In “Waving Goodbye to Hegemony,” Parag Khanna, a senior research fellow in the American Strategy Program of the New America Foundation, has authored a provocative analysis of international security challenges awaiting the next administration and the US as the new century unfolds. Instead of an ascendant PRC, global Islamic extremism, or a Westphalian state system in decline, Khanna discusses the coming parity of the US, the European Union, and the PRC and the likely competition for confederates around the world. In Khanna’s words, the three poles are the “ultimate ‘Frenemies,’” where each nation dominates its hemisphere, but cannot deter the other two from meddling. The competition among the three is fiercest in the “second world,” a cross-section of countries offering both enormous opportunity and risk whether it is investments, security, or critical support on multilateral matters. The second world is replete with “swing states,” such as Russia, Saudi Arabia, Brazil, or South Africa, whose fickle affections could alternatively provide or withhold critical support at crucial junctures. Instead of a single United Kingdom balancing against Continental rivals, declaring “no permanent friends or allies… only permanent interests,” the world will endure three global powers endlessly maneuvering against each other with swing states constantly courting and rejecting each against the others. A robust challenge for any strategist, the tri-polar competition would humble the most gifted modern Bismarck and induce permanent paranoia right out of George Orwell’s 1984, a similarity Khanna readily recognizes. Khanna acknowledges the metrics usually cited by American triumphalists – the world’s largest economy and most powerful military – but he breathlessly declares we are witnessing history’s first “global, multi-civilizational, multipolar battle.”
Or maybe we're not.
Such a sweeping assertion merits examination and upon close examination Khanna’s assertion lacks consistency and depth. In particular, Khanna emphasizes the fluidity with which swing states can navigate in today’s global political economy, variously establishing linkages with either the US, Europe, or China. Khanna pointedly declares “globalization is the weapon of choice.” However, in discussing his methodology (two years of travel through 40 countries, an approach to be lauded), Khanna states he has “learned to see countries not as unified wholes but rather as having multiple, often disconnected, parts, some of which were on a path to rise into the first world while other, often larger, parts might remain in the third.”*
Despite this discovery, Khanna persists in defining the global system as purely state-centric. Khanna continuously depicts the competition in terms befitting 19th Europe rather than multi-dimensional challenge grandly described at the outset. Indeed, in his various descriptions of premiere swing states, Khanna repeatedly returns to the sub-state entities and body publics pushing and pulling the country in various directions, but does not count the content of the regime as an indicator of its likely course.
Khanna identifies how the swing states are navigating the current environment to their advantage, but fails to note the successes are tactical and not strategic, principally because the current leadership in each state is captive to multiple competitive interests within their own country. Russia’s Putin is hailed as Russia’s savior but he cannot undertake the necessary steps to truly empower the economy without upending the delicate balance of factions within the Kremlin oligarchy. Iran’s Ahmadinejad is the stark face of Iranian nuclear nationalism, but dissatisfied hard-line theocrats and pragmatic business types both freely act at odds with his administration. Considerable insights can be made via systemic and state-centric conceptions of international affairs, but in an increasingly globalized world, sub-state and non-state entities must be factored. Khanna admits he “wondered whether globalization would accelerate these nations’ becoming ever more fragmented, or if governments would step up to establish central control.” Khanna comments “it was necessary to assess each country from the inside out,” but never shares what he concluded.
Furthermore, Khanna’s description of a second world in play closely mirrors the contours laid out by Dr. Thomas Barnett, formerly of DOD’s Office of Force Transformation. Substitute “second world” with “new core” and the discussion of new diplomatic-military realities with the emphasis on changing rule-sets and a reader will think he’s reading a knockoff of Barnett’s book, The Pentagon’s New Map. However, Barnett identifies how the US can modify national security organizations and foreign policies to capitalize on opportunities availing themselves in the near- to mid-term. Instead of predicting US difficulties in a heated competition in the second world, Barnett constructively discusses how the US can lead the Old Core to collaborate with the New Core in “closing the gap,” the geographic areas presently disconnected from the global economy and, by no small coincidence, the locus of instability in the world. In the subsequent book, Blueprint for Action, Barnett provides a set of substantial agency reforms and policy prescriptions the US can undertake to address these challenges, far more extensively than Khanna’s call for “channeling JFK” or “Pentagonizing the State Department.” (Dr. Barnett has declined to comment on Khanna’s article on his blog, as he will be reviewing Khanna’s book in an upcoming issue of National Review.)
Europe as a Superpower… Seriously?
For this author, the key defect in Khanna’s analysis is his depiction of a robust European superstate emerging as a pole in this global competition. Khanna’s assessment runs contrary to the well catalogued decline of Europe politically and economically vis-à-vis the United States, China, India, and other rising economies. Khanna argues the European Union has supplanted the US as liberal state par excellence with its “supranational integration model” and the manner in which this inspires second world states, but noted earlier in the essay
While European nations redistribute wealth to secure or maintain first-world living standards, on the battlefield of globalization second-world countries’ state-backed firms either out-hustle or snap up American companies, leaving their workers to fend for themselves. The second world’s first priority is not to become America but to succeed by any means necessary.
Place the clause about European priorities at the end of the paragraph and one can readily see the real challenge is posed by the take no prisoners style of East Asian authoritarian capitalism championed by China, not a Europe focused on making sure everyone has enough health care or vacation time. Rising economies do not emulate the leaden bureaucratic and sclerotic economic model of the Eurostate but the dynamic capitalism evident in China, Singapore, and the rest of East Asia.
Recent US foreign policy ventures may have deepened security challenges for the time being and severely aggravated internal fiscal imbalances, but the liberal capitalist model retains its attractiveness. For all the plaudits heaped on PRC’s party leaders and Russia’s oligarchs for overseeing historic economic growth, the gains do not approach the achievements of like countries choosing the liberal route. As Michael McFaul and Kathryn Stoner-Weiss point out in their recent Foreign Affairs article, The Myth of the Authoritarian Model; How Putin's Crackdown Holds Russia Back, authoritarian capitalist states are growing, but at a slower and less comprehensive rate than liberal capitalist states. McFaul and Stoner-Weiss demonstrate the correlation between autocracy and economic growth has been spurious, noting sustained high growth under autocracy is the exception, not the rule, around the world -- “For every China, there is an autocratic developmental disaster such as the Democratic Republic of the Congo; for every authoritarian success such as Singapore, there is a resounding failure such as Myanmar; for every South Korea, a North Korea.”
In fact, Europe symbolizes the risk for the US given its emphasis on the first part of the liberal capitalism formulation at the unfortunate expense of the latter component. Confidence in unelected bureaucrats, reliance on sweeping entitlement programs, and espousal of multiculturalism have proven fatal to Europe, resulting in political paralysis, economic malaise, and violent cultural clashes across the continent. America has maintained a robust democracy and achieved a measure of harmony on race and ethnicity, but to remain relevant against authoritarian capitalism, Europe’s choices provide a broken compass, a course not to be followed. America’s current messes may smack of imperial overstretch, but Europe’s performance (and more drastically its demographics) underscore how altruistic overstretch is a state of affairs to be avoided at all cost.
America prospered (unevenly) during the Cold War despite gargantuan defense budgets, but when the threat disappeared, expenditures dropped precipitously. However, the expected “peace dividend” did not materialize immediately. The unprecedented growth experienced in the latter Nineties depended on the subsequent actions balancing the budget, lowering taxes, and reining in the welfare state. If not for 9/11, much needed entitlement reform to some degree or another might have been achieved. With the American dollar in precipitous decline and stagflation on the horizon, dismantling the entitlement state is critical to preserving the national economy and its viability as a model for other nations. (Even some nations in Europe have seen the light.)
US – The Potential of a Competition State
In contrast to Khanna’s global, multi-civilizational, multi-polar muddle is an international political economy increasingly characterized by a plural and composite structure, or “plurilateralism” as defined by Philip G. Cerny, professor of global political economy at Rutgers University. Cerny notes the modern international system centered on the Westphalian nation-state as vehicle for collective civic action, and most recently, as a collaborative (or sometimes competitive) agent in the economy. With the rise of the modern industrial bureaucracies, once hard to attain public goods could be readily be provided by the state. Conversely, the advent of globalization diminishes the sovereign scope of a state and empowers transnational and non-national actors to provide such goods more efficiently. From Cerny’s perspective, states capable of conforming to such conditions will endure and flourish; such “competition states” retreats from the economy and focuses on providing the public goods for resident national assets to enhance their global competitiveness – namely human capital, modern infrastructure, and research and development capacity. Conversely, states unable to adapt will inevitably decline; such “residual states” is marked by sustained intervention in the domestic economy and capturing the rents of the country’s capital for the politically connected segment of the population.
Immediately, the disadvantages of the European and the East Asian approaches become apparent. European countries have achieved political economies of scale by undertaking integration on a continental scale, but on the global stage, the approach – commonality of high taxes, expansive welfare, and protectionism -- has compromised their overall competitiveness. In East Asia, nations have achieved enormous economic growth after undertaking substantial investment in education, standardization, and infrastructure, but the opacity endemic in semi-democratic and neo-authoritarian states has engendered corruption and an inefficient allocation of resources. The Asian financial crisis in 1997 was a harbinger of the fate awaiting the PRC should be unable to complete a rationalization of state-owned enterprises. Even worse, the PRC lacks the democratic institutions necessary to channel popular discontent should growth falter.
The United States has vigorous democratic institutions and a hardy individualist tradition, but its sixty-three year experimentation with entitlement programs is perilously close to jeopardizing the country’s vitality into a near future marked with increasing turbulence. American competitiveness in the geopolitical marketplace will not be achieved by a posture where “less can be more,” in Khanna’s words, but by revitalizing the exceptionalism of the American liberal capitalist model.
* The author acknowledges Khanna produced the essay as an adaptation of his upcoming book, The Second World: Empires and Influence in the New Global Order, to be published by Random House in March. Accordingly, the book may flesh out Khanna’s concepts to a greater extent.