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12:01AM

Blast from my past: "Look Out, World" (2008)

 

Look Out, World

by

Thomas P.M. Barnett

Good magazine, Nov-Dec 2008.

Why Vote? Reason 177

You should vote because John McCain and Barack Obama have very different takes on the global mess they'll be inheriting—and what they'd like to do with it.

Despite all the talkabout our troubled economy, this year’s presidential race will still come down to competing visions of the post-9/11 world, and what America needs to do about it. George W. Bush leaves office stunningly unpopular, due overwhelmingly to his schizophrenic foreign policy (six years Hyde, two Jekyll). Given the strong political impetus for change, this election has always been the Democrats’ to lose.

True to form, the Dems have done their best to make it a close vote by nominating an African-American senator with limited national security credentials. But Barack Obama gave them no choice. By redefining the way campaigns are mounted in this networked age, his candidacy has produced the sort of worldwide electricity that most certainly will get him selected as Time’s “person of the year”—if he wins.

In contrast, John McCain’s candidacy has the consistency of comfort food, the underlying personal message seemingly, “I’ve waited long enough.” He is the default candidate—as in, “If you aren’t willing to risk it all on Obama, think about me.” Unlike Obama or Hillary Clinton, voting for McCain as president offers no history-making opportunity, which makes the choice of Sarah Palin as his running mate all the more politically clever.  But even with that move—bold or desperate or both—McCain remains an essentially back-to-the-future choice: a pre-boomer for a public fed up with that generation’s do-nothing politics.

Both nominees offer a strongly “realist” perspective on international affairs, with the differences stemming primarily from their generational backgrounds. McCain’s stark realism stems from the Cold War. Ronald Reagan’s personal mystique was largely a fiction of our imagination, but McCain’s legend—the good and the bad—is based on true stories of personal heroism. He lived them all. If you want someone who can recognize human evil and fight it tooth and nail, McCain’s your man.

Obama’s subtle realism emerged from a far different time: the truly tumultuous 1970s, where we first locate much of today’s globalization—energy and food shocks, Middle East conflicts, environmental awareness, global market swings, and transnational terrorism. Befitting those fractured times, Obama’s journey plays out like an ABC “Movie of the Week”: the biracial child who willed himself from a Jakarta grade school to the pinnacle of Harvard Law, landing next on the South Side of Chicago as a community activist who instinctively countered the prevailing counterculture. If you want someone who can recognize global complexity and manage it with confidence and care, Obama’s your man.

Both McCain and Obama represent quintessentially American stories, with their amazing personal trajectories obscuring the underlying political philosophies each brings to a possible administration. Pundits (and Karl Rove) would have you believe that fear alone will settle this election. But the question every voter must answer is not, “Do you fear?” but rather, “What do you fear more?”

Barack Obama will make America smarter about the outside world, and John McCain will make the world smarter about America. And on that score, there are plenty of ways to divvy up the global landscape. Here are ten criteria you can use to compare the candidates and help you break down the basic choices.

Priorities: Where’s the focus? Early last summer, Fortune asked the candidates to lay out the “gravest long-term threat to the U.S. economy.” According to the article, Obama didn’t blink: Our energy policy. McCain paused for several long seconds before answering, “Well, I would think that the absolute gravest threat is the struggle that we’re in against Islamic extremism, which can affect, if they prevail, our very existence.”

Those answers speak volumes about how each senator approaches international affairs. Obama focuses on upstream, big-picture causality (e.g. fix energy and improve everything that follows from it), while McCain gravitates toward more downstream, immediate tangibles (stop the bad guys from doing bad things). So if you want a terrorism-centric foreign policy, McCain is your guy. If you want something broader, Obama makes more sense. With McCain, you’re less likely to experience a security breakdown, but more likely to see a wider array of ongoing problems exacerbated. With Obama, you’re more likely to see more general improvement on a host of issues, but you stand a greater chance of waking up one morning to some nasty surprise. The basic question is, which spooks you more concerning America’s resilience? The perceived steady decline, or the occasional external shock?

ADVANTAGE: The American voter, because there’s a distinct choice.

Who should America seek out as strategic allies? If you think it's the French and the Germans, you need to update your global database.



Allies: How to pick ’n’ save? 
Here McCain makes a bold call, but an awful one. His proposed League of Democracies—an international alliance of democratic countries—is as close as anyone has come to mindlessly regurgitating Cold War memes. McCain additionally calls for ousting Russia from the G-8 (to be replaced by India), while leaving rising China out in the cold. Here’s why it won’t work: When you tell off both Russia and China, you kill India’s incentives to bind itself to the West. Why would New Delhi pick that fight with two huge neighbors also on the rise? If the Indians wouldn’t make that call during the Cold War, what’s the additional incentive now? Ditto for Brazil, South Africa, and a host of other rising pillars of the southern hemisphere. They’ll simply view McCain’s proposed forum as yet another arena in which the old West gets to boss them around and demand they toe its preferred line.

Here’s a big clue as to whom America should seek out as strategic allies: rising defense budgets, big standing armies, and a willingness to use them in other peoples’ (failed) states. If you think that’s the French and the Germans, you need to update your global database, because in this century, the countries with the most rapidly expanding global economic networks are the ones most incentivized to play—in the manner of the United States—globalization’s bodyguards.

The far more careful and circumspect Obama wins this round hands down. He’ll clearly bring a non-Eurocentric view to global alliances, speaking as he constantly does about the need to integrate a rising Russia, China, and India into our plans. McCain makes similar noises, but all of that is drowned out by his League of Democracies. As his response to the Russia-Georgia conflict amply demonstrated, given the right prompt, he’ll reflexively knee-jerk us into another Cold War standoff at a point when America needs to be stocking up on allies—as immature as they may be—rather than adding more enemies.

ADVANTAGE: Obama, for the sole reason that he’s smart enough not to let Georgia—on its own—declare war between NATO and Russia.

The vision thing: What to expect? You can tell a lot about each candidate’s modus operandi on foreign affairs by the campaigns they’ve built. Obama’s team of 300-or-so advisors is methodically organized, reflecting a corporate ethos that minimizes ego clashes and maximizes on-message delivery. From the experienced Clinton gang, Obama’s managed to attract the very cream of the crop, so expect a well-run State and Defense. Obama’s decision to pick Joe Biden as his running mate only strengthens that.

You should anticipate a far more conservative first term from Obama on national security than Bush’s previous eight years. Obama will seek to carefully unwind America’s tie-down in Iraq and Afghanistan so as to expand his administration’s freedom of action elsewhere, but this will take a long time. Some bad things will definitely happen in the meantime. The potential upside is substantial on restoring America’s good standing around the world.

McCain, on national security, is truly “what you see is what you get.” Despite the hovering from the neocons, McCain will be his own man and run his own foreign policy. Palin as vice president adds nothing to the senator’s well-credentialed resume. Letting McCain be McCain will be a bumpy ride for all involved: the rest of the U.S. government, the American people, our allies, and—most importantly—our enemies; but always entertaining, and full of sharp turns. If he had won it all in 2000, he would have arrived early enough in the rise of Russia, India, China, and Brazil to perhaps have had a serious opportunity to get them in line, especially on the heels of 9/11. But now, trying to ride herd these rising great powers could easily backfire if pursued angrily (remembering the man’s temper), so the downside on McCain could be profound.

ADVANTAGE: Obama, because a more conservative—dare I say, humble—American foreign policy is what the world needs now.

Heal the force:  How to repair the U.S. military after Iraq?Here’s where McCain’s unimpeachable credentials in national security and his history as a rice-bowl-breaking maverick could well serve America’s strategic needs. There will be a huge bureaucratic and political impetus to “heal the force” after Iraq, meaning rest the troops (good idea) and resume buying all the same outdated military platforms and weapons systems (a truly bad idea that will leave us as unprepared for the next Iraq as we were for the last one).

McCain is far more likely—believe it or not—to push the necessary changes through a Democratic-controlled Congress, which, in an inevitable “anything but Bush” post-election fit of pique, could easily trash all the good work so far accomplished by Secretary of Defense Robert Gates, General David Petraeus, and many others. Obama, especially since he’ll bring back all the same security players from the Clinton years (who were too deferential to the military), is more likely to pass on that fight in favor of other early possible legislative victories.

The fly in the ointment? McCain’s bevy of neocon advisors, armed with that League of Democracies notion, might just as easily try to have their cake (Cold War Leviathan force) and eat it too (continue to engage in plenty of post-9/11-style small wars). That would, indeed, look like a third Bush administration.

ADVANTAGE: Definitely the maverick McCain, but only so long as Father Time doesn’t toss the presidency—in the form of Sarah Palin—back to the neocons.

Globalization: America’s new bogeyman, or its logical cause célèbre? Despite the trade-protectionist leanings Obama put on display for the primaries, where his proposal to renegotiate NAFTA was particularly egregious, he has assembled a nice collection of Clintonian economic advisers. Plus, Obama’s more holistic approach to national security is less likely to get America trapped in useless overseas adventures and more likely to make him sensitive to the needs of emerging and developing economies. Obama will never match Clinton’s zeal, but he’s unlikely to screw up globalization’s continued advance.

McCain’s senate record indicates a fierce free-trade stance. And since a Democratic-controlled Congress could easily engage in all manner of trade protectionism, especially vis-à-vis China and recently re-demonized Russia, having a Republican in the White House makes a lot of sense if you don’t like that sort of thing. The problem would be—again—McCain’s penchant to pick unnecessary fights with globalization’s rising economic pillars, too few of which will qualify for his democracies-only club.

Then there’s the larger reality that globalization faces a populist headwind that is likely to pick up dramatically in coming years. A stubborn McCain, as correct as his economic instincts may be, could easily find his politics out of synch with global trends, resulting in stalemated trade negotiations overseas and deadlocked legislation back home.

ADVANTAGE: Obama, because he’ll guarantee half-a-loaf outcomes on most issues and could spark the necessary shift to progressivism that globalization desperately needs.

Letting McCain be McCain will be a bumpy ride for all involved: the rest of the U.S. government, the American people, our allies, and—most importantly—our enemies.


Climate change: The end of the world as we know it? Climate change is becoming a dominant global narrative, one that indirectly challenges globalization’s advance by casting doubt on whether developing nations can emerge as the West once did. The brutal truth is they can’t, but not simply due to climate change. There are a host of more immediate reasons (air pollution, supply constraints) that speak to humanity’s need to move beyond oil and any number of self-limiting industrial-age technologies. Because America remains the world’s single biggest national market (meaning we control a lot of demand), we must either lead or eventually get out of China and India’s way.

Both Obama and McCain seem to understand the larger competitive challenge framed by global warming, which isn’t surprising because both are problem-solvers at heart. Given today’s political landscape, both are selling the chimera of national energy independence (a dubious economic goal), linking it to job creation in the high-tech “green” sector. Usually, it’s safer to go with the Republican candidate when it comes to promoting entrepreneurs and innovation, so a slight edge to McCain on that score. But since any response to climate change will entail some serious cooperation with emerging economies on their infrastructure development, and with vulnerable developing economies on the aid-related subjects of food security and disease control, Obama’s “dignity” agenda tops McCain’s focus on demanding democracy.

ADVANTAGE: Push. Let’s stipulate that both candidates will move the ball forward significantly.

Iraq: When do we wrap up? The Iraq “war,” or whatever you want to call it, is clearly a moving target, meaning where Iraq was at the beginning of these campaigns—when positions were initially articulated—and where it is today, are two vastly different things. The criticism now focuses primarily on the high cost involved.

McCain gets credit for advocating the surge and the associated counterinsurgency strategy, two much-needed changes on which the Bush administration wasted many months—and lives—before adopting. Basic lesson? When McCain makes a decision, he follows it through to the end, eagerly seeking out new solutions to persistent problems.

But for those who objected to the war, Obama also gets credit for opposing the invasion from the start. As for opposing the surge, Obama now appears less flexible than McCain in admitting his party’s past mistakes and moving on to better solutions.

In political terms, the problem McCain faces is that improvements in Iraq favor all the positions Obama has long advocated. So again, we see the essential difference emerge. McCain’s approach has the value of concentrated effort, but suffers the dynamic of “one damn thing after another,” meaning: Just after you fix one thing, you’re on to the next. Obama is less likely to suffer big losses in any single situation, but he’s also less likely to score any big wins.

As for wrapping up America’s combat involvement in Iraq, the differences between the two candidates have narrowed dramatically: Obama calls for a withdrawal of combat troops by 2010, while McCain targets 2012. The major difference concerns the pace of withdrawal: Obama says the Iraqi government should decide; McCain says our generals should decide. In reality, it’ll be our generals right up to the point when the Iraqis decide for themselves. This “war” stopped being America’s to “win” or “end” a long time ago—to wit, Iraq’s government wants us gone by 2011.

ADVANTAGE: Obviously McCain, because of his courageous call on the surge.

Afghanistan and Pakistan: How do we ramp up?
 Obama has made some hawkish statements about taking the fight against al Qaeda and the Taliban directly into Pakistan. Much like McCain’s tough talk regarding Iran’s involvement in Iraq, such statements should be taken with a grain of salt. Pakistan, like Iran, is a far bigger and more potent entity than its troubled neighbor, and possesses considerable leverage on its own. With Pervez Musharraf gone from power, expect even more autonomy from an Islamabad intent on showing it’s no U.S. puppet.

When George W. Bush redirected the war on terror in 2003 from Afghanistan to Iraq, that was a radical move. Today’s radical move would involve rapidly re-directing U.S. military efforts back toward Afghanistan, thus accelerating Iraq’s movement toward policing its territory and handling its neighbors largely on its own. In asserting that Iraq will remain the central issue for the next president, McCain actually stakes out the more conservative position here, whereas Obama now advocates a more aggressive line.

Odds are good that Afghanistan will once again become the central front in the war on terror early in the next president’s term, and that some modest troop surge will accompany a revamped counterinsurgency strategy that takes on many of the same characteristics of what worked in Iraq.

Attempts by the competing campaigns to portray either Iraq or Afghanistan as the “good war” are largely rhetorical at this point. Events on the ground appear to be driving this re-direct in operational focus, and both candidates advocate the same basic ramp-up in U.S. capabilities and resources.

ADVANTAGE: McCain, because you have to go with experience on this potential quagmire.

Obama will seek to carefully unwind America's tie-down in Iraq and Afghanistan so as to expand his administration's freedom of action elsewhere, but this will take a long time.


Iran: How far do we go? Here McCain advocates a hard line strikingly evocative of George Bush’s rationale for invading Iraq: prevent a regime that sponsors transnational terrorism from achieving weapons of mass destruction. Obama, in contrast, advocates a more direct diplomatic approach aimed at revamping U.S.-Iranian relations as a whole. How you judge the validity of their approaches depends on your perception of the threat.

If you trust the long and varied history of strategic nuclear deterrence, then you’re probably of the opinion that the Shia bomb (Iran) won’t be any more usable than the Jewish (Israel), Sunni (Pakistan), Hindu (Indian), Confucian (Chinese), or Christian (the rest) bombs, especially since Israel very likely possesses at least 200 deliverable nuclear warheads. And if you’re familiar with the history of nuclear proliferation, you’ll know that declared nuclear powers tend to be extremely careful with the technology, whereas undeclared powers (e.g., Pakistan, North Korea, Israel, South Africa) have been known to share. So the real question is, Do you think Tehran is crazy enough to give either Hezbollah or Hamas a nuke? And if there’s even a scintilla of chance there, should America pre-emptively strike, or instead aggressively seek some détente with Iran?  In other words, is it time for Dr. Strangelove to step up, or should “Nixon” finally go to Tehran?

Iran, of course, complicates the matter by in effect saying, “You know we’ve already got the ‘guns’ [i.e. missiles] and are cranking out ‘gunpowder’ [i.e. uranium], but since we’re not manufacturing any ‘bullets’ [i.e. warheads], you can’t actually prove anything—or ever be quite sure how close we’ve come to putting it all together.” Couple that stance with Ahmadinejad’s frequent verbal threats concerning Israel’s right to exist and there are plenty of grounds for both McCain’s calculated threats and Obama’s calculated engagement.

But if a conventional bombing campaign could assuredly take out Iran’s nuclear facilities, chances are the Bush administration would have pulled that trigger by now; and if not the Bush administration, then certainly Israel. If neither could see its way to launching a strike by the end of the Bush administration’s second term, then it’s highly unlikely that such a campaign—absent full-out invasion and occupation—will ever make sense. In short, we’d have to go nuclear to stop Tehran from getting nuclear.

If that strategic logic and historical record ring true to you, then you definitely want Obama in the White House, because McCain could well launch us into a war with Iran. If you consider that pathway inevitable, then McCain’s the better choice, along with a strategic missile defense that—despite all the failures up to now—finally works as promised.

ADVANTAGE: Push. Totally depends on your worldview, unless you’re committed to granting Israel a zero deductible on America’s nuclear umbrella insurance policy.

The war on terror: Remember that? It must seem odd that, seven years into this war on terror, al Qaeda itself seems like such a strategic afterthought. Part of this is due to the Bush administration’s real success in disrupting al Qaeda’s global networks.

But it’s also due to al Qaeda choosing to become less operationally focused and evolving into more of a worldwide anti-American/Western branding mechanism—sort of a Jihadis-R-Us. Sad to say, this is probably as close to “victory” as we’ll come for the foreseeable future because, cynically speaking, transnational terrorists are a useful bogeyman for a networked age.

As somebody who’s worked in national security affairs for close to two decades, I’ll tell you that as far as anti-terrorism and counter-terrorism are concerned, it won’t matter much who gets elected president. The U.S. government possessed such a security community prior to 9/11, and that community got a whole lot bigger after 9/11. Today, that community operates like any sizeable and widely distributed bureaucracy: just well enough not to fail spectacularly, but nowhere near well enough to succeed spectacularly.

So in regards to the candidates, frankly, it’s a coin toss. Obama would present a more conciliatory face, which can invite more aggression or subdue it. McCain would present a less compromising face, which can accomplish the same. Both will promise and likely achieve somewhat more secure borders, and any new management might inject the Department of Homeland Security with more purpose and better execution, but expect the world to continue appearing more dangerous over time (God bless our sensational media) while actually becoming more secure. And if it makes you feel any better, just go on believing that Washington really runs America and that America really runs the world.

ADVANTAGE: Draw. This leaves the final count tied at 3 apiece, with 4 toss-ups. Expect another tantalizingly close vote.

12:01AM

Blast from my past: "The Rise of the Global Middle Class" (2009)

The Rise of the Global Middle Class

by

Thomas P.M. Barnett

Good magazine (Jan/Feb 2009), pp. 90-91.


 

America has had the biggest demand in the global economy for so long that we can’t remember what it was like when that wasn’t the case. But that’s all about to change.


I’ll let you in on a little secret about globalization: It is demand that determines power, not supply. Consumption is king; everybody else serves at will. So it ain’t about who’s got the biggest military complex but who’s got the biggest middle class. Everybody’s got the dream. What matters is who can pay for it.

For as long as we can remember, that’s been America—the consumer around which the entire global economy revolved. What’s it like to be the global demand center? The world revolves around your needs, your desires, and your ambitions. Your favorite stories become the world’s most popular entertainment. Your fears become the dominant political issues. You are the E. F. Hutton of consumption: When you talk, everybody listens. That was the role the Boomers played for decades in America and—by extension—around the world through their unprecedented purchasing power. But that dominance is nearing an end.

In coming decades, it won’t belong to Americans, but to Asians. So say hello to your new master, corporate America: Mr. and Mrs. M. C. Chindia.

The rise of the Asian middle class, a binary system centered in China and India, alters the very gravity of the global economy. The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw. Achieving middle-class status means shifting from needs to wants, so Asia’s rise means that Asia’s wants will determine our planet’s future—perhaps its very survival. And as any environmentalist with a calculator knows, it isn’t possible for China and India to replicate the West’s consumption model, so however this plays out, the world must learn to live with their translation of the American dream.

As for the new middle class’s relative size, think bread truck, not breadbasket: Over the next couple of decades, the percent of the world’s population that can be considered middle class, judging by purchasing power, will almost double, from just over a quarter of the population to more like half. The bulk of this increase will occur in China and India, where the percentage shifts will be similar. So if we round off China and India today as having 2.5 billion people, then their middle class will jump in numerical size from being roughly equivalent to the population of North America or the European Union to being their combined total.

The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw.

No, it won’t be your father’s middle class—not at first. Much of that Asian wave now crests at a household income level that most Americans would associate with the working poor, but it will grow into solid middle-class status over the coming years through urbanization and job migration from manufacturing to services. And for global companies that thrive on selling to the middle class, this is already where all the sales growth is occurring, and it’s only going to get bigger. As far as global business is concerned, there is no sweeter spot than an emerging demand center, because we’re talking about an entire generation in need of branding—more than 500 million teenagers looking to forge consumer identities.

There are also essentially two unknowable wild cards associated with the rise of China’s and India’s middle classes: First, how can they achieve an acceptable standard of living without replicating the West’s resource-wasteful version? And second, what would happen if that middle-class lifestyle was suddenly threatened or even reversed? The planet must have an answer to the first question, even as it hopes to avoid ever addressing the second. Here’s where those two fears may converge: As their income rises, their diets change. Not just taking in more food, but far more resource-intensive food, like dairy and meat. Right now, China imports vast amounts of food and India is just barely self-sufficient in the all-important grains category. Both are likely to suffer losses in agricultural production in coming years and decades, thanks to global warming, just as internal demand balloons with that middle class. Meanwhile, roughly one-third of world’s advanced-lifestyle afflictions—like diabetes or cancer—will be found in China and India by 2030. Toss in the fact that much of the population lives along the low-lying coasts, and our notional middle-class couple could eventually cast the deciding global votes on the issue of whether or not global warming is worth addressing aggressively.

Whoever captures the middle-class flag in coming years will have to possess the soft power necessary to shape globalization’s soul in this century, because humanity’s very survival depends on our generation’s ability to channel today’s rising social anger into a lengthy period of social reform. This era’s global capitalism must first be shamed (populism) and then tamed (progressivism), just as America’s rapacious version was more than a century ago. Today’s global financial crisis simply marks the opening bell in a worldwide fight that is destined to go many rounds.

 

12:01AM

Blast from my past: "Ten Reasons Why China Matters to You" (2008)

 

 

Ten Reasons Why China Matters to You

 

by Thomas P.M. Barnett

 

GOOD magazine, May/June 2008, pp. 58-65

 

 

Don’t be scared of China—the country is perfectly positioned to be our most powerful ally (lack of democracy notwithstanding, of course). But if there is anything to worry about, it’s not China’s massive military; it’s the economy, stupid.

Why China Matters To You:


10.

Because Nixon went to China and your world was born.

 

When President Richard Nixon reopened diplomatic ties with Mao Zedong's communist China in 1972, he enabled the most profound global economic dynamic of the last half century: China's historic reemergence as a worldwide market force. Nothing shapes your world today more than China's rise, and nothing will shape our planet's future more--for good or ill--than China's ongoing trajectory.


After centuries of relative isolation, China’s rapid reintegration into the global economy transformed globalization from its narrow Cold War-era base (the West) to its current “majority” status, whereby two-thirds of humanity now enjoys deep and growing connectivity with international markets and the remaining third works toward it. China’s decision to rejoin the world was globalization’s tipping point, meaning—absent global war—there’s no turning back now, only adaptation.


If Nixon opened the door, then Mao’s successor Deng Xiaoping led the Chinese people through it. Unlike Mikhail Gorbachev, Deng chose wisely: By tackling economic freedom before political liberalization, Deng kept China stable during its tenuous first years of market reform. Although Deng is correctly labeled an autocrat (he ordered the bloody suppression of the Tiananmen Square democracy protests in 1989), he is also correctly identified as a modernizer who unleashed a generation’s immense creativity.

Many from that generation will tell you that, before Tiananmen, they felt freedom was “90 percent political and 10 percent economic,” but after Deng’s crackdown, they concluded—somewhat harshly—that real freedom was “90 percent economic and 10 percent political.” In other words, they decided that markets were the first, best instruments for generating positive change in China.

A grand bargain was struck: Deng won military support for further market reforms so long as a lid was kept on political change, and the army was afforded enough of a budget to modernize. The Party would remain supreme, but state involvement in the economy would shrink and private business would be encouraged along with investment from, and trade with, the outside world.

China has experienced incredible economic growth ever since, increasing its gross domestic product annually by almost 10 percent—as fast as you dare expand. But China is also nowhere near becoming a democracy, and its achievement scares nations around the world—and excites others—because it suggests that you can rapidly embrace globalization, achieve great income growth, and remain a single-party state by following the so-called China model.


9.

Because China may be an ancient civilization, but it's a young society that's growing up very quickly--and unevenly.

 

China's modernization strategy included slowing population growth through the “one-child policy.” Yet China remains huge: 1.3 billion souls crammed into a country no larger than our own. So if you think we’ve added quite a few Hispanics in the last couple of decades, imagine inviting everyone in the Western Hemisphere and half of Africa to come live inside the United States, because that would give us China’s crowded mix of rich and poor.

Given China’s traditions, the one-child policy favors males over females; the latter are too often aborted or offered up for international adoption. (Disclosure: My fourth child originally hailed from Jiangxi province.) The build-up of males has led some Western demographers to worry that over time, China will inevitably become militarily aggressive—how else to distract all those frustrated young men? But this fear is overblown, as is evidenced by trends in the rest of Asia, where, for example, similarly frustrated South Korean males simply go abroad and, you know, marry a broad in places like Vietnam or Thailand. Bottom line? Desire wins out.


The more profound legacy of the one-child policy is that China will grow very old, very fast. Right now the country enjoys a demographic sweet spot: plenty of workers supporting relatively few children or elders. But once you restrict the baby supply, the population as a whole moves up collectively in age, meaning that China will rapidly progress toward the “Florida mark” (20 percent of the population above age 65) in just two decades. The United States will hit Florida around the same time. If America, in all its wealth, is struggling with that profound shift, how much harder do you think it will be for China, weighed down by hundreds of millions of impoverished peasants?

Here’s one thing to remember when anyone tries to sell you on China running the world someday soon: that China will get very old before it gets truly rich, something the world has never witnessed before. What history tells us is this: Aging populations are not aggressive populations.


8.

Because China's transformation echoes much of America's past: not only the good, but plenty of the bad, and the ugly too.

 

Impossible, you say. Ruled by communists, China’s civilization bears no resemblance to our own.

But China’s true “communist” period was just three decades out of a 5,000-year history, the rest of which featured a social bent toward markets in general (the Chinese are inveterate gamblers, for example) and past periods of serious global trade connectivity (recall the Silk Road of yore). Add in the strong focus on family ties and a deep spiritual history that has long featured free competition among various faiths and we’re not exactly talking about some brother from another planet.

So forget trying to figure out today’s China through its own history, an endless cycle of disintegrating peace and integrating war. Think about it this way: Right now, China is somewhere in the historical vicinity of “rising America” circa 1880—absent democracy, of course. Once you realize that, then depending on where you go around China, you can locate yourself somewhere in the last 125 years of America’s own ascendancy.

Some examples: Foreign policy-wise, you’re looking at a mild-mannered Teddy Roosevelt: China’s military stick is getting bigger, but it still prefers to speak softly, mostly threatening small island nations (read: Taiwan) off its coast.

The nation is likewise undergoing a construction and investment boom that’s right out of 1920s America, and frankly, that should give pause to anyone concerned with global economic stability. China’s banking and financial industries are about as regulated as ours were prior to the Great Crash of 1929. But there’s no sign of a slowdown. Shanghai already has 4,000 skyscrapers—twice as many as New York—and plans another thousand.

Check out China’s space program, which just put its first man in orbit. Beijing now speaks openly of repeating our 1960s quest for the moon. Groovy! Let me just raise my glass of Tang in salute and wonder why Americans aren’t on Mars yet. Speaking of which, there’s also a sexual revolution brewing, with China’s urban youth taking one great leap forward from Father Knows Best to Sex and the City. This revolution won’t be televised, but it’s being compulsively blogged.

Corruption-wise, Beijing remains stuck somewhere prior to the Progressive Era of late-19th-century America, and that’s no good. China’s political system needs to be able to process all this social and economic pressure with more flexibility. Citizens are simply growing angrier and more demanding with each passing year. China’s legal system also needs to clean up its act, because the more China’s economy opens up, the more the global business community is going to demand greater transparency and better avenues for legal redress. Corruption already consumes upwards of 5 percent of China’s gross domestic product. In a “flat world” of economic hypercompetitiveness, such inefficiency eventually costs too much.


7.

Because China's rapid and deep integration into manufacturing means that Chinese products permeate your life--at some risk.

 

Globalization tends to integrate trade by disintegrating global supply chains. By breaking up these chains, globalization spreads various segments of production and assembly across those economies that offer the cheapest labor for each particular stage. China has deftly inserted itself into a long list of these chains, becoming the final assembler of note in toys, cell phones, CD players, computers, and auto parts, to name but a few. By doing so, China has consolidated much of Asia’s previous trade surpluses with America into its own burgeoning bilateral trade with the United States. So when you hear about America’s huge trade deficit with China, bear in mind that it’s the same huge trade deficit we’ve long had with Asia as a whole.

 

Also be aware that this figure hides a lot of complexity. Foreign corporations control the majority (approximately two-thirds) of this production for export. American companies in particular dominate China’s U.S.-export sector, meaning it’s basically our companies renting Chinese labor and keeping much of the profit. The Chinese export that sells for hundreds of dollars in America nets only tens of dollars for the Chinese economy. That’s how Wal-Mart, the single biggest source for Chinese exports in the world, keeps its prices so low. So if you think Western companies are exploiting cheap Chinese labor, then understand that you’re a prime beneficiary.


Naturally, China’s deep penetration of the U.S. market has raised product-safety issues. Any economy that is growing as fast as China’s cuts plenty of corners. But realize that China learns by scandals just as America did over the past century. Frankly, the best crises are the ones you actually hear about, because that means the international press got ahold of them, and those already affected or at risk will get the information they need to protect themselves. Once tracked back to China, Beijing is put on public notice that whatever laxness exists simply cannot be tolerated anymore, with threats of quarantine, bans on exports, cessation of investment flows, and so on.

A generation ago, such threats would elicit yawns from China’s ruling elite, but now, with the Communist Party’s legitimacy riding on economic expansion, they’re taken with the utmost seriousness. In short, China’s government is starting to act more like a business which recognizes that its reputation is often its most important asset, because fierce competition means that today’s mistake allows somebody else to steal your customers by the start of business tomorrow.


6.

Because China's demand for resources is altering global markets in ways both profound and perverse.

 

China’s explosive economic growth forces it to suck in resources from all over the world. As James Kynge, a longtime China-watcher, notes in his recent book China Shakes the World, “China’s endowments are deeply lopsided.” Blessed with too many people, China is short on just about everything else: arable land, water, energy, and raw materials of all sorts. Thus, the only way China manages to serve as globalization’s “manufacturing floor” is to become a leading global importer of virtually any commodity you can name, from cement and copper to oil and gas.


While there’s hardly anything wrong about that, China’s insatiable demand for resources likewise drives Beijing to actively court pariah states and “rogue regimes” while the West tries to isolate the same regimes with economic sanctions. Take China’s relationship with Iran: While American diplomats work night and day to level even harsher sanctions to slow down Tehran’s reach for the bomb, China quietly edges out Japan as Iran’s major energy investor, sweetening the deal by reselling it some of that fabulous high-tech military hardware the Chinese military imports from Israel—hardware which then turns up in southern Lebanon in the hands of Hezbollah.

On the face of it, that constitutes obstructionism on China’s part, as if it’s trying to prevent the global community from cracking down on bad behavior. But the inescapable truth is that China’s scramble to find resources means it has to cut deals with anybody, no matter their disreputable record. So while Sudan’s government engages in what many Western states consider to be “ethnic cleansing” or genocide in its Darfur region, China is more than happy to invest heavily in Sudan’s oil industry while supplying the Sudanese government with weapons. Do that long enough and you’ll have Hollywood stars galore decrying your hoped-for coming-out party as the “genocide Olympics.”

But the longer-term danger is this: China is getting awfully dependent on a lot of unstable countries without having the global military footprint of a great power—you know, like somebody building a very large house made of straw, nowhere near a fire station. When bad things happen—like, say, that one afternoon nine Chinese oil-rig workers were killed by rebels in eastern Ethiopia—China can’t respond like a military power you should fear, because it needs that oil. Once that reality sinks in with local bad actors, expect them to start squeezing Beijing for their own slice of protection money. You know that Thomas Friedman bit about America funding both sides of the “war on terror”? Well, this is how that sort of thing starts.

Today, China might get by simply by buying off every dictator it can. But that won’t work in a future world defined by hyperconnectivity, where everyone can witness the human implications of China’s deal-making. Nor will it work in a future world defined by hyperinterdependency, a world China is creating—whether it realizes it or not.


5.

Because the panda "huggers" versus "sluggers" debate is a lot of hot air--until Washington scares Beijing into raising your mortgage interest rate five points overnight.


I’m considered a “panda hugger,” someone who rationalizes China’s current lack of democracy and argues that, despite all its selfish behavior, China should be considered by America more as a potential ally than a downstream threat. Being an economic determinist (I taught Marxism at Harvard in another life), I believe economics shapes politics more than the other way around. Thus, I tend to be patient when I see an autocratic regime marketizing its economy, especially when the economy opens up to globalization’s networks.

So when I draw up a list of regimes I’d like to see forcibly changed by the global community, China’s nowhere near the “to do” range. That doesn’t mean I want Washington to forgo pushing Beijing’s leaders in the direction of increasing political freedom and transparency, it just means that I have more faith in the transformative power of markets than others do, so I don’t argue for picking fights with China on that score when I think there are so many other, more urgent situations around the planet today that we could collectively address.

“Panda sluggers” refers to those politicians, writers, and activists who make just the opposite argument: China has had plenty of time to change politically in a manner commensurate with its embrace of markets and globalization. If Beijing’s ruling elite has managed to keep such a firm grip on political power, then maybe it’s really cracked the code on “authoritarian capitalism,” meaning we’re looking at an inherently antagonistic model of development. If so, America had better wake up to that reality and start combating China’s “soft power” influence-peddling around the world.

This view dovetails with trade protectionists who say that Washington must confront Beijing over its unfair trade practices and defense hawks who say similar things over China’s rising military spending. My counterargument? When America was a rising power around the beginning of the last century, we were highly protectionist. Now that we’re advanced, we’d like everybody else to follow our example. Fair? All things being equal, yes. But all things aren’t equal when you’re trying to catch up, the way China is today. I say, if you talk them into becoming capitalists, then you have to live with the consequences and be patient.

What concerns me most about this ongoing debate is the potential for the perfect triggering crisis to come along and decisively shift public opinion in favor of the “slugger” position, launching America down some path of economic retaliation against and/or military confrontation with China. Obvious security situations spring to mind, such as North Korea’s nuclear program, Iran’s nuclear program, or some significant U.S. military intervention in Pakistan—a longtime strategic ally of China.

But a more likely trigger is an extended economic downturn in the United States, or a financial panic in China following the bursting of some stock market bubble. If seriously threatened, might China decide to divest itself of U.S. currency—China currently holds $1.4 trillion in U.S. dollar reserves—sending the value of the dollar into a tailspin? No one knows for sure, but intelligent observers realize that, as former treasury secretary Lawrence Summers has put it, there basically exists a financial “balance of terror” between our two economies, meaning that when either of us pulls the economic trigger, we may well both end up with fatal wounds.


4.

Because as China builds out its infrastructure, it can set a good or a bad example to developing economies struggling to deal with fragile environments.

 

American businesses face a key decision: dive into China’s dynamic markets or risk missing out on their coming wave of innovation. Nowhere is this more true than in infrastructure development, which is expanding like gangbusters in China right now and will continue to do so for the next couple of decades. Good example: China is building freeways like crazy. In about 20 years, it’ll have roughly 50,000 miles of them—the equivalent of our interstate system.


In that time, the world will spend $10 trillion for infrastructure development in energy ($6 trillion) and water ($4 trillion). Most will happen inside China and India at a pace not witnessed on this planet since America spread its network westward following our Civil War. Naturally, environmentalists are worried. If China replicates our resource-intensive style of growth throughout its economy, there will be no end to its pollution and carbon emissions. If you’ve spent any time in China, you know what I’m talking about: acrid-tasting air that the U.N. estimates is responsible for the premature death of 400,000 Chinese a year. Now add in the four times as many cars and trucks that will be on Chinese roads in 20 years’ time, along with far more urbanization and industrialization, and tell me if that sounds sustainable.

But guess what? The Chinese themselves aren’t exactly clueless on the subject. After all, they live there. So I’m betting—and I admit this is a bet—that the Chinese, along with the Indians and emerging markets elsewhere, will be smarter than that. Not because they want to be, but because they’re forced to be. These rising economies will have to zig where we zagged, and how they zig will be important, not just for the “advanced” West, but for all those emerging markets to come in places like Africa.


3.

Because China is globalization's general contractor: always happy to take the job and your money, but hard to get on the phone once you discover problems.

 

Globalization now impinges on the most traditional, off-the-grid societies in the world. Not surprisingly, there’s going to be plenty of cultural blowback triggered by that process, and some of it is going to come our way in the form of transnational terrorism—just as it did on 9/11.


For America to win a long war against radical extremism, we need to make globalization truly global by integrating the one-third of humanity whose noses remain pressed to the glass, wondering when they’ll be let in to the party. That’s labor-intensive, and American workers price out far too high. Yes, we must be significantly involved, but it’s not going to be Americans—much less Europeans—who do the heavy lifting. No, it’s going to be those longtime frontier laborers of the global economy—the Chinese and other Asians. The highly networked Chinese have shown up like clockwork at every frontier globalization has ever created. Currently, more than a million Chinese nationals have turned up in Africa alone, engaging in what I call preemptive nation-building. It’s great that China has triggered a commodities boom over much of Africa. God knows those economies can use all the help they can get. But the longer it looks like China is just there for the raw materials, the more Africans are going to catch on to the fact that—for now—the Chinese aren’t doing any more for the continent’s long-term development than the European colonial powers did decades ago.

But China needs our help, too. As the Chinese become increasingly dependent on resources drawn from unstable regions—by 2020, roughly 70 percent of China’s oil imports will be from the Middle East—the country must continue leveraging U.S. military power. Otherwise, it’ll be left unduly subsidizing weak or corrupt regimes, with China’s economic connectivity put at risk by local warlords, chronic insurgencies, and radical extremists bent on driving out globalization’s networks. If America can’t afford to maintain global security on its own, and China can’t afford to replace our effort on its own, then a strategic alliance makes eminent sense.


2.

Because China will not be our biggest future enemy but our most important ally.

 

A significant portion of our national-security establishment wants desperately to cast China as an inevitable long-term threat. Why? Part of it is simply habit, as most who argue this line spent the bulk of their professional lives in the Cold War and just can’t imagine a world that doesn’t feature a superpower rivalry. For those who need to fill that hole, China is the best show in town, because its military buildup allows these hawks to argue that America must buy and maintain a huge, high-tech military force for potential large-scale war with the Chinese.


My counter is this: China’s military buildup is not historically odd. America did the same as it became a global economic power in the late decades of the 19th century. Remember Teddy Roosevelt and the Great White Fleet? It’s the same logic we see with China today.

But won't events put China and the United States at odds—say, over the strategic issues of fostering stability in the Persian Gulf? Hardly. Right now the United States imports only about one-tenth of the Persian Gulf’s oil exports, with the vast bulk heading east to Asia. Frankly, there’s no sense in the strategic equation “American blood (spilled) for Chinese oil (imports secured).” As China’s oil imports skyrocket in coming years, unlike ours, do you think that’s a politically sustainable situation?

My larger, more long-term fear is that by keeping China our preferred threat, we deny ourselves access to its significant military manpower and growing budget. With Europe and Japan both aging dramatically and China’s strategic interests ballooning in unstable regions, this makes no sense. Better to lock in China as soon as possible as the land-power anchor of an East-Asian version of NATO. The sooner we achieve that, along with Korea’s reunification, the sooner we can draw down our military in the region and better employ it in hotter spots around the world, eventually with Chinese (and Indian) troops helping out.

What would a strategic alliance with China look like? It won’t come as some “grand bargain” achieved in a single summit, but rather a long-term buildup of trust through coalition operations. Asia is an obvious focal point for such cooperation, but a complex one. Far better in the short run would be to create a strategic dialogue between the Pentagon’s nascent Africa Command and the Chinese military regarding joint peacekeeping and humanitarian operations in Africa. By focusing on that relatively clean slate, America and China could come together to explore what our military alliance could ultimately entail.


1.

Because we're less than five years from a new generation of Chinese leaders with whom a far stronger relationship may well be built.

 

China is on the verge of a generational leadership change that will profoundly shape its emergence as a global power over the next decade. America should take advantage of this new group’s eagerness to play an actively constructive role in international affairs.

To make clear how this would work, here’s a quick primer on the generations of Chinese leaders since 1949: Mao personified the first generation, Deng the second. Deng was followed by a third generation fronted by Jiang Zemin, China’s president and party boss across the 1990s. What’s important to note about the third generation is that this cohort was largely educated in the Soviet Union during the 1950s. The technocratic flavor of that formative experience emboldened these leaders to extend Deng’s economic reforms far deeper into Chinese society, even as the leaders steadfastly refused political liberalization.

That brings us to the current, or fourth, generation of leaders, represented by President Hu Jintao and Premier Wen Jiabao, a risk-avoiding pair who have been quietly at the helm of “peacefully rising” China since 2002. Internally, their focus has been on harmonizing the huge imbalance between the booming coastal provinces and the left-behind rural poor of the interior.

Since 9/11, China has been almost invisible in international security affairs, essentially free riding on America’s vigorous prosecution of both radical Islam’s global insurgency and the so-called Axis of Evil, despite being a potentially key player. After all, China has long stood as North Korea’s patron and now emerges as a dynamic investor for energy and raw-materials providers throughout the Middle East and Africa.

But understand this: China’s fourth-generation leaders did not travel abroad in the 1960s for their college education, trapped as they were by the Cultural Revolution. So it’s hardly a surprise that these homebodies have proven reticent to step out internationally. But that’s changing as China’s fifth-generation leaders-in-waiting step into senior positions of power. Starting in the late 1970s, many of them were educated right here in the United States—the birthplace of today’s market-driven globalization. All but penciled in for future top slots last fall at the Communist Party’s supreme gathering, this group has already begun its years-long transition to rule, slated to begin officially in 2012. Increasingly, China’s next leadership generation speaks openly of the nation’s achievement of great power status.

How America engages China’s emerging elite in coming years could well determine—for good or ill—the lasting contours of the most important bilateral relationship of the 21st century. The scariest aspect to this relationship right now is that America’s economic interdependency with China vastly outweighs the two nations’ political and, more important, military connectivity. Bind America and China together, and globalization cannot be derailed. But set them persistently at odds, and that’s a recipe for unacceptable danger.