emis-
sions standards—for methane leaks, for example—so that infrastructure
can have the smallest carbon footprint possible.
OWN THE PROBLEM

The third market failure that necessitates greater government inter-
vention in the energy market is by now the most familiar: private
firms and individuals do not bear the full costs to society of the car-
bon and other pollutants they emit. Governments must therefore
require producers and consumers to “internalize” these costs, through
carbon pricing or other mechanisms. Stronger government climate
policy, including carbon taxes, subsidies, mandates, and standards, is
necessary to achieve rapid reductions in carbon emissions. As the
most recent report from the UN Intergovernmental Panel on Climate
Change made clear, time is running short to avoid the most severe
consequences of climate change. If emissions are not slashed imme-
diately, it will not be possible to limit the rise in global temperature
to 1.5 degrees Celsius, the threshold above which the worst environ-
mental, health, economic, and other effects will occur. And as the
impacts of climate change become more frequent and severe, the ur-
gency of government action will grow.
Market forces alone cannot deliver a sufficiently low-carbon
economy. Without greater government intervention, real and an-
ticipated shortages of natural gas will translate into greater coal
use, for instance, as the current crisis has already demonstrated.
This may have been an acceptable response to energy insecurity in
the 1970s, when G-7 countries committed to ramping up coal pro-
duction and trade in the face of oil shortages. But as the most carbon-
intensive fuel, coal is no longer an appropriate alternative, even if it

is a workable substitute for Russian gas.
The problem of dirty fuels replacing cleaner ones in times of up-
heaval also highlights an even greater challenge: that of delivering
low-carbon energy to developing countries whose need for energy is
growing rapidly. Developed countries will need to help make private
investment in low-carbon energy for developing countries less risky.
To achieve net-zero emissions by 2050, more than 70 percent of the
clean energy investment in developing and emerging markets must
originate from the private sector, according to the International En-
ergy Agency. Governments must do more to help mobilize that capi-
tal. For example, institutions such as the World Bank and the U.S.
Development Finance Corporation could lend to local banks at af-
fordable rates, finance projects in local currency, and expand the avail-
ability of loan guarantees. These institutions could also lend to project
developers directly. Capital from development finance institutions
can go a long way toward spurring private investment.
The good news is that in the long term, many of the government
actions needed to reduce emissions—in particular by reducing demand
for oil and gas—will also boost energy security. That is in part because
energy security comes not just from producing more oil but from using
less of it. Fifteen years ago, the United States imported two-thirds of
the oil it consumed; in 2021, it exported more oil than it imported. Yet
Americans remain just as vulnerable to gasoline price hikes when global
oil supplies are disrupted. Households in Europe would similarly be
more secure if they consumed less natural gas, either by using sub-
stitutes or being more energy efficient. Here, too, there is a role
for government: public information campaigns and incentives for
efficiency-related investments can help drive the technological and be-
havioral changes needed to conserve energy during crises.
EUROPE’S 9/11
A more expansive role for government is likely to be a defining fea-
ture of the new global energy order that will emerge from the Russia-
Ukraine crisis. And just as greater government intrusion into energy
markets had profound economic, political, and geopolitical ramifi-
cations in the 1970s, such activity will be transformational today—
although not in a negative way, if done right. Structured and managed
properly, greater government engagement in the energy and cli-

mate realm can help smooth the volatility of markets, mitigate the
risks that will inevitably arise from the energy transition, and
shorten the path to net-zero emissions.
To the extent that they enhance energy security, for instance, well-
crafted government policies can reduce the risk of populist backlash,
such as France’s “Yellow Vest” protests, against climate initiatives. By
the same token, more options for sourcing energy will diminish the
geopolitical leverage that may accrue to traditional oil and gas pro-
ducers in the short term, before the energy transition is complete. As
we warned in these pages earlier this year, if Western governments
leave these decisions to the market, low-cost suppliers such as Russia
and the Arab Gulf countries will end up producing a greater share of
the world’s oil and gas during the multidecade period in which con-
sumption falls but remains substantial. This dynamic could be par-
ticularly problematic if pressures to curb fossil fuel investment lead to
a decline in production by Western energy firms even as demand rises
or plateaus. But if Western governments can facilitate investment in
transition assets, over time they can reduce both carbon emissions and
dependence on traditional producers that may exploit the transition
for their own economic and geopolitical benefit.
Government efforts to secure financing for clean energy projects in
emerging markets can also reduce another set of risks: those stemming
from the growing rift between developed and developing countries. In
the absence of such measures, the resentment of poor and middle-
income countries toward rich ones that refuse to finance fossil fuel proj-
ects in the developing world—even as they scramble to secure more oil
and gas to offset their own losses from the current crisis—will continue
to build, compromising cooperation not just on climate change but on
other critical issues such as pandemic preparedness, conflict resolution,
and counterterrorism. That the burden of a warming climate falls dis-
proportionately on the very countries that have the least responsibility
for global emissions only exacerbates their rancor.
Most important, government intervention to accelerate the reduction
of carbon emissions can prevent some of the climate change outcomes
that have the worst geopolitical and security implications. As the U.S.
National Intelligence Council concluded last year, climate change will
amplify strategic competition over the Arctic, stoke conflict over water
resources and migration, and potentially spark new kinds of geopolitical
disputes as countries unilaterally test and deploy large-scale geoengi-
neering initiatives. The emissions reductions needed to prevent these

outcomes cannot be achieved without government action.
Certainly, greater government intervention in energy markets is
not always desirable. As the U.S. experience in the 1970s showed,
governments that go too far toward national planning or uncon-
strained industrial policy will squander the many benefits of the free
market. To be successful, policymakers must narrowly tailor their
policies toward specific market failures. As Alexander Hamilton
wrote, “In matters of industry, human enterprise ought, doubtless, to
be left free in the main; not fettered by too much regulation; but prac-
tical politicians know that it may be beneficially stimulated by pru-
dent aids and encouragements on the part of the government.”
Some European countries have already gone too far in their response
to the present crisis. Spain and Portugal have approved caps on natural
gas prices that are just a fraction of the market price. Some Democrats
in the U.S. Congress have proposed a measure that would prohibit price
increases during national energy emergencies declared by the president.
As recent history suggests, such price controls will be counterproductive.
In taking a more active role in energy markets, governments must
resist the temptation to direct their energy sectors in the ways that
those with nationally owned companies do. The U.S. government, for
example, allocates permits to companies that wish to export natural
gas, but it does not direct where that gas goes—market forces do. A
more active role for government that favors some countries over oth-
ers risks politicizing the energy trade and reducing the ability of global
markets to allocate resources efficiently.
Governments must also be careful about relying too heavily on
energy diplomacy, especially that which seeks to influence what should
be market-based decisions about buying and selling energy. Recent
American efforts to free up supplies of liquefied natural gas for Eu-
rope by discouraging Asian purchases were justified in a crisis, but
caution should be exercised going forward. Injecting politics into oth-
erwise commercial matters risks undermining the faith of U.S. trad-
ing partners in the sanctity of long-term contracts, which could
ultimately hurt U.S. companies, undermine investment, or risk retal-
iatory efforts to politicize trade in other goods and services.
Also risky are aggressive government efforts to achieve energy se-
curity by disconnecting from the global energy economy. Some mem-
bers of the U.S. Congress, noting that the United States now exports

more energy than it imports, advocate curbing U.S. exports of oil and
gas in order to meet American energy needs first. Such actions would
likely backfire, undermining energy security as well as free trade. Di-
versifying supply by stimulating domestic production of key com-
modities can bring benefits, but so too does integration into a
well-supplied and flexible energy market. Energy self-sufficiency may
seem like a route to security, but it would be highly inefficient and
impose unnecessary costs. It would also leave the United States with-
out the necessary global energy linkages to meet demand in the event
of a future crisis or dip in U.S. shale production.
Finally, governments must avoid inflaming domestic partisan divi-
sions, which in the United States are already deep with regard to the
question of the role of government. In the years to come, a growing
number of legislative proposals aimed at boosting energy security,
smoothing the transition to net-zero emissions, and coping with climate
change promise more political flash points and partisan wrangling.
American leaders must therefore make a concerted effort to build a bi-
partisan and broad-based coalition in support of these measures, one that
includes everyone from environmentalists to the oil and gas industry.
Another coalition of strange bedfellows existed two decades ago, before
the shale boom, when the United States imported huge quantities of oil
from sometimes unstable regions that posed a national security threat. A
broad spectrum of interests, each motivated by different arguments,
pulled together then to push the United States to consume less oil. To-
day, a similar coalition could be built around the need for an integrated
strategy that ensures both climate security and energy security.
Europe has called the Russian war in Ukraine its 9/11. The terrorist
attacks of that day brought about a new security order that dominated the
international landscape for 20 years and is still a dominant feature of
world affairs. One legacy of the Ukraine war will be a new energy order,
originating in Europe but radiating to the farthest reaches of the global
economy. It will be defined by the dual imperatives of energy security and
climate action. Pursuing them at the same time, without allowing one to
compromise the other, will require harnessing the power of markets. But
it will also require a much more expansive role for government to lever-
age, shape, and steer those markets, correcting the failures thrown into
sharp relief by today’s crisis. Without government intervention, tailored
and restrained but nonetheless increased, the world will suffer a break-
down in energy security or the worst effects of climate change—or both.∂
Nigeria’s Second
Independence
Why the Giant of Africa Needs to Start Over
Uzodinma Iweala
N
igeria has always seemed like an impossibility. From the mo-
ment of its independence in 1960, observers questioned the
country’s viability as a multiethnic, multireligious state. How
could a country divided among two major religions and hundreds of
different ethnic groups possibly stay together? When the devastating
Nigerian civil war broke out in 1967, that skepticism appeared war-
ranted. Perhaps, many concluded, Nigeria wasn’t meant to be.
Ever since the war, one of the chief aims of Nigeria’s political
project has been to prove the doubters, both foreign and domestic,
wrong. A long line of civilian and military leaders have sought,
sometimes with brute force, to preserve the unified state, which
they have held up as a good unto itself regardless of its effect on the
people. Each year, supposed experts from outside Nigeria declare
that the state has failed and will soon disintegrate. And yet each
year, Nigeria does not disintegrate. Instead, like a chronically sick
patient who lacks a proper diagnosis and thus adequate treatment,
it soldiers on, its condition steadily worsening.
Such has been the case for the past seven years. In presidential
elections held in 2015, Muhammadu Buhari decisively defeated the
incumbent, Goodluck Jonathan, marking the first time in Nigeria’s
history that one party had peacefully transferred power to another.
Buhari was propelled to office by Nigerians worried about the sectar-
ian and religious violence threatening their country’s unity. His mes-
sage of change appealed widely, as did his platform of fighting
corruption, establishing law and order, and delivering economic pros-
UZODINMA IWEALA is CEO of the Africa Center and the author of the novel Speak No Evil.

Uzodinma Iweala
perity. Once in power, however, Buhari disappointed many of those

who had voted for him. Many of Nigeria’s economic and social indica-
tors are improving too slowly to support a rapidly growing popula-
tion. Some are heading in the wrong direction altogether.
In February 2023, Nigerian voters are set to choose a successor to
Buhari, who is term-limited from running again. The central question
animating the electorate will be not just whether Buhari’s government
delivered on its ambitious agenda but also whether his eight years in
power fostered or destroyed a sense of greater national unity. It seems
likely that, as in the past, this election cycle will be a tense affair, as
elites jockey for control of Nigeria’s lucrative economy. But although
a free and fair election will certainly reestablish some confidence in
Nigeria’s political system, those who think a vote will be a cure-all for
the country’s deep malaise are sorely mistaken.
That is because Nigeria is not a democracy constructed for the ben-
efit of the people. Instead, it is and has always been a quasi-authoritarian
state, with the roots of repression deeply embedded in its history of
British colonial control. Facing up to this reality would allow for a far
more honest conversation about Nigeria’s failure to thrive and a more
imaginative discussion about how to set the country on the path to-
ward stability and prosperity. It would show that what Nigeria needs
is not just a change in leadership but a refounding.
The stakes could hardly be higher. Nigeria is Africa’s largest econ-
omy and, with 215 million people, its most populous country. With a
median age of 18, it is projected to replace the United States as the
world’s third most populous country by 2050. A thriving Nigeria
could transform all of Africa for the better, serving as an economic
engine for the continent, and could influence global affairs as the
world’s most powerful Black nation. But if Nigeria continues to limp
along or even disintegrates, the accompanying violence and economic
chaos could immiserate hundreds of millions of Nigerians and desta-
bilize the country and the region for generations to come.
INVENTING NIGERIA
In 1914, the British amalgamated several of their West African co-
lonial and commercial entities into one territory, under a single
governor-general, Frederick Lugard—without, of course, the partici-
pation of the area’s ethnically and religiously diverse population. In
one stroke, some 18 million people were lumped together in a single
Nigeria’s Second Independence
Fighting for the future: a protest in Lagos, Nigeria, October 2020

sprawling colony: “Nigeria,” a name that had been blithely coined by
Lugard’s future wife, the journalist Flora Shaw. The population’s het-
erogeneity conveniently played into the British system of divide and
rule, whereby colonial administrators exacerbated ethnic and religious
differences to limit opposition.
To administer Nigeria, the British split the territory into three
divisions, with each of the colony’s major ethnic groups dominating
its own region: the predominantly Muslim Hausa-Fulani people in
the north, the Igbos in the southeast, and the Yorubas in the south-
west. In reality, each region contained—and still contains—a multi-
plicity of ethnicities. Recognizing the near impossibility of imposing
direct control on such a diverse population, the British operated
through a system of indirect rule in which indigenous authorities
maintained power but served at the pleasure of the crown. Each
region organized itself according to very different political struc-
tures. In the north, the Hausa-Fulani people operated within a feu-
dalistic hierarchy, with a supreme caliphate in the city of Sokoto
ruling over lesser emirates. The Yoruba southwest was governed by
S EUN SANNI / REUTE RS
a complicated system in which an oba, or “king,” ruled with the per-

mission of a council of chiefs and delegated administrative functions
to lesser authorities across the region. Within limits set by the Brit-
ish, the predominantly Igbo southeast practiced extreme democracy,
with almost no centralization of power. Elements of these different

Uzodinma Iweala
styles of governance persist in present-day political structures and

have proved to be a constant source of tension.
But the British administrative system also left its own mark. For
one thing, even though a certain amount of power was delegated to
local rulers, any kind of political conversation among indigenous peo-
ple was banned. This sowed the seeds of a post-independence govern-
ment utterly removed from local political practices and understandings
of governance, entrenching authority in white colonial officials and a
self-serving indigenous elite. Those with close ties to the political ap-
paratus—traditional rulers and newly empowered local administra-
tors—benefited greatly, often at the expense of their own people.
Even as indigenous political activism grew during the waning days of
the British Empire, there was no real rupture with the British admin-
istrative system. As many Nigerian historians and journalists have
noted, in the 1950s, while Nigerian elites were negotiating indepen-
dence from the United Kingdom, their counterparts elsewhere were
taking up arms against their colonial oppressors.
In practice, this route to independence meant that discussions
about a postcolonial Nigeria focused more on balancing power
among elites within the context of the existing administrative state
than on the actual purpose of that apparatus. Indeed, after indepen-
dence, Nigeria’s new parliamentary democracy largely reflected the
political game that had long prevailed under British rule. Northern
elites held control of the central political structure but worried
about losing ground to their southern counterparts, who were often
wealthier and had more Western education. The central state still
struggled to harmonize its relationship with the new country’s three
largely self-governed and ethnically distinct regions.
Nigeria’s first fully indigenously drafted constitution, which came
into force in 1963, enshrined an idea that had been present in the pre-
independence constitutions written by colonial governors: that each
of the three main ethnic groups would control its own region while
competing for dominance over the center. The constitution did not
take into account the deep differences that underpinned each region’s
political practices—making no effort, for example, to integrate the
Hausa-Fulani embrace of hierarchy with the Igbo commitment to
egalitarianism. The new country’s system of government perpetuated
the superficial construct of Nigeria as a nation-state while doing noth-
ing to address its ethnic, religious, and regional tensions. Politics cen-
tered on winning control of Nigeria’s federal administration and

redirecting its spoils to one ethnic community. They still do.
OFFICERS AND GENTLEMEN

Perhaps not surprisingly, this tenuous first experiment with democracy
quickly experienced turbulence. By 1965, the system was beset by de-
bilitating rivalries as the battle for control of the center reached a fever
pitch. Early the next year, a group of mostly young Igbo military offi-
cers, frustrated with what they saw as rampant corruption and a lack of
governance, staged a coup that killed 22 people, including Nigeria’s
prime minister, Abubakar Tafawa Balewa, a northerner. The event soon
led to anti-Igbo pogroms in northern Nigeria, and in 1967, the oil-rich,
predominately Igbo southeastern region declared independence as the
Republic of Biafra. The central government went to war against the
secessionists, killing some two million mostly ethnic Igbos in the pro-
cess—in large part through a blockade that purposely starved many of
them to death. After two and a half hellish years of total war and eco-
nomic ruination, the secessionists sued for peace, and the conflict
ended in 1970. In winning, Nigeria’s central government demonstrated
that there was one goal it would pursue at any price: unity.
In 1979, after 13 years of military dictatorship, Nigeria returned to
civilian rule. The new constitution established a U.S.-style political
system in which a great deal of authority was vested in the president
and various other powers devolved to newly created states. But as be-
fore, the system favored elites at the expense of the broader electorate.
Nigeria’s second democratic experiment came to an end in 1983,
when Buhari, then a major general, took power in a military coup.
So began nearly 16 years of successive military governments in
which a cadre of mostly northern generals controlled Nigeria’s high-
est office and the federal state. These military rulers, very much di-
vorced from the people they ruled, treated state resources as their
own, hoarding oil revenue or dispensing it as necessary to secure
political loyalty. Where bribery failed, violent coercion often suc-
ceeded. As with previous regimes, civilian and military alike, cor-
ruption became a feature rather than a bug.
Nigeria returned yet again to civilian rule in 1999, after the military
agreed to hold elections and then transferred power to the winner,
Olusegun Obasanjo. The new president was himself a former, although
reluctant, military head of state, ruling from 1976 to 1979, but had later

Uzodinma Iweala
been jailed for criticizing the totalitarian regime of a subsequent dicta-

tor, Sani Abacha. Obasanjo’s return to power as a civilian leader was
supposed to be an economic and political reset, a cleaning of the Au-
gean stables. On the economic front, he logged numerous successes,
clearing Nigeria’s outsize debt and setting the country on the path to-
ward record growth. Under his government, Nigeria also experienced
some progress on the democratic front: the country’s national legisla-
ture, although egregiously overcompensated and somewhat ineffectual,
maintained relative independence from the presidency.
Unfortunately, many of the newly minted politicians were former
military officers who had held positions in the previous governments
and had profited handsomely from state-sponsored patronage net-
works. Behind the scenes, a new class of kingmakers, known as “god-
fathers” because of their Mafia-like power, rigged elections, controlled
the bureaucracy, and dispensed the spoils of the state. Even though
the country could boast of a rapidly expanding private sector, the state
remained the best investment vehicle in town. Godfathers would fi-
nance a candidate in the hopes that his victory would result in prefer-
ential access to public resources, whether through government
contracts or the outright theft of state funds.
Obasanjo was reelected in 2003, and in his second term, he tried to
rein in some of the most excessive behavior in this system and con-
solidate power. But the system pushed back, with some of these god-
fathers and their beneficiaries playing up ethnic and religious divisions
and pushing divisive policies for political gain—for example, advocat-
ing the establishment of sharia across Nigeria. Later, during the abor-
tive term of Obasanjo’s weak successor, Umaru Yar’Adua, groups in
Nigeria’s north that had started out as nonviolent, such as Boko Ha-
ram, took up arms against the government. In the oil-rich Niger Delta
region, armed groups incensed by environmental destruction and
poverty began attacking oil infrastructure. After Yar’Adua died and
was replaced by Jonathan as president, the unrest continued.
THE BUHARI RECORD

In 2015, Buhari, a Muslim from the country’s far north, was able to
win enough votes in the rest of the country to defeat Jonathan. Buhari
promised to reestablish security, root out corruption, and spur mas-
sive economic growth, and in office, he has notched some successes.
His administration managed to log initial gains against Boko Haram
in the northeastern corner of Nigeria, and the monthly toll of violent

deaths in the country has decreased. He made a strong, if partisan,
anticorruption push during his first term in office, securing passage of
a law that makes it easier to bring offenders to trial. He also helped
further diversify Nigeria’s economy away from oil by making substan-
tial investments in agriculture.
But mostly, Nigerians have viewed his tenure as disappointing. Ag-
ricultural investments aside, his economic record has been poor. Since
Buhari took office, the number of people living in extreme poverty
has risen from 70 million to 88 million. The unemployment rate has
quadrupled, to 33 percent, and the
currency, the naira, has lost at least
40 percent of its value against the Nigeria is and has always
dollar. The annual inflation rate had been a quasi-authoritarian
risen from just under eight percent to state.
16 percent as of April. The country’s
domestic and international debt has
ballooned to a combined $87 billion. Roughly 85 million people, close
to 43 percent of Nigeria’s population, still have no access to electricity
from the grid. More than ten million children are not in school, a
problem that the COVID-19 pandemic has only made worse. A third of
Nigerian children under five are stunted or malnourished.
The persistent violence may be even more concerning than the eco-
nomic malaise. The geographic footprint of violence has expanded
since Buhari took office. Kidnappings and murders were once mostly
limited to the parts of northeastern Nigeria where Boko Haram is ac-
tive, but they have now spread across the entire north as other religious
groups have taken advantage of lax security to engage in terrorism,
for-profit kidnapping, and armed robbery. In March, a group of gun-
men attacked a train heading from the capital, Abuja, to Kaduna, a
state capital to the north, killing at least eight passengers and kidnap-
ping more than 160, including children and pregnant women.
Violence is also growing in the southeast, where decades of politi-
cal and economic marginalization of Igbos by the federal government
have spurred renewed separatist sentiment. Militant groups such as
the Indigenous People of Biafra, which seeks to reestablish the seces-
sionist state of 1967, use the cover of legitimate Igbo grievances to
perpetrate violence. Local press outlets have also reported increased
drug use among unemployed youth in the region, with newspapers

Uzodinma Iweala
detailing attacks by young men high on mkpuru mmiri, Igbo slang for
“crystal meth.” Nigeria’s southwest has largely been spared religious
and separatist violence, but that region has seen a marked uptick in
armed robberies. As elsewhere, such attacks are attributed to the
abundance of young men with few job prospects who are struggling
to buy essential goods as inflation rises.
Across Nigeria, the country’s winner-take-all gubernatorial elec-
tions remain tense affairs, as politicians vie for control of massive
federal allocations, much of which is spirited away for personal use.
With so much at stake, politicians often take advantage of the
state’s weak territorial control and finance local thugs or unem-
ployed youths to act as political enforcers, helping them win office
by attacking their rivals’ campaign infrastructure. Often this vio-
lence is aimed at reducing voter turnout—not merely to prevent an
opponent’s supporters from turning out at the polls but also, it
seems, to undermine the overall credibility of the election and thus
reduce the accountability required of the victor. Against this back-
drop, Nigerians are now voting with their feet. A 2021 survey con-
ducted by the Africa Polling Institute found that seven out of ten
Nigerians would emigrate if given the chance. Today, it is not un-
common to hear even the most patriotic young Nigerians offer a
wry definition of the Nigerian dream: to leave.
AN AUTHORITARIAN STATE
Nigeria’s political system defies neat packaging. Scholars have labeled
it everything from the facetious “chaosocracy” to the more benign
“entrepreneurial democracy” to the pejorative “kleptocracy.” But such
labels wrongly suggest that Nigeria’s problems stem from individual
moral failings within the political class. Academics therefore offer a
strikingly similar cure: good leadership and good governance. This
view of Nigeria requires the country to find a unicorn: a democratic
disciplinarian who will bring order and prosperity to the system. Ni-
geria has tried this several times, under both civilian and military rule.
Buhari, with his reputation as a no-nonsense former general and op-
ponent of corruption, was supposed to be exactly this person (as was
Obasanjo before him). But although Buhari can certainly be criticized
for the shortcomings of his administration, the reality is that no indi-
vidual, however well intentioned, can fix Nigeria’s problems. Endemic
to the system, they require much bigger reforms.
That starts by reconceptualizing Nigeria’s political structure.

Rather than thinking of the country as a democracy in turmoil, forma-
tion, or transition, it is more accurate to conceive of it as a quasi-
authoritarian state. Nigeria’s similarities to authoritarian states are
easier to see when the country is run by the military, but the lack of
accountability and the tendency to violate civil liberties have been
evident under civilian rule, too. At the core of Nigerian politics is an
understanding among elites that the government and the resources it
controls are not for the benefit of Nigeria’s people. The self-dealing
can reach absurd levels: in May, Nigeria’s accountant general was
arrested for allegedly stealing nearly $200 million in public funds.
The political scientists Steven Levitsky and Lucan Way have de-
scribed such states as “competitive authoritarian regimes,” systems in
which democratic institutions are so flexible and frequently abused
that the countries fail to qualify as democracies and are best thought
of as a “diminished form of authoritarianism.” In Nigeria’s case, the
authoritarian nature of the system derives from the ultimate auto-
cratic construct: the British colonial administrative state, an extractive
apparatus never fully jettisoned at independence. To this day, Nige-
rian judges and lawyers wear the absurd white wigs of their British
predecessors; city streets still bear the names of colonial officials.
Part of the problem, too, has been Nigeria’s heterogeneity, a would-
be strength that often manifests as a weakness. In more homogeneous
societies, political contestation can occur without the potential for
ethnic or religious violence. But in Nigeria, ethnic and religious divi-
sions have made electoral campaigns more fraught, because voters and
elites see the fortunes of their groups at stake. That dynamic, in turn,
makes governance itself difficult, as the political elite uses the period
between elections to consolidate resources for the next campaign
rather than for bettering the country. In states where the elite is more
homogeneous, authoritarian regimes can usually consolidate power
over time. In Nigeria, however, the push and pull of ethnic politics
has prevented government after government from doing so. The end
result has been political fragmentation along ethnic and religious
lines, economic instability, and insecurity.
Not surprisingly, then, Nigerians have long viewed politics with
extreme skepticism. Nowhere is this more apparent than in the hor-
rendously low voter turnout in presidential elections, which has
fallen steadily since the 2003 contest. In 2019, turnout dropped to a

Uzodinma Iweala
record low of 35 percent of registered voters. Elections are not the

sole defining element of a democracy, but they are a good proxy for
its health. If only a third of registered voters participate in elections
because they understandably feel that politicians handpicked by po-
litical godfathers do not represent them, it is hard to characterize
Nigeria as a democracy. Indeed, a Pew Research Center poll con-
ducted in 2018 found that 60 percent of Nigerians were dissatisfied
with their democracy. Fifty-seven percent said they believed that
elections changed little.
A NEW NIGERIA
If Nigeria is not a democracy, then the solution to its problems can
hardly be found by simply going through the motions of another
election. A cure for what ails the country requires something else:
a complete rethinking of the purpose of government. In a remark-
ably young, multiethnic, multireligious society facing a multipolar
world being transformed by global conflict, supply chain disrup-
tions, and the climate crisis, good governance means building a
truly representative political system, one that can adapt to both the
internal needs of a rapidly growing population and the external
pressures of a changing world order.
The country is presently conducting a conversation about its future
in a chaotic and unstructured fashion, as people who feel left behind
turn to violence in a quest for economic and political representation. It
need not take place this way. Nigeria should discuss its future at a na-
tional conference where representatives from all parts of society can
draft a new constitution to replace the current one, an outdated docu-
ment that was created in 1999 under the supervision of the outgoing
military government and that is insufficient for Nigeria’s current needs.
As the lawyer and educator Afe Babalola has argued, such a conference
must represent all of Nigeria’s ethnicities. Fifty percent of the dele-
gates should be women, and a significant share of the delegates should
be young. What is most crucial, Babalola has stipulated that current
officeholders should not be allowed to participate, since they are ben-
eficiaries of the destructive system that still reigns. Selecting a repre-
sentative sample of Nigerians will be challenging no matter what, but
participants could be chosen by popular vote at the community level.
Once selected and convened, they would get to work drafting a new
constitution that would later be put to a vote in a national referendum.
Nigeria has had these kinds of national dialogues at previous turn-

ing points—in 1967, 1978, 1998, 2005, and 2014—suggesting that there
is ample familiarity with setting up such a process. The 2005 and 2014
conferences were justly criticized as meaningless talk shops or, worse,
government-sponsored distractions from the real issues. But Nigeria
is now at the point where it desperately needs unfettered dialogue and
binding commitments to a democratic structure that is fundamentally
different from the competitive authoritarianism currently practiced.
Nothing should be off-limits for discussion—even the dissolution
of the country. Indeed, before doing anything else, Nigerians need
to decide: Do they want the patchwork entity named Nigeria to re-
main Nigeria? It is a reasonable
question, given that the country is
the arbitrary product of colonial Nigerians need to decide:
boundaries. Moreover, the unity-at- Do they want the
all-costs mentality fostered during
the civil war should be weighed patchwork entity named
against the benefits of a peaceful de- Nigeria to remain Nigeria?
coupling of Nigeria’s regions from
the federal government. Yet it is not
entirely clear whether each derivative political entity could survive
on its own. Could the north cope with the loss of southern oil reve-
nue? Could the south succeed without the agricultural breadbasket
of the north? Could the financial capital, Lagos, which already styles
itself a quasi-independent entity, truly operate without economic
inputs from the rest of Nigeria? Dissolution is not to be taken lightly,
but as is true in many a broken marriage, reconciliation can begin
only after the serious contemplation of divorce.
Once the conference participants have tackled the question of unity,
they can turn to the task of making Nigeria more governable and eq-
uitable. A few reforms seem especially warranted. First and foremost,
Nigeria’s experiment with a powerful centralized executive must come
to an end. This is an artifact of colonial rule, and 62 years of Nigerian
history have shown it to be fundamentally unstable for such a diverse
country. Rather, Nigerians should consider a rotating presidency made
up of a council of regional leaders. In deeply divided Switzerland, for
example, many decisions are made at the local level, and the national
parliament, full of part-time politicians, meets only a few times a year.
Rather than an all-powerful centralized executive, the president of the

Uzodinma Iweala
Swiss Confederation is the first among equals in a group of federal

councilors. Although there are major differences between Switzerland
and Nigeria (including about 200 million people), a Nigerian variant
of such a system might reduce tension around any central administra-
tion and the resources it controls while allowing the state to better
represent the country’s many different constituencies.
Beyond this, a new system of government should grant differ-
ent regions of the country the ability to decide on their own meth-
ods of governance. Newly established local political entities should
be able to administer locally determined laws as they see fit, pro-
vided that these rules meet basic thresholds for nationally agreed-
on human rights standards and are made with the widespread
participation of women. Such an arrangement would permit elas-
ticity and innovation, replacing a rigid system that has long been
a bad fit for such a diverse body politic.
Nigeria should also consider new rules for who can vote and hold
political office. Currently, voting is restricted to people 18 and older,
and the minimum age for holding elected office is 25 for the House of
Representatives, 30 for governorships, and 35 for the Senate and the
presidency. In a country where half the population is under 18, it
would be reasonable to lower the voting age to 16—or perhaps even
further, given that in some areas, girls as young as 12 are expected to
start families and boys the same age are compelled to fight. It would
also be reasonable to lower the age restrictions for elected positions
and to require retirement from all political or governmental offices by
age 60. Nigeria has made little progress under geriatric rule—Buhari
is 79 and has been absent for long stretches to receive medical care in
London—and it is not clear that the country’s elders are any wiser
than its youth. Electoral rules should also stipulate that all areas of
government must have at least 50 percent participation by women,
allowing Nigeria to say a permanent goodbye to a so-called democ-
racy in which only seven of 43 cabinet members, seven of 109 senators,
and 22 of 360 representatives are women.
Finally, to guard against the pitfalls of personality-driven gover-
nance, any form of democratic rule for Nigeria needs to shift from
the old Western paradigm in which people are elected to pass laws
to a new system in which voters directly participate in the creation
of laws that elected officials will put into effect and uphold. Tech-
nology makes direct democracy easier. For example, Nigerians
could vote online or through their phones on joint slates of laws

instead of considering each one piecemeal—a proposed method
called “combined choice.” Such measures could improve participa-
tion and transparency, fostering the kind of peaceful civic dialogue
necessary for coexistence in a pluralistic society.
DARE TO DREAM
There are many other reforms for Nigerians to consider, but the main
point is that in their quest to construct a form of government fit for
purpose, Nigerians cannot afford to limit their thinking to outdated
and flawed U.S. and European models of democracy. After all, these
are showing signs of strain even in their home countries. Indeed,
none of the ideas proposed here is utopian or foreign to Nigerians.
Many have already been suggested, and many, such as rotating execu-
tive power and direct democracy, have roots in traditional politics
practiced at the community level. The question is not whether Nige-
rians have the collective capacity to imagine how to create a truly
Nigerian democracy from scratch—they do—but whether they will
act on that vision. The alternative is to continue to privilege author-
itarian structures of governance foisted on them by outsiders, sys-
tems that were originally designed to advance the interests of
colonizers and now benefit a small group of autocratic elites.
The answer will have implications far beyond Nigeria’s borders,
especially if those borders disintegrate. The longer Nigeria wallows
in its competitive authoritarian morass, the less it will be able to deal
with the local impacts of global challenges, such as climate-driven
food insecurity and the coming shift away from fossil fuels. And
what happens in Nigeria won’t stay in Nigeria. If the country cannot
tamp down conflict and adapt to climate change, Nigerian emigra-
tion will likely destabilize neighboring countries by overloading al-
ready taxed political systems with additional people. If Nigeria
cannot plug the gaps in its territorial control, terrorist groups could
use the country as a base for attacks elsewhere. In other words, Nige-
rians and the rest of the world need Nigeria to get its governance
right, a task that begins with properly diagnosing the problem. The
solutions will come, as long as the country allows itself to dream.∂

The Myth of the Global

Why Regional Ties Win the Day
Shannon K. O’Neil
A
constant and largely unquestioned refrain in foreign policy is
that the world has globalized. Closets are full of clothes
stitched in other countries; electronics and cars are often as-
sembled far from where consumers live. U.S. investment flows into
Asian markets, and Indians decamp to the United States for graduate
school. The numbers show the magnitude of international exchange.
Trade among all countries hovers around $20 trillion, a nearly tenfold
increase from 1980. International capital flows also grew exponen-
tially during that period, from $500 billion a year to well over $4 tril-
lion. And nearly five times as many people are traveling across borders
compared with four decades ago.
It is, however, misleading to claim that this flow of goods and ser-
vices and people is always global in scale. Globalization, as commonly
understood, is mostly a myth; the reality is far closer to regionalization.
When companies, supply chains, and individuals go abroad, they don’t
go just anywhere. More often than not, they stay fairly close to home.
Consider trade. If long distances didn’t affect international sales, the
typical journey for any given purchase would be some 5,300 miles (the
average distance between two randomly selected countries). Instead,
half of what is sold abroad travels less than 3,000 miles, not much far-
ther than a flight across the United States, and certainly not far enough
to cross oceans. A study by the logistics company DHL and scholars at
the NYU Stern School of Business concluded, “If one pair of countries
is half as distant as another otherwise similar pair of countries, this
greater physical proximity alone would be expected to increase the
merchandise trade between the closer pair by more than three times.”
SHANNON K. O’NEIL, Nelson and David Rockefeller Senior Fellow for Latin America at
the Council on Foreign Relations, is the author of the forthcoming book The Globalization
Myth: Why Regions Matter (Yale University Press, 2022), from which this essay is adapted.
Companies’ forays abroad have been more regional than global, as

well. A study of the Fortune Global 500, a list of the world’s largest com-
panies, shows that two of every three dollars of their sales come from
their home regions. A study of 365 prominent multinationals found that
just nine of them were truly global, meaning that Asia, Europe, and
North America each accounted for at least
20 percent of their sales.
Additionally, the oft-repeated term The oft-repeated term
“global supply chains” is a misnomer. The “global supply chains” is
making of things across borders tends to be a misnomer.
even more regional than the buying and
selling of finished products: the pieces and
parts that come together in modern manufacturing are more likely to be
shipped between neighboring countries than from farther away.
International capital flows are also more regional than global.
Cross-border buyers of stocks, bonds, and other financial instruments
don’t invest as far away as one would expect given how global their
options are, on average going no more than the distance between To-
kyo and Singapore. Foreign direct investment tends to follow trade.
Over half of all cross-border financing circulates solely within the
European Union. And lending, borrowing, and foreign direct invest-
ment in Asia by Asian banks and companies is on the rise.
People tend to orient their lives regionally, as well. Most people
never leave their own countries. And for those who do travel abroad,
well over half never leave their regions. The vast majority of travelers
taking European vacations are European. The same goes for people
in Asia and North America. Those who move permanently abroad
also tend to stick close to their countries of origin; the majority don’t
leave their immediate region. And although students who venture
internationally tend to go farther than other travelers, 40 percent
don’t leave the geographic area in which they were born.
Over half the international flows of goods, money, information,
and people occurs within three main regional hubs: Asia, Europe, and
North America. The economic rise of China, South Korea, Taiwan,
and Vietnam began with regional investments and inputs. Eastern
Europe’s fast-paced growth came from linking to western Europe.
Between 1993 and 2007, Mexico’s economy more than doubled in size,
thanks in large part to the North American Free Trade Agreement
(NAFTA), reached in 1993 with Canada and the United States.

Shannon K. O’Neil
The overlooked reality of regionalization has implications for U.S.

policy. Although NAFTA was revised in 2020—it is now the U.S.-
Mexico-Canada Agreement (USMCA)—the North American hub is
still not as integrated as that of its East Asian and European counter-
parts. In industries for which North American regional supply chains
developed and solidified, such as vehicles and aerospace, local produc-
tion maintained its edge. But in other sectors, including electronics
and textiles, North America’s more limited regionalization led whole
industries to move wherever regional links provided a leg up.
Ideally, the United States would be inking international trade deals
to expand its market access and pursue its geopolitical aims, such as
countering China’s rise. That does not appear politically possible at
the moment, however. A more viable policy would be to fortify and
tap the United States’ regional network. That would allow Washing-
ton to access a broader swath of the global marketplace and stave off
losing more of its competitive advantage to countries that are expand-
ing their own regional footprints.
WHY REGIONAL TRUMPS GLOBAL

The major reason networks skew regional is simple: geography matters.
Even with massive container ships, moving things across oceans still
costs time and money. A transatlantic voyage adds a week to delivery, and
a trip across the Pacific Ocean adds a month before parts or goods show
up in U.S. warehouses and factories. That means producers and stores
need to maintain larger inventories of goods that come from far away.
And it is not only cargo that can be delayed or lost when trade takes
place over great distances. Even with virtually free calls, video, and
file sharing, the inherent difficulty of communicating and coordinat-
ing across space and time can add to the costs of doing business. Lan-
guage and cultural cues vary by country, and these differences often
grow with distance. (This is one reason that a quarter of trade hap-
pens among countries that share a language.) Legal codes and admin-
istrative norms also tend to be more similar the closer countries are,
eliminating the need for duplicate teams of lawyers, accountants, and
human resources specialists. And the intangible but vital task of find-
ing things in common and building trust and understanding for team-
work can get harder as the distance between people grows.
Trade pacts as well tend to be regional. Although the 1990s saw
the creation of the World Trade Organization (WTO) and the expan-
How far will they go? A port in Shenzhen, China, May 2020
sion of its membership and oversight powers, what has been as
important, if not more so, over the last 30 years has been the pro-
liferation of bilateral and multilateral free-trade agreements,
which tend to involve countries in the same region. European
countries turned first to each other for trade. Brazil joined with
Argentina, Paraguay, and Uruguay. After reaching a bilateral trade
deal with Israel, the United States turned to Canada and Mexico
and later to ten other nations in the Western Hemisphere. Asian
nations banded together through the free-trade area of the Association
of Southeast Asian Nations and later the Regional Comprehen-
sive Economic Partnership (RCEP). Global arrangements such as
the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP), the successor to a pact that was engineered
by Washington but that the United States later abandoned, are so
far more the exception than the rule.
Companies see differences in their bottom lines depending on their
geographic dispersion. Many have gone abroad to boost their earn-
MART I N P O L L AR D / R EU T E R S
ings, benefiting from the cross-country advantages of differential

skills and wage costs. Yet go too far, and costs begin to rise again. In
2010, an academic study of 123 U.S. multinationals found that returns
on assets improved as companies expanded internationally within
their region but declined when they ventured farther from home. The
management consulting group McKinsey & Company dubs this “the

Shannon K. O’Neil
globalization penalty,” finding in a survey of 500 multinational corpo-

rations that earnings diminished as operations spread out. It seems
the optimal distance for private-sector profits is a Goldilocks zone:
not too close but not too far.
THE RULE OF THREE

The strength of the regional networks that a country belongs to are
therefore particularly important. And in this regard, European
countries are well situated. Although Brexit and mounting populist
Euroskepticism may make the EU appear fragile, the European con-
tinent is, in fact, the most integrated region in the world. The deep
ties that connect its countries are rooted in over a half century of
diplomatic bargains that created a single market, a common pass-
port, and a shared currency. Today, Europeans make things together
and sell to one another, with nearly two-thirds of EU trade staying
within the union. Similarly, internal European investment exceeds
that from the rest of the world by 50 percent.
Asia is not far behind in its integration. According to the Asian
Development Bank, the proportion of the region’s trade that takes
place internally has risen from 45 percent in 1990 to nearly 60 percent
today, surpassing North America and closing in on Europe. Decades
of export-oriented development propelled by Asian business leaders
and backed by bureaucrats tied country after country together through
production supply chains. Asian countries make things together and
increasingly buy from one another: nearly one-third of Asian finished
goods are sold to consumers in the region.
North America’s countries have also deepened their economic ties
to one another. In the wake of NAFTA, trade between Canada, Mexico,
and the United States rose fourfold, outpacing that between those
countries and ones outside the region. Investment, too, became more
regional, particularly for Mexico, where since NAFTA’s signing in 1993,
one of every two dollars flowing in has come from its neighbors. In
particular, North America’s agricultural and advanced-manufacturing
supply chains expanded and strengthened over the course of the 1990s,
leading regional commerce to jump by more than a quarter.
This integration didn’t last, however; after China’s 2001 accession
to the WTO, regional exchanges dwindled, falling from around 47 per-
cent of the continent’s total trade in 2000 to a low of 39 percent in
2009, before recovering slightly to around 40 percent by 2018. Still,
although North America’s internal connections remain significantly

less robust than those in Asia and Europe, they far outstrip those
among the countries of Africa, Latin America, the Middle East, and
South Asia—regions where less than a quarter of trade and invest-
ment occurs between neighbors.
JUST IN TIME
During the COVID-19 pandemic, border closures and rising transpor-
tation costs have prompted companies to consider bringing produc-
tion closer to home. Governments have suddenly become keen to
exercise more control over international supply chains for pharmaceu-
tical and medical products. At the same time, ongoing technological
innovation has made it easier for the private sector to expand produc-
tion in different geographic neighborhoods. Automation, in particu-
lar, is making far-flung factories and supply chains less vital and less
profitable than in the past. As sensors increasingly monitor assembly
lines and equipment and robots and other forms of mechanization
take over many manufacturing processes and tasks, wages make up a
smaller part of operating costs. That development has diminished, at
least in part, the once strong draw of locations with cheap labor.
New ways of making things, such as 3-D or additive printing, are
also changing manufacturing processes, making small-batch produc-
tion runs more affordable and reducing the need for specialized facto-
ries. These advances lower the numbers of workers that companies
need and change the skill sets they seek: in many sectors, skilled (and
higher-paid) technicians have become far more important than line
workers. That shift diminishes the advantages of economies of scale,
enabling at least some companies to move production closer to con-
sumers without sacrificing profits.
The value of time is growing, too. As consumers expect faster de-
livery and near-immediate gratification, the longer lead times for
goods produced by factories thousands of miles away can mean lost
sales. The popularity of customized products also makes mass-
producing facilities abroad less relevant than in the past.
Moreover, demographic shifts are raising the low wages that
once drew so many companies to developing countries. In China,
the great migration that brought over 200 million workers from the
hinterlands to manufacturing centers has largely ended. After de-
cades of strict family planning, more workers are now exiting the

Shannon K. O’Neil
labor market than entering it. This trend looks set to accelerate: the
national workforce is expected to shrink by 100 million people over
the next 20 years. Working-age populations are contracting through-
out much of Asia, limiting labor pools and driving up wage rates
across electronics and other supply chains. In Europe, working-age
populations are in decline or appear to be headed that way. Mil-
lions of Hungarians, Romanians, and other eastern Europeans have
headed to their western neighbors in search of better pay and op-
portunities, and an influx of migrants—and, more recently, refu-
gees—is only partly replenishing workforces.
Another factor curbing globalization is climate change. Extreme
weather will increasingly upend logistics as ports flood, rails buckle,
and airplanes are more frequently grounded by storms. Longer sup-
ply chains increase these vulnerabilities and potential costs. Mean-
while, policies designed to slow the planet’s warming by cutting
emissions are raising global transportation prices, incentivizing com-
panies to manufacture goods closer to consumer markets.
THE POWER OF POLITICS

It’s not just technological and demographic shifts and climate
change that will curb globalization and favor more regionalization;
political change is playing a role, as well. After decades of opening
up to the world economy, many countries are pulling back. The
Global Trade Alert, a nonprofit that tracks and collates trade poli-
cies from official sources around the world, has calculated that since
the 2008 global financial crisis, new protectionist measures have
outpaced liberalizing ones three to one.
Meanwhile, the WTO has been sidelined. It is no longer the forum
to negotiate new trade rules. Its efforts to reshape global trade ended
in 2015, when the so-called Doha Round of talks sputtered to a close.
More niche efforts, such as attempts to reduce fishing subsidies in
mostly rich nations, are struggling. Since 2018, the WTO has been un-
able to punish countries that break the rules, as the United States,
under both the Trump and the Biden administrations, has refused to
approve new judges to its Appellate Body.
Instead, regional accords have stepped in to govern international
trade. The USMCA regulates North America’s trade ties and arbitrates
disputes. In Asia, the RCEP now governs commercial exchanges among
15 countries, removing most tariffs and combining rules of origin re-
quirements to favor regional supply chains. The African Continental

Free Trade Area agreement aspires to do something similar, replacing
a tangle of bilateral rules and regulations with a single, almost
continent-wide commercial system. Regional accords now set the
rules for more than half the world’s trade.
Geopolitical tensions threaten to fragment international com-
merce even further. Economic competition has become a pillar of
great-power rivalry. With industrial policy back in vogue, many
countries, including the United States, are throwing up protection-
ist barriers. The U.S. government has identified semiconductors,
large-capacity batteries, pharmaceuticals, and dozens of critical
minerals as vital to national security and is now implementing pol-
icies and spending tens of billions of dollars to expand stockpiles,
beef up manufacturing capacity at home and in friendly nations,
and redraw global supply chains in these designated sectors. Coun-
tries everywhere are drawing up their own lists, some of them add-
ing information and data flows, fragmenting cross-border flows of
services. As governments work to reshape the business environ-
ment across more industries, they are also implicitly or explicitly
asking other countries to choose sides through export controls and
other mechanisms. This will further limit international ties.
The push to reshore critical products and services is underway al-
most everywhere. But what most countries will find is that outside of
a few highly sensitive or vital products, companies can’t or won’t bring
production back home. Those that try to do so are more likely to go
bust as costs rise and innovation falls. The most probable scenario is
that multinationals will turn away from globalized supply chains in
favor of shorter, more duplicative regional ones. Regionalization, not
globalization, will set the corporate agenda in the coming decades.
AMERICA’S ADVANTAGE
Many of these technological, demographic, and policy shifts favor the
United States. The declining importance of cheap wages and the ris-
ing role of skilled labor should advantage better-paid U.S. workers. A
trove of intellectual property and intangible assets, including several
of the new technologies transforming work and workplaces, will allow
many U.S.-based companies to reap outsize benefits. Abundant fi-
nancing means more discoveries, more patents, and more products.
The United States also boasts clear laws and regulatory regimes—

Shannon K. O’Neil
which is why so many investors prefer stocks and bonds issued under
New York law—and a generally receptive and entrepreneurial busi-
ness environment. For all these reasons, the U.S. economy should fare
well in this next round of globalization.
Still, Washington’s advantages aren’t immutable. Other coun-
tries are also investing in education, research, and development
and advancing their own technologies and national corporate cham-
pions. Moreover, the next billion new buyers of cars, clothes, and
computers will be in Asia, where
middle classes are growing faster
Extreme weather will than in any other region. To tap into
increasingly upend logistics this growth, U.S. multinationals and
exporters will need to adapt.
as ports flood and rails To effectively compete, the United
buckle. States should pursue reforms at
home to take better care of its peo-
ple and workers and to prepare them
for a more fluid and volatile economic future. This will require
expanding safety nets, ensuring labor rights, and improving educa-
tional opportunities that upgrade Americans’ skills. Domestic in-
frastructure also needs an upgrade to lower logistical costs that
weigh down American-made goods. The $1.2 trillion set aside in
the 2021 Infrastructure Investment and Jobs Act to pay for im-
provements to highways, bridges, electric grids, and broadband is
a good start. More public spending for basic science and research
and development should follow to usher in cutting-edge scientific
breakthroughs and technologies.
In addition to getting its own house in order, the United States
needs a more strategic approach to trade. One of the country’s chal-
lenges is the eroding price competitiveness of its exports in an in-
creasing number of international markets. The countries to which
the United States enjoys preferred access account for less than 10
percent of the world’s GDP, and few of them are among the fastest-
growing markets. As other countries have formed and joined trade
accords, the cost of U.S. exports has risen in relative terms. Because
of the RCEP, cars assembled in Japan and South Korea no longer face
the double-digit tariffs that U.S.-manufactured alternatives still con-
front in the region, and Chinese steel, chemicals, and machines all
face lower levies than options made in the United States.
In an ideal world, the United States would pursue a robust and

comprehensive trade agenda. Joining the CPTPP; restarting negotia-
tions over the Transatlantic Trade and Investment Partnership, which
would have linked the U.S. and EU markets; and revitalizing the WTO
would open up more markets to U.S. goods and services and reinforce
more transparent, fair, and environmentally friendly ways of doing
business. The United States would also do well to regain its leader-
ship in international standard-setting bodies, restoring its traditional
role as a rule-maker and not just rule-taker.
But until the politics of trade change in the United States, none of
that is likely to occur. In the meantime, Washington can benefit by
turning to its neighbors. Canada and Mexico have preferred access to
many global markets where the United States pays full fare. Their
respective portfolios of free-trade agreements each cover some 1.5 bil-
lion consumers, representing nearly 60 percent of global GDP. Feeding
into Canadian or Mexican manufacturing supply chains can give U.S.
producers and parts makers preferential access to the world’s consum-
ers, which they currently lack on their own. For instance, Mexican-
made cars sold in Europe dodge the ten percent tariff U.S.-made
models face, lowering the sticker price by some $3,000 on a Ford Fo-
cus and by over $4,000 on an Audi Q5, a savings that makes it hard
for U.S. carmakers to compete. The opposite is true for U.S.-based
parts makers: Mexican plants can source up to 40 percent of their
Europe-bound models from suppliers in countries that are not part of
the bargain. That means imported Mexican-made cars sold in France
or Germany also keep U.S. factories humming.
In today’s more regionally focused world, exports are more com-
petitive when countries make them together. Much of Germany’s
touted international commercial success has resulted from its regional
manufacturing ties. By seeding plants and operations throughout
eastern Europe, Germany’s private companies—the famed Mittel-
stand—have bolstered the country’s manufacturing base and created
jobs at home as their products have thrived on global markets. China’s
spectacular rise and export dynamism similarly has depended largely
on its incorporation into regional supply chains.
If the United States wants to help its companies replicate these
successes, it also needs a regional approach. Regionalization brings
competitive advantages that a single country, even one as large and
wealthy as the United States, cannot match on its own. To make prod-

Shannon K. O’Neil
ucts as good, affordable, and fast as the competition, U.S. companies

need to be able to source parts from many places and complete some
tasks and processes in other countries.
A regional commercial strategy will also help more work stay on
the continent—and thus in the United States. When part of pro-
duction is located in Canada or Mexico, U.S. suppliers are more
likely to keep or gain contracts and remain in business than when
production moves overseas. And when orders rise, so do jobs all
along the supply chain. The Organization for Economic Coopera-
tion and Development estimates that, on average, nearly 40 per-
cent of the value of U.S. imports from Mexico is created in the
United States. For Canada, that figure is just over 25 percent. Con-
versely, U.S. input into imports from the rest of the world averages
just 4.4 percent, reflecting how few U.S.-based suppliers are part of
the global production process.
To enhance North America’s regionalization, the continent needs
to improve its linking infrastructure. This means adding land cross-
ings, upgrading thoroughfares that lead to and away from the bor-
der, expanding rail lines and depots, and investing in people and
technology to staff and to support ports of entry. With faster con-
nections and lower logistical costs, manufacturers in North Amer-
ica can make products that are more globally competitive.
As parts and components move between the three countries, work-
ers must be able to follow. More and easier legal work-based migra-
tion paths are needed to make the region as a whole more productive,
and they will require transferable credentials, licenses, and diplomas;
business visas; and longer-term migration avenues. Greater coordi-
nation in education and training can help address gaps in skill and
improve work environments to ensure that North America’s popula-
tion growth, already a bright spot for the region, continues. Educa-
tional exchanges, language learning, and cross-border apprenticeships
and skill development programs can all help build a continental
workforce better able to entice new businesses and investment. Stiff-
ening migration barriers will just lead more firms to go elsewhere.
And as the U.S. government rolls out industrial policies to in-
crease the resilience of and access to a host of critical supply chains,
its neighbors can help. Geographic diversification can offset the risks
that natural disasters and accidents pose to stockpiles and production
capacity. Regional manufacturing can lower the public financial bur-
den of subsidies, as goods are more likely to attain a higher quality at

lower cost when drawing on a cross-border network of suppliers.
North America’s regional trade has recovered, albeit slightly, from
a 2009 nadir of just 39 cents of every dollar thanks to expanding tex-
tile, machinery, and produce supply chains. But no North American
leader is prioritizing a continental commercial future. Mexico is turn-
ing inward, with energy and natural resource nationalism threatening
its manufacturing base. Canada is looking to diversify its international
commercial ties by reaping the benefit of trade deals with the United
Kingdom and the European Union and in Asia as a member of the
CPTPP. And the Biden administration is guided by another repeated
but unsubstantiated refrain, that NAFTA and other trade agreements
hurt, rather than help, U.S. workers. That is misguided: most of the
studies trashing NAFTA don’t calculate the better-paid export-oriented
jobs gained as a result of more favorable terms in the United States’
two biggest export markets; nor do they consider how lower North
American production costs kept industries, such as auto manufactur-
ing, alive and even allowed them to thrive in the face of global price
competition from vehicles manufactured in other, rival regional hubs.
Through integration, a more competitive North American econ-
omy is possible. Three decades of freer trade, the existence of so-
phisticated supply chains in specific sectors, and widespread
cross-border ties between communities and workers due to the
movement of tens of millions of people could be energized and ex-
panded. But deeper, more sustainable regionalization will also re-
quire a change in mindset. It will require recognizing that the United
States’ middle and working class would prosper more from engage-
ment in the global economy than they would from a retreat to the
domestic market. Americans could gain more jobs, profits, and fi-
nancial security if their country decided to take what is on offer: a
slice of a large and growing economic pie.∂

Can Brazil Turn Back

the Clock?
Latin America’s Nostalgia Trap and
the Return of Lula
Brian Winter
G
od is Brazilian,” a local expression goes, and during the first
decade of this century, there were reasons to believe it might
actually be true. In 2001, Goldman Sachs labeled Brazil—
along with China, India, and Russia—as the BRICs, the emerging mar-
kets that would supposedly fuel global growth for many years to come.
In the case of the South American giant, the prognosis appeared ac-
curate, at least for a while. By the end of the decade, the Brazilian
stock market’s value had quintupled. Wealth didn’t accrue exclusively
to the upper class: Brazil’s middle class expanded by some 30 million
people, and the country’s notorious gap between rich and poor nar-
rowed, if just a bit. Airplanes were full of first-time flyers, and micro-
waves and TVs flew off the shelves. Even as the economy boomed, the
rate of deforestation in the Amazon jungle fell sharply as the govern-
ment invested in stronger enforcement against illegal farming and
mining. Preparations to host the 2014 World Cup and 2016 Olympics
seemed to guarantee a long building boom and an even more promi-
nent role for Brazil on the world stage.
Today, the man who oversaw most of that euphoric era as presi-
dent from 2003 to 2010, Luiz Inácio Lula da Silva, is leading the
polls for presidential elections scheduled in October 2022. Although
no one expects a divine miracle, many Brazilians hope the longtime
metalworkers’ union leader—now 76, his trademark beard gone fully
BRIAN WINTER is Editor in Chief of Americas Quarterly. He was based in Brazil as a
correspondent from 2010 to 2015 and is the author or a co-author of four books about the
region.
Can Brazil Turn Back the Clock?
On the stump: Lula in São Paulo, Brazil, March 2022

gray—can recapture at least some of the magic. After more than a
decade of economic turmoil and political instability, Brazil is now
about 20 percent poorer on a per-person basis than it was during
Lula’s final year in office. Under the leadership of the country’s right-
wing president, Jair Bolsonaro, who is running for reelection, Brazil
has lost more than 660,000 people to COVID-19, second only to the
United States in the Western Hemisphere. Its four-decade-old de-
mocracy is under severe stress. And, in a reversal of the Lula-era
progress in protecting the Amazon, deforestation has increased dra-
matically, leading some scientists to warn that the forest, often re-
ferred to as “the world’s lungs,” is on the verge of collapse.
With a life story that reads like an epic novel and a charisma that
led U.S. President Barack Obama to call him “the most popular poli-
tician on earth,” Lula may well have the talent and experience to put
Brazil back on the right path. But it is also possible that Brazilians are
falling into a classic recurring trap of Latin American politics: hoping
that an aging leader who presided over a long-ago commodities export
CAR L A CAR N I E L / R E U T E R S
boom can somehow turn back the clock. Repeatedly over the past
century, leaders who presided over periods of unusual prosperity, such
as Juan Perón in Argentina in the late 1940s, Carlos Andrés Pérez dur-
ing Venezuela’s oil boom of the 1970s, and Colombia’s Álvaro Uribe
during the first decade of this century, have either returned to power
themselves or helped protégés get elected. But almost without excep-

Brian Winter
tion, these comebacks have ended in disappointment or disaster, in

part because the world had changed and prices for crucial exports
such as crude oil, iron ore, and soybeans had fallen.
Today’s Latin America is struggling to emerge from an especially
troubled period that saw some of the world’s highest death rates from
COVID-19, its worst rates of homicide and inequality, and a lost decade
of lackluster economic growth and social unrest. Given the scale of
these challenges, it is fair to worry that Lula’s rise may be symbolic of
what the Venezuelan intellectual Moisés Naím calls “ideological
necrophilia,” a historical preference during times of crisis for nostalgia
and shopworn ideas instead of fresh leadership and forward-looking
policy. As the 2022 presidential campaign in Brazil has progressed,
Lula’s team has been characterized by a glaring shortage of new faces,
relying instead on the principal players from his previous term to
advise him. He told one interviewer: “You have to understand that,
instead of asking what I’m going to do, you just have to look at what I
did.” But for Lula to come even close to replicating his past record, he
will have to overcome a much more adverse external context—and
the outsize expectations that have ultimately sunk most others who
attempted similar comebacks.
A REBIRTH VIA TIKTOK

Aware that his age could be perceived as a liability in this presidential
campaign, his sixth (he lost the first three), Lula has somewhat belat-
edly embraced Twitter and TikTok, where he posts videos of himself
lifting weights at regular 5:30 AM workouts, bragging, “I have the en-
ergy of a 30-year-old and the virility of a 20-year-old. . . . I want to live
until I’m 120, and that’s why I take care of myself.” Meanwhile, his
campaign has sought to remind voters of Lula’s celebrated past. Born
to two illiterate subsistence farmers, he dropped out of school after
fifth grade to help support his family as a shoe shiner and peanut seller.
He didn’t learn to read until the age of ten and went to work as a teen-
ager in an auto parts factory. After suffering an accident there that cost
him his left pinky finger, he emerged as a labor leader in the industrial
suburbs of São Paulo. His courageous role in the grassroots trade union
movement helped bring Brazil’s 1964–85 dictatorship to an end. While
Brazilians of a certain age can recite these biographical details almost
by heart, they are new to many voters in a country where the average
person was just 21 years old when Lula’s presidency ended.
Indeed, much of Brazil’s 2022 presidential campaign has been a

debate about the past, revolving around two hotly contested ques-
tions: How much credit does Lula deserve for the boom years, and
how much blame should he get for the collapse that followed? On
the first question, it is clear that Lula and Brazil’s 210 million peo-
ple had the wind strongly at their backs during his presidency. The
first decade of the twenty-first century was a period of exceptional
growth and social progress throughout most of Latin America,
primarily because of soaring demand for the region’s commodities
from China. Latin America’s exports to China grew from less than
$6.5 billion in 2002 to $67.8 billion in 2010, providing a windfall
of hard currency that many governments, including Lula’s, used to
finance social welfare programs and other public spending. Brazil
also benefited from a wave of free-market reforms made under
Lula’s immediate predecessor, Fernando Henrique Cardoso, who
served from 1995 to 2002. Those measures ended years of runaway
inflation and stabilized the financial system, making the consumer
credit boom of later years possible.
Lula’s critics still argue that he was extraordinarily lucky and did
little more in office than maintain the macroeconomic framework
he inherited from Cardoso. It is also true that in a regional context,
Brazil’s performance in the first decade of this century was not
spectacular: the GDPs of Chile, Colombia, and Peru grew signifi-
cantly faster. Where Brazil did excel, at least at first, was in making
sure the bonanza was widely shared by all segments of society. Lu-
la’s vaunted Bolsa Familia initiative paid a stipend of about $35 a
month to poorer Brazilians who met certain conditions, such as
keeping their children in school. It helped poverty fall from 40
percent to 25 percent by the end of his term, cut infant mortality
rates, and became a widely copied model as far away as South Af-
rica and Indonesia. Lula’s government also aggressively pushed in-
creases in the minimum wage, which rose almost 50 percent above
inflation during his eight years in power. That allowed millions of
Brazilians to buy cars, air conditioners, and other middle-class ac-
coutrements for the first time.
These achievements would not have been possible without Lula’s
embrace of a trait rarely associated with the Latin American left: fiscal
discipline. Fending off constant pressure from his base to spend more,
Lula’s government met ambitious budget targets year after year, al-

Brian Winter
lowing Brazil to win the confidence of investors and pay off billions of
dollars in loans to the International Monetary Fund years ahead of
schedule. Unlike many of his contemporaries, including Venezuela’s
Hugo Chávez, Lula built a broad coalition that included the working
class as well as industrialists and bankers, who saw profits soar thanks
to the inclusion of millions of new customers. This pragmatism has
led to enduring confusion over the years about what Lula really be-
lieves—an ambiguity he has often embraced, referring to himself as a
“walking metamorphosis,” after a Brazilian pop song from the 1970s.
It was always clear that China was a major reason for Brazil’s suc-
cess. Explosive Chinese growth led to insatiable demand for beef,
iron ore, petroleum, soybeans, sugar, and their derivatives—com-
modities that account for about half of Brazil’s overall exports. But
there was a point near the end of Lula’s time in office when it seemed
that the country had achieved a kind of exit velocity allowing it to
break free from its volatile past, with Lula as its wizened, magnani-
mous leader. When Rio de Janeiro was selected to host the 2016
Olympic Games, Lula broke down in tears and bear-hugged Pelé, the
Brazilian soccer legend. When the state-run oil company Petrobras
discovered unexpectedly vast new reserves of offshore oil, he de-
clared it “proof that God is Brazilian after all.” By the time Lula left
office at the end of 2010, he boasted an approval rating above 80
percent and had become one of the most recognizable leaders of the
global South. He seemed emblematic of what many believed was a
new world order in which power and economic dynamism were shift-
ing inexorably away from an aging, crisis-torn West.
AFTER THE FALL

Latin America has always been a region of dramatic booms and busts.
Still, even by its historical standards, what happened next was stun-
ning. In the early 2010s, China began rebalancing its economy away
from investment and toward greater domestic consumption, leading
some global commodities prices to fall from their heady levels. Al-
most in unison, economies throughout Latin America suffered a dete-
rioration in their terms of trade. As oil prices dropped, Venezuela
suffered a deep depression that, combined with an increasingly re-
pressive dictatorship, created a humanitarian crisis that sent six mil-
lion of its people seeking refuge abroad. Argentina, whose farm
exports had enabled robust growth from 2003 to 2010, was by 2014
again in default on its debts. Colombia saw its overall export revenue
plunge by a third in just one year. Even Chile, the world’s largest pro-
ducer of copper and the region’s erstwhile poster child of stability,
entered a period of social unrest and economic volatility from which
it has still not fully emerged. Throughout the 2010s, Latin America as
a whole averaged economic growth of just 2.2 percent a year—below
the 3.1 percent global average, and the lowest of any major group of
countries tracked by the World Bank.
Even so, arguably no collapse was more surprising than Brazil’s.
Lula’s hand-picked successor, Dilma Rousseff, also of the Workers’
Party, at first enjoyed an approval rating almost as high as his. But
when the economy started to sour, she tried to keep the good times
rolling by resorting to heavy-handed state intervention in the econ-
omy and accounting trickery to meet the rigorous budget targets that
had served Lula so well. Resisting the inevitable slowdown only
made matters worse, scaring investors and consumers alike. By 2013,
inflation was on the rise, and more than one million Brazilians took
to the streets to protest higher bus fares and other frustrations. Rous-
seff, a career public servant who had never run for public office until
Lula plucked her from relative obscurity, possessed neither the cha-
risma nor the ideological flexibility of her mentor. Lula, sidelined for
part of this period by throat cancer, was unable to help right the ship.
Brazil’s spiral deepened, and by 2015, the country was mired in its
worst recession in more than a century.
Meanwhile, prosecutors were digging into a chronic problem for
Lula’s Workers’ Party: corruption. A money-for-votes scandal came
close to resulting in impeachment proceedings during Lula’s first term
in office. But in 2014, a team of prosecutors began uncovering evidence
of a much larger corruption scheme involving Petrobras, a case that
came to be known as “the Operation Car Wash scandal” in a nod to its
origin as a small-scale probe into a gas service station in Brasilia that
was being used to launder money. Before long, they found proof that
companies were overcharging for contracts for building oil rigs, refiner-
ies, and other projects and then routing money back to a long list of
politicians in multiple parties. The network of bribes and kickbacks
extended into several countries and would send dozens of Latin Amer-
ica’s most powerful politicians and business leaders, including two for-
mer presidents of Peru, to jail. The U.S. Department of Justice at the
time called it the “largest foreign bribery case in history.” In fact, it is

Brian Winter
unclear how unusual the scheme was in the arc of Brazilian political his-
tory. As the Brazilian journalist Malu Gaspar documented in a recent
book, one of the main companies involved, the construction giant Ode-
brecht, had engaged in similar graft with previous Brazilian govern-
ments going back at least to the 1970s. Other political observers pointed
out that without the steps Lula and Rousseff allowed to strengthen
Brazil’s judicial system, such as permitting the use of plea-bargain testi-
mony in trials and appointing independent attorneys general, the Car
Wash case probably would never have come to light, much less been
prosecuted. The novelty may not have been the corruption itself, but
the fact that it was detected and punished.
But with the economy in free fall and new revelations about the scan-
dal in the press almost every day, Brazilians were in no mood for such
nuance. With overwhelming support from the general public, Congress
voted to impeach Rousseff in 2016. Two years later, Lula was sentenced
to 12 years in prison on charges that he had accepted a beachfront apart-
ment in return for helping one of the companies involved in the Car
Wash case, completing a vertiginous fall from grace. The conventional
wisdom was that his storied political career was over and that he might
spend the rest of his life in jail.
The imagery of the iconic leader locked in a 10-by-16-foot cell cer-
tainly seemed to foretell a tragic end. In a symbolic twist, Lula was
locked up inside a police building he had inaugurated himself as pres-
ident in Curitiba, the dreary capital of the state of Paraná. Only Lula
and his most die-hard supporters believed he would get another
chance at vindication. “I’m going to prove that the thieves are the
ones who arrested me,” Lula declared, comparing himself to the South
African hero Nelson Mandela. “I want to walk out of here the same
way I came in: with my head held high.”
Indeed, there was one more major plot twist left, made possible by
the failures of Lula’s successors. Michel Temer, who became president
after Rousseff ’s ouster in 2016, was a figure so grave in appearance and
manner that an ally once compared him to “a butler in a horror movie.”
By the end of his term, his approval rating had plummeted to just
four percent. In the 2018 election, which Lula was barred from run-
ning in because he was in jail, Bolsonaro won a strong mandate to
pursue a pro-business agenda and crack down on corruption. But he,
too, proved unable to live up to expectations. His divisive style, which
included hurling insults at journalists, women, and leftists, earned
him the moniker “the Trump of the tropics.” Like the U.S. president
he admired, Bolsonaro downplayed the threat of COVID-19, an ap-
proach that contributed to Brazil’s registering one of the highest mor-
tality rates from the virus in the world. He warred with Congress and
the Supreme Court instead of focusing on the economy. Through it
all, a plurality of Brazilians continued to say in polls that Lula was the
best president in their country’s history, even as he was locked up.
As the political winds shifted once again, Brazil’s Supreme Court
voted in 2019 to overturn its own three-year-old ruling requiring pris-
oners to remain confined while they awaited appeal. The decision
benefited an estimated 5,000 people, but one in particular who had a
chance to reassert his dominance over Brazilian politics. Lula walked
out of jail hours later, after 580 days behind bars, into the arms of an
ecstatic crowd of supporters waving red Workers’ Party flags embla-
zoned with his image. Four months later, the court ruled that the
main judge in the Car Wash case had been biased in his rulings against
Lula, after leaked text messages showed him coaching prosecutors on
how to pursue the case, among other violations. One by one, all the
pending charges against Lula were dropped or thrown out. Finally, in
early 2021, a judge restored his political rights. Lula’s friends say that
even he was surprised to find himself a candidate for president once
again, and with a lead in polls for the 2022 race.
EVITA LIVES ON
Latin America’s most famous, and arguably ill-fated, political come-
back involved Juan Perón, who presided over a period of such ex-
traordinary wealth from 1946 to 1955 that he once boasted that
Argentina’s central bank had to store piles of gold in the hallways.
With Europe devastated by World War II, Argentina was for a time
able to export not only agricultural produce but also industrial goods
to a rebuilding world. Alongside his wife, Eva Perón, known as
“Evita,” Perón generously distributed the windfall to the country’s
working class. After the boom faded and Evita died of cancer, Perón
was toppled in a coup and sent into exile. The country’s military rulers
even banned the use of his name in certain contexts. Nevertheless,
no one could match his legacy. He would continue to torment his
successors for the next 18 years, until finally the generals relented
and allowed Perón, then in his 70s and in ill health, to come home
and attempt to restore Argentina’s lost prosperity.

Brian Winter
It was a disaster from the very beginning. On June 20, 1973, while
awaiting Perón’s arrival from Spain, competing crowds of leftist and
rightist supporters, all of whom claimed to be the general’s true heirs,
clashed at the airport in Buenos Aires. At least 13 people died. Once
in office, Perón proved unable to handle a more adverse domestic and
external environment, failing to stabilize the economy during the
Arab oil embargo of 1973 and ensuing rise in global inflation. He
died of heart disease at age 78 after less than a year in office. A period
of intense violence and chaos followed, culminating in one of South
America’s most brutal dictatorships. The movement he inspired, Per-
onism, remains the most dominant force in Argentine politics today,
less a rigid ideology than a memory of past wealth.
There are other examples of failed second acts, less dramatic perhaps
but similar in trajectory. Carlos Andrés Pérez, who as Venezuela’s presi-
dent from 1974 to 1979 benefited from the same oil shock that felled
Perón, returned to office in 1989 in a vastly different global context. He
endured riots and coup attempts, was impeached four years later for
embezzlement, and soon found himself in prison. More recently, a host
of leaders from the boom at the beginning of this century have at-
tempted comebacks. Cristina Fernández de Kirchner, who led Argen-
tina from 2007 to 2015, is currently the vice president of a Peronist
government struggling with sinking approval and an inflation rate over
50 percent, one of the highest in the world. Two Chilean presidents,
Michelle Bachelet on the left and Sebastián Piñera on the right, re-
turned in the late 2010s for far less successful second terms. Álvaro
Uribe, who governed Colombia from 2002 to 2010 and left office with
Lula-like approval ratings, helped two Uribista successors get elected,
only to break with one of them and see the other, Iván Duque, finish his
term in 2022 with an approval rating in the 30s. Finally, the dictator
of today’s Venezuela, Nicolás Maduro, bases whatever legitimacy he has
on Chavismo, the memory of his predecessor Chávez, who died of can-
cer in 2013 before the bottom truly fell out of the economy.
Why does this keep happening? Some point to Latin America’s
long tradition of strong, personalistic leaders, caudillos such as
Simón Bolívar and Juan Manuel de Rosas who presided after the
region’s wars for independence in the nineteenth century. Others
highlight the “resource curse,” which, over the years, has afflicted
commodities-producing nations as diverse as Angola, the Nether-
lands, and Saudi Arabia. Still others see a broader decline of
Western democracies, noting that U.S. politics, too, has become

more dominated in recent years by dynastic names such as Bush,
Clinton, and perhaps now Trump, politicians who promise to re-
store an era of supposed past greatness. But Latin America does
seem to be in a league of its own.
One plausible explanation is that productivity in Latin America
has been stagnant or shrinking since the late 1960s. This affliction has
a variety of causes, including low investment, insufficient infrastructure,
and a private sector that has been crowded out of some countries by a
bloated state. But the net result is that Latin America’s economies
have been operating without what should be a major engine of growth,
leaving them reliant on two other main drivers over the last 60 years.
The first has been the expansion of the labor force. But that engine may
soon fade as well, with the region’s falling birthrates beginning to ap-
proach levels seen in western Europe, and Latin America’s population
is expected to start aging rapidly by around 2030. The second has been
commodities exports, a factor beyond anyone’s control but one that may
become even more important to the region’s fate in the years to come.
None of this is a reason to lose hope in Latin America or con-
clude that the region is forever destined to be a passive bystander
to global cycles. Past decades have seen clear progress: the great
re-democratization wave of the 1980s, the stabilizing economic re-
forms of the 1990s, and the redistributive efforts of the first decade
of this century were all milestones. Today, many positive trends are
underway. Latin America is now the world’s fastest-growing mar-
ket for venture capital. Women and historically marginalized mi-
nority groups are finally rising to leadership positions in government
and business. Some countries, such as Panama and Uruguay, have
outperformed others, and their example offers hope for what greater
trade and efforts at social inclusion can accomplish. But if the re-
gion’s goal is to converge with the living standards of Western Eu-
rope and the United States, as Lula and other politicians from his
generation long said was their mission, the status quo won’t suffice.
Today’s Latin America needs leaders who can not only distribute
wealth but also help create it. That will involve ambitious reforms
in areas from education to green energy and bold new thinking on
trade alliances and the region’s role in global supply chains. It is
unclear whether any of the region’s presidents, past or present, have
the vision, discipline, or political mandate to get it done.

Brian Winter
BACK TO THE FUTURE

As the campaign entered its home stretch, Lula sounded like a candi-
date mostly content to play his greatest hits. He spoke of old ideas, such
as creating a common currency for South America, dismissed by most
economists as unworkable, and a significant increase in public spending,
even though Brazil already has the second-largest public sector among
major Latin American economies, behind only Argentina. A photo of
Lula at a meeting in April with 19 of his closest supporters drew strong
criticism from fellow progressives because just two were women (one
was his fiancée) and none were Black—striking omissions in a country
where more than half the population is made up of people of color.
Most of his closest aides were familiar faces from his first presidency.
For his vice president, he selected Geraldo Alckmin, a 69-year-old for-
mer governor of São Paulo whom he had defeated to win the presidency
in 2006. Younger Brazilians voiced disappointment that he was not fo-
cusing more on renewable energy and gender equality.
In foreign policy, Lula seemed likely to pursue a reprise of the South-
South ties he emphasized during his first presidency, when Brazil ex-
panded diplomatic and investment ties with countries in sub-Saharan
Africa, South Asia, and elsewhere in Latin America. Celso Amorim,
who was Lula’s foreign minister during his first presidency and is ex-
pected by some to hold that position again if Lula is elected, said closer
relations with China were “inevitable,” although he added that Brazil
would cultivate a positive relationship with the United States, as well.
But on other key issues, including the economy, Lula repeatedly refused
to share details of his plans, saying his record should speak for itself.
After a decade of turmoil, that might be enough for most Brazilians.
In São Paulo and Rio de Janeiro in March, some people told me they
have no illusions about Lula’s recapturing the dynamism of his first pres-
idency. Instead, they just want a leader who is better than Bolsonaro at
protecting them from pandemics, preserving Brazil’s democracy, and
bringing down inflation—which has soared again amid the war in
Ukraine, putting the economy at risk of yet another year of very slow
growth. Many express fears that Bolsonaro would try to subvert the Oc-
tober election if he lost, following the example of former U.S. President
Donald Trump. “We just want a normal president,” said Marcos Daniel,
a factory worker in Osasco, just outside São Paulo. If Brazilians don’t
expect a savior, much less a god, they might just get what they want.∂
riddled with bad information and

The Quants in bargaining power asymmetries that
made fair pricing extraordinarily
the Room difficult: a foundational idea that has
since shaped how health-care experts
think about their field.
How Much Power Do Three years after Arrow entered the
Economists Really Have? White House, Congress established
Medicare and Medicaid: government-
Jason Furman run health insurance programs for
people older than 65 and for the very
poor, respectively. These represented
the largest changes in health policy in
Thinking Like an Economist: How U.S. history, and given Arrow’s posi-
Efficiency Replaced Equality in U.S. tion and work, it would be natural to
Public Policy think that he had a part in their cre-
BY ELIZABETH POPP BERMAN. ation. But when I asked him in 2015
Princeton University Press, 2022, what role he played in the establish-
344 pp. ment of these programs, his answer
surprised me: essentially none. Arrow,
I
n 1962, Kenneth Arrow, one of the who would eventually win a Nobel
greatest economists of the twenti- Prize for his contributions to econom-
eth century, joined the U.S. Coun- ics, hadn’t been consulted on Medicare
cil of Economic Advisers, which had and Medicaid in any way—when he
been created a decade and a half earlier was in government or out of it.
to provide impartial economic analysis In retrospect, his absence from these
to the president. John F. Kennedy had efforts is astonishing. Today, it is incon-
recently won the White House, and the ceivable that such a monumental change,
Democratic Party was engaged in a or even a minor change, in almost any
debate about whether and how to federal policy could happen without the
expand access to health insurance. It involvement of economists. If Congress
was a discussion in which Arrow was set out to further expand health care
well positioned to participate. Arrow now, for example, the Brookings Institu-
was an expert on market behavior and tion, Harvard University, and a welter of
failures, and the next year, he would other think tanks and universities would
publish a landmark paper in the Ameri- churn out policy papers and ideas. The
can Economic Review that established Urban Institute and the RAND Corpora-
the discipline of health economics. It tion would scrutinize any government
argued that the health-care market was proposal. The corridors of the White
House and the Congressional Budget
Office would be filled with economists,
JASON FURMAN is Aetna Professor of the and government staffers in both the
Practice of Economic Policy at Harvard Univer-
sity. He served as Chair of the U.S. Council of executive and legislative branches would
Economic Advisers from 2013 to 2017. pore over their analyses.
The Quants in the Room
But as the University of Michigan ing access to transportation to keeping

sociologist Elizabeth Popp Berman shows markets competitive.
in Thinking Like an Economist, for much It is to Berman’s credit as a social
of modern U.S. history, economists held scientist that she separates her own value
little sway over policymaking. It wasn’t judgments from her historical analysis,
until the 1960s that the discipline began and a reader who skips the first and last
playing a serious role in regulation and chapters of her book would be mostly
rule-making. From then through the unaware that Berman disapproves of the
mid-1980s, government agencies estab- developments she chronicles. Yet these
lished economic and policy offices to chapters make clear that she deeply
conduct cost-benefit analyses of propos- dislikes the rising power of economics,
als. To support these offices, educational which she asserts has elevated efficiency
leaders and academics developed a above social and environmental equity
network of public policy schools and and narrowed the ambitions of policy-
master’s degree programs, as well as new makers, curtailing the progress they could
think tanks and policy evaluation compa- otherwise have made on single-payer
nies. Judges started using economic health care, college-debt forgiveness, and
analysis in their opinions. Eventually, the other policies the progressive left favors.
discipline was not just part of policymak- Berman argues that “Democrats’ appar-
ing; it was central to it. ent lack of ambition” under Presidents
The historical account in Thinking Like Bill Clinton and Barack Obama was at
an Economist, which makes up the bulk of least partly due to “the rise of a distinc-
the book, is an original, insightful, and tive way of thinking about policy”—what
persuasive story. Avoiding the well- she calls “the economic style of reason-
known macroeconomic debates between ing”—now prevalent in Washington.
the Keynesians (who emphasized the In an era when free-market orthodoxy
importance of government spending) and is under fierce attack, that charge is
the monetarists (who focused on control- potent. Ultimately, however, Berman’s
ling the money supply), Berman provides case against economics is longer on
a fresh perspective emphasizing a wide assertion than proof. She underestimates
variety of microeconomic topics, includ- the degree to which economic thought
ing antitrust law, antipoverty policy, evolves as a result of genuine improve-
health care, and the environment. She ments in understanding, instead assum-
also shifts the focus away from the role of ing that it is simply a projection of power
the free-market right at places such as and interest groups. She argues for
the University of Chicago. Instead, she focusing on rights, not consequences, yet
argues that the increasing political power she ignores the multitude of rights-based
of economics was driven by the center- approaches that would go against her
left. According to Berman, proponents values, such as the libertarian view that
of a bigger, more active government high earners have the right to low taxes.
believed that economic analysis could Finally, she believes that economists and
help ensure that an expanded state their style of reasoning are more influen-
would more efficiently achieve their tial than they actually are. I should
goals, from reducing poverty to increas- know: while serving as chair of the

Jason Furman
Council of Economic Advisers, I could federal government began collecting

only dream of having the power she more data on itself and on U.S. society,
ascribes to people like me. these offices and their employees could
conduct increasingly sophisticated
POWER OR PRESTIGE calculations. The growing demand for all
According to Berman, economics first this work was met by universities across
began its march to prominence during the country, which established policy
World War II, when governments relied schools and launched new degrees
on a field called “operations research” to involving economics.
figure out the best way to accomplish Eventually, economists’ work ex-
specific objectives, such as which array of panded from government budgets into
planes to use for bombing missions. the regulatory sphere, where they moved
Operations research, the act of using from cost-effectiveness analysis (which
quantitative methods to improve decision- searches for the cheapest way to achieve a
making, has always been intertwined with goal) to cost-benefit analysis (which asks
economics, and its analytic success during whether the goal is worth pursuing in the
the war prompted the U.S. Air Force to first place). They began shaping major
continue its funding even after the Allies policy decisions. Economists persuaded
won. To that end, in 1948, it established President Jimmy Carter to deregulate the
the RAND Corporation—one of the airline industry in 1978 and the trucking
United States’ first major think tanks. industry in 1980 by showing that, accord-
RAND developed the Planning- ing to cost-benefit analysis, open airline
Programming-Budgeting System, which, and trucking markets would more
according to Berman, began “specifying efficiently and effectively transport
the broad goals of an agency or office; people and goods. By the time President
identifying the various programs that George H. W. Bush left office, cost-ben-
might be used to achieve those goals; efit analysis was an essential part of all
quantifying, to the extent possible, the regulatory policy.
cost-effectiveness of those alternative During the same period, through
programs; and then using that informa- economic research, academics and
tion as a guide to budgeting.” At first, lawyers began to shift away from the
this system was largely used by the presumption that big companies were
armed forces. But in 1965, President Lyn- necessarily bad and to study the practical
don Johnson extended the PPBS to the tradeoffs that mergers and corporate
entire executive branch, advancing the conduct have on consumers. In studies,
“economic style of reasoning” into economists showed that consolidation
domestic policy. Soon, agencies through- was far from uniformly negative, and
out the federal government began setting their findings became increasingly
up offices to undertake this economic influential at the Justice Department, the
analysis, often headed by economists, Federal Trade Commission, and, ulti-
such as Alice Rivlin and Alain Enthoven, mately, in courts—greatly reducing the
who applied it to a range of budget- ambition of antitrust enforcement.
related domains. The offices were staffed Today, economists have an office
with people with policy training. As the in the White House complex where
they analyze how the economy will for the Clean Power Plan, a govern-
evolve in response to policy changes mental initiative to cut carbon emis-
and who will win and lose as a result. sions, we found that the marginal
They play similarly critical roles in benefits of stricter limits so greatly
most government agencies. They are exceeded the marginal costs that the
deeply embedded in the budget pro- Environmental Protection Agency’s
cess, in the regulatory process, and at proposed regulations were too weak.
enforcement agencies such as the FTC. But the EPA rejected our support for
Berman laments this development. more ambitious targets. Understand-
“One might ask whether Medicare ably, the agency’s staff was more
would have ever been created had the attuned to the possibility that our ideas
CBO [Congressional Budget Office] would be vulnerable in the courts—a
existed in 1965,” she writes. judgment that we fully accepted.
But her account is more flattering to Climate change is, more generally, an
the power of economists and their ideas example of an area where the problem is
than they deserve. Economics certainly not that economists are too powerful
has much more prestige in policymak- but that they are not nearly powerful
ing than does history, psychology, or enough. To my knowledge, the largest
other disciplines—there is no Council open letter ever written by econo-
of Sociological Advisers—but very mists—eventually garnering more than
often, economics is still something 3,500 signatories from across the
policymakers use to find support for political spectrum—was the one pub-
their existing ideas rather than to lished in The Wall Street Journal in 2019
illuminate and better understand issues arguing that the United States needed a
and debates. Indeed, officials frequently carbon tax and dividend. The emissions
use economic analysis simply to ratio- reductions associated with this proposal
nalize decisions that they have already would have been substantially larger
made. During a White House meeting, than what Congress considered last year
one person with a very important policy as part of the Build Back Better plan.
job applying the types of cost-benefit That plan, by contrast, included a set of
analysis Berman critiques leaned over to climate ideas that was developed mostly
me and, referring to the president’s without the type of economic reasoning
deputy communications director, that Berman disapproves of.
whispered, “Is he by far the most Berman, of course, wants aggressive
important person in this room? Or just emissions reductions—along with a
narrowly the most important?” host of other left-leaning policy shifts.
Berman might see it as good that But she argues that governments
economic analysis is subordinate to should make these changes through a
political decisions. But economists process that’s based on fundamental
often lose policymaking fights for human rights and universality rather
causes that she would support, includ- than arriving at them by wallowing
ing more regulation. In 2014, when the through the details of quantitative
Council of Economic Advisers ana- analysis and tradeoffs. She advocates
lyzed emissions limits on power plants for more command-and-control regula-

Jason Furman
tion in climate policy: “the strategy of give $2,500 to all households. The
simply instructing government to former would do much more to reduce
determine safe levels of emissions and poverty, and it may be even more
requiring firms to meet them, as politically secure. Contrary to popular
Democrats might have proposed in the belief, more targeted programs have, if
1970s.” This type of regulation, she anything, proven hardier than universal
bemoans, “was not even discussed” dur- ones over time. Low-income programs
ing the Obama administration. such as the Earned Income Tax Credit,
Although foregrounding fundamen- Medicaid, and those that provide
tal rights may make for appealing nutritional assistance have all been
political slogans—and sometimes those expanded multiple times under both
rights may indeed win the day—it can Democratic and Republican presidential
be a poor way to design economic administrations, while universal pro-
policies that make people’s lives better. grams, such as unemployment insurance,
Take pollution. Berman writes favor- have languished. Even Social Security
ably about rules grounded in the and Medicare—the United States’ two
“implicit belief that pollution was most famous universal welfare pro-
morally wrong and therefore punish- grams—have experienced budget cuts.
able.” That concept sounds attractive,
but it is an impossible basis for public ON THE LEVEL
policy. The world cannot immediately Part of Berman’s skepticism of eco-
eliminate all carbon emissions, and nomic policy stems from her belief as a
attempts to do so would run up against sociologist that the evolution of eco-
a different set of principles: that it is nomic thinking is driven not by ad-
morally wrong to destroy jobs for vances in theory and evidence but by
low- and moderate-income workers or the interests of the powerful. When
to raise the cost of everything they buy. discussing the evolving ways economists
To properly phase out carbon emis- think about issues such as curbing
sions, states have to engage in some pollution, reducing poverty, or under-
cost-benefit research and distributional standing the consequences of larger
considerations. In other words, they businesses, Berman keeps a strong focus
need economic analysis. on the institutions that developed and
Economic research is invaluable in advanced these ideas and the interests
other areas of policymaking, such as those institutions served. For example,
social welfare spending. Many activists she quotes a lawyer trained at the
support universal payments to a soci- University of Chicago who fundraises
ety’s residents, regardless of wealth, for a summer program that instructs
both on moral grounds and because they judges on antitrust issues. “The [corpo-
believe it increases the political sustain- rate] world knew that Chicago econom-
ability of policies. But both of these ics was the only thing that could possi-
rationales have shortcomings. For the bly save them from an antitrust
same amount of money, the U.S. debacle,” the lawyer says. “Of the
government could either give $10,000 to eleven [major corporations] I wrote to,
the bottom quarter of households or within a few weeks I had $10,000 from
ten of them, and the last $10,000 came
in a few weeks later.”
Although economics has major limits
as a science, a lot of the changes in its
principles really do reflect improve-
ments in research. Many of the first
advances in antitrust regulation, for
instance, resulted from the genuine
progress of ideas. The discipline’s initial
Preparing
approach to competition policy, devel-
oped in the 1930s, held that regulators Students for
could look at the number of firms in an
industry (which was taken as fixed and a Complex
World
given) and neatly infer the impact it
would have on prices and consumers. As
a rule, then, economists concluded that
World101 is a library of free, innovative
consolidation would clearly lead to
lessons on the fundamentals of international
higher prices, a line of thinking that
relations and foreign policy. Produced by the
inspired vigorous antitrust enforcement. Council on Foreign Relations, these resources
But in the 1960s, an increasing body of empower young people with the essential
studies found that this theory was incor- knowledge, skills, and perspective to become
rect. In some cases, consolidation created informed, active citizens.
more efficient and more competitive
firms, resulting in lower costs for consum- Discover your world: world101.cfr.org
ers. It turned out that overzealous anti-
trust enforcement sometimes increased
prices. (One particularly notorious
example came in 1967, when the Supreme
Court held that national bakeries could
not sell inexpensive frozen pies in Utah
because they undercut the state’s main pie
company.) As the evidence poured in,
economists began to discard “the Brandei-
sian approach,” named after the legal
theorist Louis Brandeis, which views big
companies as inherently problematic and
understands the goals of antitrust policy
to include protecting small businesses and
democracy more broadly. Instead, they
embraced a more lenient philosophy that
would help consumers. The federal
government and judiciary followed suit,
allowing mergers and acquisitions to
proceed with renewed pace.

Jason Furman
Now, however, it is clear that regula- which everyone is equal—so long as the
tors and the courts overcorrected, grow- process of achieving equality does not
ing too lax about antitrust enforcement, result in people being much worse
which led to an overly permissive atti- off—and they have been critical to
tude toward everything from hospital advancing liberal causes. These schools of
mergers (which have increased medical thought are what led the economist Adam
costs) to technology mergers (which have Smith to oppose slavery and support
stifled innovation). But the problem in labor unions, the political theorist John
these cases was not the influence of Stuart Mill to champion women’s right to
economics. It was that policymakers did vote, and the philosopher Jeremy Ben-
not take economics seriously enough. tham to be an early strong proponent of
Powerful interests had greatly oversim- LGBTQ rights in 1785. No wonder utilitar-
plified nuanced economic research—al- ian consequentialism has been the basis of
ways replete with examples in which the peer-reviewed articles in leading econom-
mere threat of a new company entering a ics journals that endorse a top marginal
market and competing with the domi- tax rate of 70 to 95 percent.
nant incumbent was not sufficient to Consequentialism is also what forces
protect consumers from abuses—to train people to take the side effects of a policy
a generation of judges in an excessively seriously—to look at how climate regula-
narrow, free-market approach. More tion affects not just carbon emissions but
recent economics research has made it costs for consumers or how a universal
even clearer that there are limits to the program and a targeted program may
efficiency gains from mergers, that affect poverty differently. Perhaps the
vertical integration (in which one com- best example of how consequentialists
pany takes control of multiple parts of a think about side effects is economists’
single supply chain) has costs for con- comfort with putting a statistical value
sumers, and that too little competition on human life (currently about $10
can reduce quality and innovation. These million in U.S. regulatory analysis). This
are all critical findings, ones that policy- strikes noneconomists, including Ber-
makers should heed and that give pro- man, as abhorrent. But if governments
gressives ammunition. These findings fail to consider the cost of lives, they
suggest that rather than blame econo- can’t save as many people as possible
mists for bad competition policy, liberals when making life-or-death decisions.
should team up with them. Numbers may seem cold and brutal, but
Indeed, critics of the economic ap- they can be a tool for tremendous good
proach would be surprised by just how in a world where tradeoffs are inevitable.
progressive the field can be. Economics If policymakers aren’t explicit about these
itself has a strong radical tradition, tradeoffs and their respective costs, they
grounded in something that Berman will make choices that are too costly in
correctly describes but mistakenly laments: either blood or treasure.
its “unrepentantly utilitarian and conse-
quentialist” theoretical underpinnings. GETTING REAL
At their core, these philosophies hold Berman’s critique is not entirely off base,
that the best societal outcome is one in however. She is right that powerful
interests can sometimes capture eco- learn from sociologists. Economics

nomic policy, as in the overcorrection of tends to focus on outcomes, but sociol-
antitrust policy. As a discipline, econom- ogy has shown that processes are also
ics needs to do a better job of influencing tremendously important for determin-
public policy so it reflects unbiased ing how people and communities
analysis—not whims and power rela- handle and understand policy changes.
tions. Economists must also keep their Economists need to better recognize
recommendations up to date and rigor- that humans care deeply about their
ous rather than rely on whatever was in personal stories and histories, and they
the textbooks 50 years ago. For example, must learn that communicating policy
instead of endorsing financial programs decisions in a way that makes people
for the elderly, economists should feel valued, heard, and cared for is just
advocate for more investments in chil- as important as the policy decision
dren, including through more uncondi- itself. Economists must also more
tional cash payments, based on the reams broadly understand that their disci-
of newer empirical evidence showing pline is only one way of thinking about
very high returns on these investments. the world. When I teach my students
Expenditures that improve children’s about discrimination, I use bloodless
health, for instance, increase economic technical terms like “taste-based
growth by more than enough to cover discrimination” (bias that stems from
their initial budgetary cost. personal preferences) and “statistical
Economists must also do a better job discrimination” (bias that stems from
of evaluating political realities when one’s assumptions about a group of
assessing and pushing policies. The best people). But I also tell them to study
ideas are often simply not feasible, and the issues through the prisms of
although economists must make sure history, political science, literature, art,
they present regulators and lawmakers and, of course, sociology. These sub-
with the strongest overall concepts, they jects all also offer tremendous findings
must work hard to devise effective and insights that my colleagues and I
policies that are also politically tenable. should take seriously.
Just like progressive purists, who prefer That doesn’t mean the world needs
glorious losses to pragmatic compro- less economic analysis; the discipline
mises, too many economists also choose remains critical. Economists should
to oppose imperfect ideas instead of certainly highlight what critics like
soiling themselves with the task of craft- Berman get wrong, including the
ing the politically achievable second presumption that their field is simply a
best. In climate policy, for example, it is tool of the powerful, or that it is all-
clear that a carbon tax is the best way to powerful. But economists can also prove
curtail emissions. But it is also politi- their value by working collaboratively
cally impossible in the United States, and doing less to provide opponents
and U.S. economists must focus on with ammunition. Economic analysis
proposals that can actually become law. alone is not enough—either for devising
To understand the political dynam- the right policies or for bringing those
ics of policymaking, economists can policies into existence.∂

of the answer lies in the degree to which

Evil Empires? bad conduct in empires was just a limited
phase or something deeper, a structural
tendency toward unjust, organized
The Long Shadow of violence. Another lies in whether there
British Colonialism was any meaningful difference between
self-described liberal empires, with their
Lauren Benton good-on-paper claims about allegiance to
the rule of law, and illiberal empires that
condoned the arbitrary use of force and
the impunity of state actors.
Legacy of Violence: A History of the British The sweeping new book by the
Empire historian Caroline Elkins, Legacy of
BY CAROLINE ELKINS. Knopf, 2022, Violence, suggests some surprising an-
896 pp. swers. For Elkins, the “liberal imperial-
ism” of the British Empire is an oxymo-
M
ost European empires may ron. The British government claimed that
have unraveled in the twenti- spreading good governance and equal
eth century, but their legacies protections under British law were
remain. When Russian President Vladi- explicit aims of its empire, but there was
mir Putin refused to call the February nothing genuinely liberal about an
invasion of Ukraine a war, he was read- empire so steeped in the systematic,
ing from an imperial script. In Putin’s state-directed use of force. “Violence was
view, Ukraine was never a true nation- not just the British Empire’s midwife, it
state. It was a former piece of the was endemic to the structures and
Russian empire later absorbed into a systems of British rule,” Elkins writes.
rival imperial fold, one dominated by the Her chilling exposé of violence in the
United States and its western European British Empire, from the expansion of
allies. By labeling the invasion a “special the East India Company in eighteenth-
military operation,” Putin was presenting century India to the brutal suppression of
the war as an act of imperial policing, the Mau Mau uprising in twentieth-
not military aggression. century Kenya, piles example on example
Putin’s actions and rhetoric raise some of the grisly consequences of imperial rule.
uncomfortable questions for the denizens Elkins shows how imperial law
of former empires. They may reasonably facilitated violence and how practices of
wonder whether any postimperial state repression circulated around the empire.
can ever free itself from a history of But she is not a fan of nuance. In her
riding roughshod over the political aspira- eagerness to uncover the dark side of the
tions of less powerful peoples. One part empire, she pays little attention to the
ways that the law also became a resource
LAUREN BENTON is Barton M. Biggs Profes- for vulnerable groups and a battleground
sor of History and Professor of Law at Yale for anti-imperial movements. Elkins also
University and a co-author, with Lisa Ford, of
Rage for Order: The British Empire and the depicts the British Empire as more
Origins of International Law, 1800–1850. ideologically consistent and politically
Evil Empires?
coherent than it was. The book offers a Mau uprising in Kenya during the 1950s,
useful corrective to the view, champi- when the British clamped down on the
oned by the Scottish historian Niall movement with a ruthless campaign of
Ferguson and the theologian Nigel arrests, detention, and torture. Imperial
Biggar, that the legacy of the British authorities killed, maimed, or tortured
Empire was overwhelmingly positive. about 90,000 Kenyans and drove some
But Elkins’s unsatisfying alternative is to 160,000 into concentration camps.
represent the empire as a consistently The relentless recitation of such acts
malevolent force. The choice is a false makes for grim reading. But the book
one, and it creates unhappy distortions. amounts to more than a mere catalog of
In particular, it leads to a dubious atrocities. Far from representing
comparison between the so-called liberal anomalies, Elkins asserts, episodes of
imperialism of the British Empire and official violence were planned and
the fascism of Nazi Germany, overstat- coordinated by a grasping state appara-
ing the power of an ideology that was tus bent on surveillance, repression, and
never as clear as Elkins wants it to be. militarism. The movement of men and
ideas carried these practices around the
EMPIRE’S BLOODY TOLL empire, and policies of violent subjuga-
Elkins takes readers on a world tour of tion served to unify politically and
British atrocities. The set pieces of culturally disparate colonies. Martial
modern British imperial scandal are all law and other emergency measures,
here. She explores the invention of meanwhile, defined the violence of the
concentration camps in 1900 during the state as necessary and validated it.
Boer War, when the British herded about Elkins is particularly effective in
200,000 Black Africans and Afrikaners, tracing how officials moved across the
including thousands of noncombatants, empire, bringing new tactics of repres-
into murderous camps in what is now sion with them. Major General Henry
South Africa. The years that followed Tudor, for instance, recruited veterans of
saw brutal acts of reprisal in Ireland. The the Boer War to set up a paramilitary
1916 Easter Rising was met with stiff force in Ireland in 1920 before applying
repression: British forces operating his terrible expertise in Palestine.
under martial law executed 15 Irishmen Charles Tegart suppressed Indian nation-
by firing squad and interned at least alism as the commissioner of police in
1,500 civilians. Also covered is the massa- Kolkata in the 1920s before overseeing
cre at the Indian city of Amritsar in 1919, the construction of an archipelago of
when British forces fired on unarmed fortified police stations and a frontier
civilian protesters, killing at least 400 fence in the British mandate of Palestine.
and wounding some 1,500. Around the General Gerald Templer brought meth-
same time, the British were refining ods of torture and repression from
violent police tactics in Palestine, leading Palestine to Malaya, and Colonel Arthur
to the full-scale suppression of the Arab Young refined policing tactics in Malaya
revolt of the 1930s. Techniques honed before applying what he learned in
around the empire were then brought to Kenya. The military intelligence officer
bear with devastating effect in the Mau Frank Kitson “hopscotched his way

Lauren Benton
through Kenya, Malaya, Cyprus, Oman, independence in the twentieth century,

and Aden,” Elkins writes, before rising to it had spirited away reams of docu-
the rank of general in Northern Ireland. ments detailing the horrors of state-
One signal achievement of the book directed violence in Kenya and in other
is its insistence on treating Ireland as parts of the empire. Although Elkins
an integral part of the empire. Ireland was criticized for supposedly exagger-
held an “ambiguous status,” Elkins ating the harsh methods used by the
observes, as a place formally inside the British in her book Imperial Reckoning:
United Kingdom but outside it when The Untold Story of Britain’s Gulag in
“it came to the question of rule of law Kenya, which won the Pulitzer Prize in
and civil liberties.” She shows that 2006, she can be forgiven for dwelling
Ireland served as both a testing ground on her own role as an expert witness in
of new methods of imperial violence the case. The unearthed secret docu-
and a place for applying the brutal ments proved her right.
techniques developed elsewhere.
Harsh practices used to control LAW AND ORDER
imperial hot spots also surfaced back The 2012 decision of the court in favor
home. Wartime emergency powers of the plaintiffs in the Mau Mau case
applied in the empire were adapted in marks a rare moment in the book when
the United Kingdom to repress dissent, British law operates as something other
as when legislation passed in 1939 than a cover for violent state repression.
authorized detention without trial for The book emphasizes the way the law
British citizens accused of posing a functioned to legitimize imperial power.
threat to national security. Postwar Repeatedly, Elkins illustrates, martial
efforts by the United Kingdom to law and other emergency measures
position itself in the new international allowed for the suspension of funda-
order galvanized exclusionary domestic mental protections, such as the writ of
policies on migration and citizenship. habeas corpus, for imperial subjects.
Parliamentary legislation in 1962 and Other historians, including several
1971 reflected surging racism in British Elkins cites, have previously traced the
society and altered the citizenship status way martial law opened the floodgates
of people living in colonies and former of violent repression in the British
colonies with nonwhite majorities. Empire. Yet these histories have also
Particularly engaging is the account revealed that declarations of martial law
toward the end of the book of recent prompted extensive debates about the
British government efforts to hide the imperial constitution. Critics of empire
record of imperial violence. In 2009, repeatedly urged restrictions on how the
five Kenyans imprisoned and tortured law could be used to advance the inter-
in the wake of the Mau Mau revolt ests of colonial elites and unleash
brought a case against the British arbitrary power. Elkins pushes aside
government for their suffering in this well-documented history of contro-
detention. In 2011, the British govern- versy about law and justice in the
ment made the shocking announcement empire in favor of a simplistic account
that as colony after colony gained of the periodic suspension of rights.
Lauren Benton
She offers the term “legalized lawless- restore their legal rights. Indigenous
ness” to capture the phenomenon of witnesses and defendants who were not
“exceptional state-directed violence.” permitted to testify in colonial courts
Elkins here echoes the views of the found ways to enter evidence. Locals
German jurist Carl Schmitt, a critic of became notaries and lawyers. And
liberalism and member of the Nazi Party, colonial elites adapted the language of
and the Italian philosopher Giorgio liberalism to seek to hold the government
Agamben. The latter developed the idea to its promise of constitutional protec-
that “states of exception” unleash raw state tions. The use of the law and liberal
power and then gradually become the rhetoric to challenge or alter imperial rule
norm. Elkins applies this idea in analyz- may fall outside the scope of this book,
ing “exceptional” moments or “crises of but without acknowledgment of this
legitimacy” during which the law sanc- context, “legalized lawlessness” becomes a
tioned extreme violence in the empire and slogan—and an awkward one at that.
then made that violence appear routine.
The label “legalized lawlessness” is PUZZLES OF LIBERALISM
unlikely to stick—and not just because it The problems are compounded when
is a mouthful. In highlighting exceptional Elkins tries to take the measure of the
violence, Elkins manages to work against global influence of liberal imperialism.
her core argument that violence in the Although the term appears throughout
British Empire was routine and systemic. the book, Elkins does not define it with
At times, she seems aware of the tension. precision. She refers to the claims
She recognizes that declarations of advanced by many liberals that the
martial law belonged to a wider pattern in empire was a civilizing force devoted to
which legal authority in the empire was good governance. She notes, too, that
delegated to local officials, colonial elites, whereas classic liberalism centered on the
and military commanders. This structure idea of the consent of the governed, the
extended beyond exceptional moments British Empire came together through
and multiplied opportunities for extreme conquest or other means that created rule
violence. Yet Elkins returns again and without consent. And she contrasts the
again to the language of exceptionalism. liberal ideal of government as a check on
Missing from this approach is the violence with the reality of violence as
wider legal history of the empire. Histo- official government policy in the empire.
rians such as Rohit De, Lisa Ford, In pursuing her uncompromising
Richard Roberts, and Robert Travers have attack on liberalism in the empire,
tracked the extensive use of the law and Elkins has to suppress the complexity of
legal language by ordinary men and its history. She begins with the late-
women in the empire to protect their eighteenth-century impeachment and
rights and promote their own visions of acquittal of Warren Hastings, the first
justice. Colonial subjects petitioned or governor-general of Bengal, for corrup-
sued to defend property, and they fought tion in India. The conservative politician
to extend the remit of common law Edmund Burke led the prosecution, and
procedures, such as trial by jury. Ex-con- he emerges in Elkins’s account as a
victs in penal colonies maneuvered to defeated champion of imperial account-
Evil Empires?
ability. Yet Burke was no reformer. An writes, the imperial state was in reality
odd poster child for imperial restraint, he operating “under a rule-of-law fig leaf.”
wanted to rein in the power of the East The portrait of the imperial state that
India Company by subordinating it more emerges is one of irresistible and total
firmly to Parliament and, specifically, to force. This characterization stumbles
the House of Lords. Elkins also omits a when the story reaches the end of empire,
key aspect of Hastings’s defense: his as Elkins gives no compelling reason for
efforts in India to recognize Hindu and the empire’s demise. She traces anti-
Muslim law and limit the jurisdiction of imperial movements across the empire in
the East India Company. The weakness the postwar decades, emphasizing violent
of Elkins’s treatment of the Hastings campaigns over nonviolent ones, but their
trial is not that she gets the roles of effects pale in significance when compared
villain and hero wrong. It is that such with the overwhelming force of British
assignments oversimplify these legal repression. In the end, she writes, the
battles and overlook ambiguities in the British Empire folded in on itself when
relation between liberalism and empire. “the repressive center could not hold.”
Elkins is forced to veer from a The inconsistencies in her account
straightforward story of liberal complic- ultimately expose the shortcomings
ity in imperial violence when she traces of the concept of “liberal imperialism” as
debates about the constitutionality of Elkins deploys it. The empire was a site
repression in Jamaica following the of conflict in which liberalism played an
Morant Bay revolt in 1865. Governor inconsistent role. Official violence,
Edward Eyre ordered the arrest of meanwhile, was increasingly coordinated
George William Gordon, a prominent but also less than perfectly effective in
critic of the colonial government. tamping down opposition and revolt. As
Gordon was apprehended in a part of the the history of successful anti-imperial
island that was not under martial law and movements shows, the empire’s violence
then transported to Morant Bay, where was not a totalizing force, nor was its
he was tried by a military court, con- liberalism a complete sham.
victed, and hanged. In London, John
Stuart Mill and other liberals struggled ILLIBERAL EMPIRE
to reconcile the unequal and uneven Elkins’s portrait of liberal imperialism
justice of the empire with their vision of as a juggernaut brings her very close to
a government dedicated to the protection calling the British Empire fascist. Elkins
of all its citizens and subjects. Elkins repeatedly quotes contemporary observ-
pauses here to observe the tensions ers who have compared British imperial-
between liberalism and imperialism. ists to Nazis. There are so many of these
But that is all the nuance readers can quotes—I counted 15—and some are so
expect. For Elkins, liberalism never lightly contextualized that they appear
offered an effective guide to the restraint to stand in for historical description.
of power. It worked only to drape impe- This methodology, if one can call it that,
rial violence in the clothing of reform. By obscures the fact that critics of the
the time liberal imperialism reached a empire drew the comparison because it
state of “maturity” in Palestine, she would shock a postwar British public

Lauren Benton
still suffering the consequences of the broadly corrosive force than fascism.
war with Nazi Germany. Liberal imperialism was, Elkins asserts,
Elkins goes further by hinting at better than Nazism at shape shifting to
unspecified, direct connections between adapt to new political conditions—so
liberal imperialism and Nazism. In an good, in fact, that critiques of imperial
end note, she writes, “As we shall see, violence rarely stuck. Liberal imperialism
similarities between the British Empire had “an ideological elasticity that was
and totalitarian regimes were partly due absent in Nazi fascism.”
to Nazi officials borrowing from British Such statements replace history with
imperial laws and practices.” I looked innuendo. The well-supported main point
hard for this evidence. Besides a selec- that lawful, state-directed violence was
tive reading of Mein Kampf that high- systematic in the twentieth-century
lights Adolf Hitler’s envy of empires, British Empire gets lost as Elkins focuses
the evidence appears to consist mainly on elevating liberal imperialism’s place in
of Elkins’s claim that Germany’s impe- the pantheon of evil. The agenda is
rial expansion to the east represented an provocative, but it fails as a careful
adaptation of liberal imperialism be- assessment of empire and its legacy. That
cause it obliterated the sovereignty of project would require surveying the
conquered polities. broader institutional effects of British
Elkins cites the historian Mark imperialism and analyzing a centuries-
Mazower, who has argued persuasively long global order in which empires were
that Germany was an imperial state. But dominant political entities.
unlike Mazower, Elkins applies the label Official violence in the British Em-
of empire without analyzing the specific pire deserves close study, and Elkins
institutions and practices of Nazi Ger- makes an important contribution to
many. The difference is palpable. She exposing its hidden history. Yet the lens
brings little evidence to support her of liberal imperialism can also be distort-
claims that Germany was repurposing ing. As Germany showed in the 1940s
British imperial tactics in “gobbling up and as Russia demonstrates again today,
sovereign states into the Nazi empire and aspiring empires may embrace the worst
unleashing genocidal practices.” kinds of violence without any pretense of
At points, Elkins backs away from commitment to the rule of law. Liberal
equating liberal imperialism and Nazism, visions of empire both cultivated and
noting, for example, with enormous critiqued imperial violence. They do not
understatement, that “there was nothing hold a unique key to understanding
reformist about Nazi imperial ambi- state-directed atrocities.
tions.” She allows, too, that in Nazism, Readers should certainly follow
“racial domination was an end unto Elkins’s call to uncover the logic and
itself.” But the parallel lingers. Nazi patterns of violence in imperial history.
Germany, she reports, “rolled through They should also follow her impulse to
eastern Europe . . . much as Britain and ask how imperial violence was and
France had claimed large swaths of continues to be “systematized, enacted,
Africa.” In some ways, liberal imperial- and understood.” But they should follow
ism emerges as a more lasting, more her no further.∂
Greece’s travails with the IMF and

How the System other international creditors point to how
national sovereignty is conditional, not
Was Rigged absolute, in the modern world. Sovereign
nation-states are supposed to be the
constituent units of the international
The Global Economic Order system. International organizations such
and the Myth of Sovereignty as the Bretton Woods institutions—the
IMF and the World Bank—and the
Branko Milanovic United Nations exist, in part, to maintain
stable political and economic relations
between independent states and prevent
some from riding roughshod over others.
The Meddlers: Sovereignty, Empire, and But belonging to these organizations
the Birth of Global Economic Governance invariably curbs the freedom of many
BY JAMIE MARTIN. Harvard member countries, especially weaker
University Press, 2022, 352 pp. ones. An international order that claims
to rest on the sovereignty of states often
I
n 2010, Greece was mired in a major forces some countries to reckon with how
debt crisis. It had been hit hard by partial their sovereignty truly is.
the global collapse of financial In The Meddlers, the historian Jamie
markets and had just seen its govern- Martin traces the evolution of the
ment bonds downgraded to junk status. modern international economic order in
Facing the distinct possibility of default, the decades before the rise of the IMF and
the country turned for help to interna- the World Bank. In 1920, in the wake of
tional organizations: the International World War I, the governments of the
Monetary Fund (IMF), the European victorious countries created the League
Commission, and the European Central of Nations, a body meant to peacefully
Bank. These organizations provided resolve political disputes and prevent
Greece with three enormous loans in future wars. The league also sought to
2010, 2012, and 2015. But the bailouts help distressed countries by delivering
came with stiff conditions, forcing economic advice and giving lenders
domestic political and economic reforms implicit guarantees that they would
and imposing austerity measures that recoup their loans to countries in need.
plunged an already reeling country into The league’s role laid the groundwork for
further turmoil. Successive Greek the present economic order.
governments acquiesced to the terms of With a critical eye, Martin explores
these bailouts but then tried to claw back this history of the relationship between
control of the country’s domestic eco- international organizations and their
nomic policy under pressure from both nominally sovereign member states. He
the left and the right. finds that the international economic
order rests on deep inequality, on power-
BRANKO MILANOVIC is a Senior Scholar at
the Stone Center on Socio-Economic Inequality ful states dictating terms to the less
at the CUNY Graduate Center. powerful, and thus on the infringement of

Branko Milanovic
the sovereignty of weaker states. The national treasuries; when protectorates

league and its future incarnations, specifi- were unwilling to trade, European states
cally the imf and the World Bank, may would compel them to open their ports.
have formally accepted the equal sover- The United Kingdom assailed China in
eignty of their members, but in practice, this way during the two Opium Wars of
they have habitually violated this sover- the nineteenth century. British, French,
eignty. That truth, however, is not sur- and Spanish troops jointly landed in
prising. It is not altogether realistic to Mexico in 1861 to extract debt repay-
expect, as Martin seems to, that the ments from the fledgling Mexican
international economic order will uphold republic. Germany, Italy, and the United
the respect of sovereignty. That implau- Kingdom imposed a naval blockade on
sible demand gets in the way of a finer Venezuela between 1902 and 1903 after
understanding of how countries actually that country’s president refused to pay its
retain and lose sovereignty in the modern foreign debts. Gunboat diplomacy met
age, how sovereignty is often willingly, gunpoint debt collection.
although sometimes not openly, traded off These relationships changed with
by some groups within states for eco- World War I. The Meddlers opens with a
nomic gain. Big external forces may eat retelling of that conflict, when the Allies
away at the full independence of coun- worked together to coordinate access to
tries, but so, too, do the forces within. raw materials necessary for the war effort,
such as wheat from Argentina, nitrate
A SUBTLER KIND OF MEDDLING from Chile, and tin from Malaya. They
Before the nineteenth century, countries also coordinated the shipping of food,
didn’t really have to grapple with these making sure that civilian populations in
sorts of questions pertaining to sover- France, Italy, and the United Kingdom
eignty. Countries fought one another, did not go hungry. Such planning
plundered treasures, took slaves, imposed required each participant to surrender
monopolies, and did not worry much bits of its economic sovereignty for the
about rules—because there were very collective good, for instance, by organiz-
few. But questions of sovereignty became ing collective bidding processes for
more relevant with the advent in the foreign-produced raw materials and food
nineteenth century of the system of so as to limit price increases. It also
nation-states, which at first covered only complicated the relationship between
Europe and European settler societies governments and their countries’ private
(such as Australia and the United States). sectors, leading to the first attempts at
De jure and de facto European protector- state-directed economic planning in
ates, such as China, Egypt, Tunisia, and Germany and among the Allies.
the Ottoman Empire, belonged to the This kind of coordination expanded
gray zone of states that were nominally markedly with the founding of the
independent but in reality were under League of Nations. At its inception, the
the thumb of European powers. When league had 42 members, including
such protectorates were unable to repay countries in Latin America, Asia (notably
their debts, European states would China and Japan), and even a few from
enforce payment by taking control of Africa. The league got involved in a
How the System Was Rigged
variety of thorny issues that bedeviled the league’s superintendence of its

many countries in the wake of the war. It economic affairs. Martin recounts how
sent economic advisers to control govern- such tradeoffs worked in the cases of
ment spending and stabilize the hyperin- Albania and Austria between 1922 and
flation that ravaged parts of the former 1924, Greece in 1925, and, more fleet-
Austro-Hungarian Empire. It provided a ingly and unsuccessfully, China in the
forum for the negotiation of the intrac- 1930s. To Albania and Austria, the
table issue of German reparations. And it league provided foreign advisers who
tried to boost economic development in controlled each country’s fiscal policies
southern Europe by issuing small loans to to assure foreign lenders that the funds
those ethnically Greek refugees who, in were not being squandered. In Greece,
one of the population exchanges common the league provided housing and busi-
after the war, had left Turkey and moved ness loans to refugees. It sent Jean
to Greece. The multilateral power of the Monnet, a French diplomat (who would
league far outstripped the scope of earlier eventually help found the European
economic treaties agreed to by two or a Economic Coal and Steel Community),
handful of countries. Members of the to China to advise the country’s new
league had joined a voluntary interna- National Economic Council, a body
tional organization that could at some created in 1931 to help speed economic
point limit their economic sovereignty if reform in the country. But Monnet’s
they could not service their debts or mission made little impression in the
adequately run their economies. midst of China’s other problems, includ-
The league, Martin argues, ended up ing civil conflict, competing centers of
creating the kinds of rules and procedures power, and Japanese interference.
that are today taken for granted and The league’s first forays into impos-
enshrined in the policies of the imf and ing austerity policies (and thus into
the World Bank (both founded in 1944). limiting the sovereignty of member
Many countries accept the imf’s regular states) took place in European countries,
annual oversight through the so-called which bristled at being treated no better
Article IV consultations, and should they than the populations of Africa and Asia.
borrow funds from the imf, the interna- People in Christian European states
tional body places various conditions on imagined themselves at the top of a
their domestic economic and social global hierarchy; they could venture out
policies that limit their sovereignty. The and limit the sovereignty of people
league inaugurated a different kind of elsewhere, but they struggled to accept
external interference in domestic affairs, the surrender of their own sovereignty.
one far subtler than what had transpired The league’s work could not help but
before, which Martin describes as the carry colonial overtones. J. G. Moojen, a
“unwanted meddling that empires long longtime Dutch colonial official, thought
visited on semi-sovereign countries.” that his experience in suppressing
uprisings in South Sumatra uniquely
A LEAGUE OF THEIR OWN qualified him for the position of the
In exchange for help from the league in overseer of the league’s activities in
obtaining loans, a country had to accept Albania. In his application for the job, as

Branko Milanovic
Martin recounts, he drew a parallel called global South and the usual worries
between his former experience and the in Western capitals about whether the
work in Albania: the people in South debtors will repay their creditors.
Sumatra were “independent and fond of Martin shows that the country most
liberty,” much like “the Albanian moun- reluctant to give up any morsel of
tain inhabitants.” Moojen did not get the economic sovereignty was then, as it is
job—it went to another Dutch East now, the United States. The United
India official—but a league bureaucrat States, despite the efforts of President
agreed with his assessment of the Woodrow Wilson, never joined the
situation, noting that Albania was a League of Nations. It was unwilling to
country where “a certain amount of bear the costs of multilateralism, to
financial wisdom may have to be in- curb the power of its private compa-
stilled by means of a revolver.” nies, to risk being dragged into future
Perhaps one of the more fundamental wars, or, most of all, to share sover-
features of this system became clear only eignty. The British and the French felt
in hindsight. The league was formally more urgently the necessity of interna-
composed of equal member states, but in tional coordination, perhaps because
fact, the victorious great powers—France, they were less powerful than the
Italy, the United Kingdom, and, lurking ascendant United States.
on the outside, the United States—did The American position, of course,
not think that they were beholden to the changed after World War II, in part
same rules as weaker member states. The because the United States could then
defeated European powers, Austria and fully dictate the rules of the game, which
Germany, were aggrieved that they were it was not yet strong enough to do after
not afforded seats at the high table. Japan World War I. The last part of The
held less sway simply by being an Asian Meddlers discusses the forensically
country. And African countries and studied negotiations among the soon-to-
colonies found themselves at the bottom be-victorious Allies in 1944 and 1945 in
of this hierarchy. A similar pecking order Bretton Woods and at Dumbarton Oaks
persists to this day. Countless authors that led to the founding of the imf and
have told the story of the United King- the World Bank and the entire postwar
dom’s sterling devaluations in 1967 and global economic order. Martin explores
1976, which were imposed by the imf. the differences between the two main
This episode has won so much scholarly protagonists: the United States, as
attention precisely because the imf’s embodied by the Treasury Department
intrusion into the economic policies of a official Harry Dexter White, and the
major Western power remains hard to United Kingdom, represented by the
imagine today. Nowadays, when the imf economist John Maynard Keynes. The
imposes identical or much greater limits main point of contention between the
on economic decision-making in Argen- two was how countries would access imf
tina or Nigeria, for instance, the action funds, which would largely be provided
hardly arouses any interest beyond the by the United States. The United States
predictable statements of concern about insisted that the provision of funds above
the profligacy of countries in the so- a certain sum had to be followed by
increasingly tight conditions placed on after World War II were not shaped by
domestic policy. The United Kingdom, inequality and discrepancies in power
knowing that it would need to borrow was an illusion, an ideological façade
soon, argued that members of the imf made necessary by the Cold War, in
should treat access to funds as a right, not which the Western camp needed to
a privilege. Unsurprisingly, given the present itself as a team of equals.
relative imbalance of power, American
preferences won the day. THE FANTASY OF SOVEREIGNTY
This is well-trodden ground. But in Martin underlines how this parity was
several tantalizing sentences, Martin always chimerical. No iteration of
challenges, without naming it, the international order in history has allowed
economist Dani Rodrik’s influential member countries to fully preserve their
argument about the “golden age” sovereignty. As it is, countries are rarely
between 1945 and 1971 of international hermetically sealed. Even if one thinks in
economic coordination and limited purely economic terms, the borders
globalization, during which the Bretton between what is domestic and what is
Woods system functioned without too foreign are thoroughly permeable in a
much friction and allowed member world of interdependence. For instance,
states significant policy autonomy. the anti-inflationary policies of Paul
Martin’s underlying argument that the Volcker, who was chair of the U.S.
international system never treated all Federal Reserve in the 1980s, cannot be
countries the same undermines Rodrik’s understood as only a domestic issue:
thesis. Martin writes, “The challenges higher interest rates in the United States
of global governance . . . are more had enormous repercussions for indebted
significant than what is implied by countries as varied as Brazil, Mexico,
stylized histories of embedded liberal- Poland, and Romania. (The anti-
ism and its collapse into neoliberalism. inflationary measures being imposed now
There was no stable era of mid- by the U.S. Federal Reserve will likely
twentieth-century autonomy that can be have similarly deleterious consequences
easily recaptured.” And also, “There for many emerging economies.) Today,
was no golden age of national autonomy China applies all sorts of conditions, such
and sovereign equality after 1945.” as requiring the transfer of technology,
Without fully developing his argu- on access to its market; that can hardly
ment, Martin seems to dispute the view be construed as domestic policy. Con-
that the neoliberal era, ushered in by tinuous trade deficits or surpluses are not
figures such as British Prime Minister simply the concerns of the countries
Margaret Thatcher and U.S. President involved; if China and Germany run
Ronald Reagan, represented a true large trade surpluses, for instance, other
departure from the so-called golden age countries have to run trade deficits,
that preceded it. For Martin, hierarchy which they can reduce significantly only
has always existed in international by depreciating their currencies.
economic relations. The notion that It is often impossible to convincingly
relations between powerful economies distinguish between the domestic and the
and less powerful ones in the decades international sphere. By criticizing how

Branko Milanovic
stronger countries exercise power, as international organizations are imag-

Martin does, one is simply writing a ined as powerful external entities
chronicle of the inevitable and the clamping down on the independence of
obvious. An international organization, weaker states. But countries are not
such as the imf, should not try to con- homogeneous; every country contains
trive equality among its members; it many class, social, and political groups,
should set itself the more realistic goal of and some of them use international
minimizing inequity. It could do this by organizations to impose policies that
taking the social concerns of borrowing they are not strong enough to see
countries more seriously and allowing through the domestic political process.
them much longer periods of adjustment. The Austrian government in the 1920s,
For instance, it could ask borrowers to as Martin notes, did precisely that when
phase out subsidies over ten years rather seeking to advance fiscal reforms and
than three; it could resist the impulse to circumvent opposition in Parliament.
excessively financialize economies Innumerable other governments have
through encouraging the private provi- followed suit, shifting blame to foreign-
sion of pensions and education, which ers (and willingly surrendering domes-
often helps only the rich and does little tic sovereignty) as a way to further a
for the poor and the middle class; and it particular domestic interest. They cry,
should not penalize government invest- “Foreigners made us do it!” even when
ments in infrastructure and health. the tail is wagging the dog.
An ideological infrastructure that This is how powerful groups with
presumes equality will only invite the specific agendas collaborate in the
strong to come up with ever more neoliberal era. Countries yield domestic
clever narratives to justify their hege- sovereignty not under the implacable
mony. Then, in addition to de facto pressure of international organizations
inequality, countries will have to deal but through international agreements
with hypocrisy, too, as happens today that powerful social groups use to lock in
when rich countries clamor for more their preferred policies. In Globalists (one
attention to climate change while of the books Martin cites), the historian
remaining among the greatest per capita Quinn Slobodian shows that such an
emitters of carbon dioxide: the United approach was pioneered by libertarians
States’ per capita emissions are nine and the Mont Pelerin Society they
times as great as India’s; Finland’s are founded in Switzerland in 1947. They
ten times as great as Zimbabwe’s. realized that there was no real possibility
An additional problem hinted at in of a single world government that would
the chapters discussing austerity poli- advance the interests of businesses.
cies in post–World War I Austria and Instead, they argued for a “double
development loans in Greece is unfor- government”: “the imperium,” which
tunately not developed further. The would deal with political, cultural, and
desire for equal sovereignty implicitly symbolic matters and would be fully
frames every country as a homogeneous autonomous, and “the dominium,” which
entity with discrete interests. In this would be internationally controlled and
view, the League of Nations and other deal with economics. Within the latter,
cross-country business interests would ways countries surrender elements of

hold sway and ensure secure property their sovereignty. For one, weaker
rights, low taxation, and the indepen- countries are not nearly as sovereign as
dence of central banks (among other more powerful ones; inequality in
business-friendly measures) across international relations places limits on
borders. Should one country defect and the independence of less powerful
try to pursue, say, an independent countries. And second, countries
exchange-rate policy or abandon inde- voluntarily surrender sovereignty,
pendent central banking, markets would however surreptitiously, because doing
rapidly punish the renegade. The soci- so benefits particular political or class
ety’s vision of the dominium is indeed at factions in those societies. In other
work today: powerful social and class words, international organizations
groups within countries willingly trade should not be judged against an unreal-
portions of national sovereignty to istic standard of upholding the national
further their own interests. sovereignty of all their members, both
Martin’s prose is dense, and his because power is distributed unequally
blow-by-blow recounting of the events worldwide and because national sover-
that took place over almost half a century eignty is divided locally among different
is at times tedious, although impressive groups with different interests. Any
in its detail. Future economic historians international economic order must rest
will no doubt find the book useful for its on the precarious foundation of a world
list of sources: the endnotes consist of 66 of unequal and split sovereignty.
pages of references in small type, which,
at first guess, may include more than FOR THE RECORD
1,000 books and articles. The problem The article “The End of the Middle
with Martin’s detail, however, is that it East” (March/April 2022) mistakenly
often obscures the big picture. The major identified Djibouti, Eritrea, Ethiopia,
issues emerge periodically, but one wishes Kenya, Somalia, and Sudan as among
that the book were structured more the countries U.S. Central Command is
around the key questions of ideology— responsible for. Those countries were
for instance, the belief in the uncon- under the purview of U.S. Central
strained free market and its counterpart, Command until 2007, when they were
the insistence on the meaningful role of transferred to that of the newly created
the state—and international law that U.S. Africa Command.∂
shape the interactions of states.
The idea that all countries are
sovereign underpins the international
system. But that fundamental basis
appears increasingly mythical given the
Foreign Affairs (ISSN 00157120), July/August 2022, Volume 101, Number 4. Published six times annually (January, March, May, July,
September, November) at 58 East 68th Street, New York, NY 10065. Print subscriptions: U.S., $54.95; Canada, $66.95; other
countries via air, $89.95 per year. Canadian Publication Mail–Mail # 1572121. Periodicals postage paid in New York, NY, and at
additional mailing offices. POSTMASTER: Send address changes to Foreign Affairs, P.O. Box 324, Congers, NY 10920. From time to
time, we permit certain carefully screened companies to send our subscribers information about products or services that we believe
will be of interest. If you prefer not to receive such information, please contact us at the Congers, NY, address indicated above.

2022.07-08 Foreign Affairs

Uploaded by

Copyright:

Available Formats

2022.07-08 Foreign Affairs

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2022.07-08 Foreign Affairs

Uploaded by

Copyright:

Available Formats

HOW LONG CAN VLADIMIR PUTIN HOLD ON?

What the Mighty Miss 24

The Perils of Pessimism 34

The Balance of Soft Power 44

What Makes a Power Great 52

What Money Can’t Buy 64

The Consequences of Conquest 97

The Hollow Order 107

Last Best Hope 120

The New Energy Order 131

Nigeria’s Second Independence 145

The Myth of the Global 158

REVIEWS & RESPONSES

Evil Empires? 190

How the System Was Rigged 197

Russian battalion. Yet throughout these

attacks, Russian forces continued to

10 F O R E I G N A F FA I R S PACKAGE ILLUSTRATIONS BY BRIAN STAUFFER

a willingness to care for subordinates. have adopted. Russia’s command phi-

Federation by moving Russian forces In this second Chechen war, Russia

coordinate their efforts and allocate Ukrainian approaches to command

including hospitals and residential The momentum had already swung

answer lies in the very nature of

power itself. Leaders in positions of

ABOVE THE LAW “material breach” of the cease-fire

suits to enjoy, and a greater interest in its five permanent members—China,

Standing Committee. In theory, these consult with Russia’s other major

Left out in such accountings of power

is a crucial factor: expectations about

assessing others’ capabilities. They force when confronting a revisionist

so it felt no need to immediately There are at most a few years [for

Russia’s sphere of influence. As an has demonstrated policy competence

in Iraq and the steep rise in anti-

American sentiment in the Middle East

enthusiastically embraced is in China. Jinping has promoted, terms that

SOFT POWER IS HARD the State Department sponsoring

among the people,” Xi proclaimed in an it the second most popular destination

PRAGMATISM SELLS by the U.S. State Department, China

in regions such as Southeast Asia, NO CONTEST

diplomats often express interest in the asked Ethiopian university officials

advantage among world powers, it is not

military or economic might that makes

competitive advantage—and prevail in its drama to Moscow’s lethargic, conserva-

a strong social emphasis on learning and contribution to national vitality is

environment that allows disinformation strengths. The United States displays

Two definitions of economic power

together demonstrate its strengths and

The application of economic power is frontations, as well as to weaken the

economy. The effect of a European ban It helps, of course, when a commodity

regarding cross-border financial costs—when their competitors fail

SLIPPING THROUGH THE NET swift to glean information about these

also shunned multilateral alliances,

pulled out of international agreements,

These tensions underscore a key order as a prerequisite for maintaining

and undermining free-trade negotia- Enhancing religious tolerance and

their greater transparency, freedom of go beyond specific disparities to ad-

Can Putin Survive?

oligarchic kleptocracy. Commercial banks quickly learned ingenious

LEARNING FROM THE PAST

ernment’s economists “are holier than the Pope in applying” the