par Pancho Villa
publié dans :
Martin Wolf
De la part de Mark Thoma et lu dans son blog Economist's View...
Edmund Phelps: Martin´s lively piece this week is timely, since the US Congress looks poised to try to legislate the end of the "saving glut" - in China, at any rate, if not the one in the Middle East, and not to mention the "investment drought" in Germany, Italy and France, which also leads to current account surpluses.
I have written before about what is now known as the "saving glut" hypothesis, drawing on ... "structuralist models"... [A] version of one of the open economy models ... suggests the following analysis: As incomes in China, the rest of developing Asia and the Middle East keep on increasing by leaps and bounds, a gap opens up between consumer demand and consumer good supply. (Amar Bhide and I have a 2005 paper on why fast growth tends to create such a gap in an LDC setting.) The excess supply of consumer goods seeks foreign buyers...
If the global market for consumer goods is to clear, meaning that global consumer demand matches global supply, short-term world interest rates must drop, lifting global household wealth, to push up global consumption demand... The prospect of these low interest rates for a long time means that the whole real yield curve is shifted down.
In the west, notably the US, the UK and the others to some extent, the valuations ... of ... business assets - the employee, the customer, office space per square foot - are sharply increased. So is the value placed by households on residential structures. That leads in turn to an increase in investment demand and thus to the creation of new jobs. There is a drop in the path of the natural unemployment rate. Moreover, the drop of real interest rates boosts household consuming of all kinds, which also fits with what we observe.
In this view, there is much in agreement with what Martin has written. There are, however, two points of disagreement.
First, the analysis does not support Martin's contention that the opening up of a current account deficit in the US can be credited with saving the world from a slump. If US consumers possessed less responsiveness to each one point drop of the interest rate, there would have had to be a larger drop; and Chinese consumers would have been emboldened to step up a little their consumption, about which they have been so cautious.
Second, and more important, although this episode of "imbalance" is seen badly by Martin and some others..., I find much ... to be thankful for. Without the Chinese shock, the US economy would not come out of the slump of 2001-2002 nearly as well as it did.
Yes, the low interest rates are not sustainable - what is? But so what? If countries spurned every opportunity that looked to be unsustainable business life would be much the poorer.
...ce qui ressemble etrangement a ceci...
(...this sounds quite similar to what Milton Friedman said yet not long time ago...)
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par Pancho Villa
publié dans :
Martin Wolf
Comme à son habitude, ce cher Martin Wolf "excelle" dans sa matière...
Why Sarkozy's triumph portends strife in Europe
by Martin Wolf
What does the election of Nicolas Sarkozy mean for France, the European Union and the world? The answer will depend on whether what now emerges is a European France, a French Europe or a France set against Europe. Any of these three outcomes is possible. Only the first would be desirable. Which it will be depends on Mr Sarkozy's true identity. Will he be an economic liberal or a populist interventionist? It is probable that he will turn out to be a mixture of the two. If so, his arrival is likely to deliver the last of the three alternatives: France against Europe.
Hie French agree on few things. But on one thing they have dose to a national consensus: free markets and free trade are a diabolical Anglo-Saxon plot. In a thought-provoking book on the challenge for French policymakers, Georges de Menil, himself an American-trained liberal economist, ascribes this hostility to the legacies of Catholicism, Cartesian rationalism, revolutionary utopianism, nationalism and the dominance of the state*.
For a modern politician of the right, such as Mr Sarkozy, it is the last two elements that are most important It leads him, both instinctively and as a matter of political expediency, in the direction of Colbertian mercantilism, lite policies of Jean-Baptiste Colbert, minister to Louis XIV between 1647 and 1669, had three characteristics: dismantling internal barriers to commerce; protection against foreign competition; and promotion of domestic industry. In the US a not dissimilar body of ideas is associated with the name of Alexander Hamilton.
If one adds to Colbertian mercantilism the need to gain power in a country with closely interwoven populist and Bonapartist traditions, a Mr Sarkozy emerges. Here is a man determined to inject dynamism into an ossified French domestic economy, while protecting industry against "unfair" foreign competition. Here, too, is a man who cannot understand the notions of a central bank independent of government or an exchange rate set by the market. None of this should be surprising. The combinations are as traditional as they are problematic.
France does indeed need domestic reform. This is still a rich country with superb public services and an enviable way of life. But gross domestic product per head has been in decline, relative to the US and UK, since the early 1990s. The same is true of output per hour worked, even though its level remains very high. The unemployment rate is now higher than in all other big western European countries (see charts).
Public spending, at 54 per cent of GDP in 2006, was the second highest in Europe (after Sweden). According to the Organisation for Economic Co-operation and Development, it was 8 percentage points higher than in Germany, despite the latter's post-unification burden. Gross public debt was 75 per cent of GDP at the end of 2006, against Germany's 71 per cent and the UK's 48 per cent White French export performance compares well with the UK's and Italy's, it has fallen far behind Germany's: last year French merchandise exports were $489bn (€361bn), against Germany's $l,lllbn.
The arguments for liberalisation, particularly of the labour market, fiscal retrenchment and reform, especially of the public sector, are overwhelming. Yet, in setting out on this path, Mr Sarkozy will provoke well-organised vested interests: above all, people with secure jobs and those who hope to obtain them. The French street has defeated the mighty French state time and again. History could wen repeat itself.
This struggle may prove to be short or long, successful or unsuccessful. But it is certain to be of more than local interest. A government under domestic pressure will search for a unifying external enemy. The candidates are many: the European Commission; the European Central Bank; Anglo-Saxon free marketeers; Asian "social dumpers"; and desperate would-be immigrants. In his campaign, Mr Sarkozy has already auditioned all of them for this role. This brings us back to France in Europe. For excellent reasons, European economic integration is built on a level competitive playing field, just as the monetary union is based on central bank independence and tough control over inflation. The EU is also bound by international agreements that guarantee liberal access to foreign producers and national treatment for the businesses operating within its market.
How, then, is Mr Sarkozy's relaunched France going to fit into this framework? One possibility - the most desirable - is what I have referred to as a "European France". In other words, France will, willy nilly, accept the constraints imposed by membership of the EU. It win accept, in short, that "I'exception Frcaifaise" is incompatible with the principles of equal membership of the EU.
Yet what Mr Sarkozy has said in the campaign suggests strongly that he does not accept, or even understand, this idea. He wants a French Europe, instead, one in which his dirigiste approach is translated to the European level: an ECB under political control; a European industrial pohcy, and EU preference, by which he means greater protection against disruptive foreigners.
Yet a French Europe is unobtainable, perhaps even more today than in the past. Historically, French leaders have adjusted to this, albeit reluctantly. They have accepted German views on competition and central hanking and. Their partners' views on trade liberalisation. They did so for a strong reason: they desperately wanted more integration.
Today, however, France does not seek further integration. If Mr Sarkozy will reject a European France and cannot obtain a French Europe, the outcome must then be conflict between France and Europe. The likely result of his election, therefore, is of a France divided internally and intransigent externally. The consequences for the EU are as evident as they are depressing.
Needless to say, this outcome is not inevitable. Under Mr Sarkozy, the French economy may rediscover its elan, France may regain its confidence and the French may even accept a globalising world economy. The country may then be reconciled to a market-based EU. Miracles do happen.
Yet that happy eventuality is far from likely. Mr Sarkozy has been willing to upset many of his country's partners in the past It is all to easy to imagine his making such conflicts with them his way of fife in the future. If so, relations between France and the rest of Europe are going to be bumpy, and perhaps much worse than merely bumpy, in the years ahead.
*Common Sense: Pour debloquer la societe Française, Odile Jacob 2007
par Pancho Villa
publié dans :
Martin Wolf
In this brave new world Chindia's uneven rise continues
Martin Wolf
"Chindia" is the word coined by the Indian politician, Jairam Ramesh, to denote the two Asian giants that contain 38 per cent of the world's population between them. Nor is size their only similarity. Both are heirs of ancient civilisations; both were, until
recently, desperately poor; and both are among the world's fastest growing economies. Yet the differences are also striking. By looking carefully at them one can learn more about their prospects for continued growth.
The economists' technique of growth accounting helps shed a bright light on the story. A recent paper by Barry Bosworth and Susan Collins of the Washington-based Brookings Institution does just that*. It compares performance over the 1978-2004 period, but the years since 1993 are particularly interesting, since they succeed India's post-1991 reforms.
The broad picture is of Chinese growth of 9.7 per cent a year, against India's 6.5 per cent. So, given differences in population growth, India's real income per head grew at less than half China's. Employment generated only a small proportion of the growth: 1.2 per cent a year for China and 1.3 per cent for India. In China, output per worker rose at the staggering rate of 8.5 per cent a year. Increases in physical capital per worker accounted for half of this latter increase and increases in pure efficiency - what economists call "factor productivity" - for the rest, India's output per head rose at 4.6 per cent a year. Given China's high investment, it is not surprising that India's accumulation of physical capital contributed less than half the growth of China's. But factor productivity also had almost double the impact in China.
The paper also provides illuminating contrasts with east Asian economies, other than China; namely, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. India's growth of output per head between 1993 and 2004 was as fast or faster than that of the aggregate of these seven economies over any lengthy period between 1960 and 2003. Factor productivity generated a contribution to India's growth of 2.3 percentage points a year between 1993 and 2004. For the east Asian countries, the corresponding figures were 1.2 percentage points between 1960 and 1980, 1.4 percentage points between 1980 and 1993 and just 0.3 percentage point; between 1993 and 2003.
In agriculture, China's growth rate was 3.7 per cent a year against just 2.2 per cent for India. Employment growth was negative in Chinese agriculture and marginally positive in Indian. The big dffierence was in the growth of output per worker, with China, again, accumulating capital far faster and achieving much faster growth in factor productivity.
In industry, Chma's growth rate was 11 per cent a year, of which employment contributed just 1.2 percentage points. Output per worker rose at 9.8 per cent a year. Of this, no less than 6.2 percentage points was generated by rising factor productivity. Meanwhile, India's industrial growth was just 6.7 per cent a year. Factor productivity contributed a mere 1.1 percentage points a year to this growth. But employment growth contributed 3.6 percentage points.
Now turn to services. Here India's growth rate was close to China's: 9.1 per cent a year, against 9.8 per cent. Output per worker contributed 5.1 percentage points of the growth in China and 5.4 percentage points in India. Here is the one sector where Indian productivity growth matched China's. Rising factor productivity contributed 3.9 percentage points to Indian growth and just 0.9 percentage points to China's.
The results for India are largely what one would expect. But China's productivity - and particularly factor productivity - performance is far better than previous studies have shown. This is partly because of revisions to the national accounts, which have raised the level and growth of the services sector. Also important are technical assumptions about the impact of the capital stock on output, which matter for China because the capital stock grew so much faster than the economy.
Evidently, this effort is heroic. Nevertheless, the broad picture is highly suggestive. Both of these remarkable performance, though with China's clearly superior. India's outstanding sector is services; China's is industry. Employment growth outside agriculture is low and the share of agriculture in employment still high: 47 per cent for China and 57 per cent for India in 2004. China's productivity performance has been astonishing, largely because of rising output per worker in industry, though it has also done well in agriculture and services. India's productivity performance is also quite good, overwhelmingly because of services.
The implication, as the study itself concludes, is that "the supply-side prospects for continued rapid growth in China and India are very good".
With a remarkably open economy and gross fixed investment at 43 per cent of gross domestic product last year, it is hard to identify significant constraints on China's growth in the medium term. A breakdown in the global economic and political system would presumably do it. So might domestic political or social instability.
In the long term. Failure to persist with reform would also be a danger. India's fixed investment has been far lower. But it is already close to 30 per cent of GDP. If the fiscal
position continues to improve and inflow of long-term capital from abroad to accelerate, the investment rate could rise still further. Partly because infrastructure is poor and industrial performance disappointing, the upside for Indian growth is also bigger than for China's. But India also suffers from serious handicaps. The most important, apart from weak infrastructure and a relatively ineffective government, is the scale of mass illiteracy. Adult male literacy was only 73 per cent and female literacy a deplorable 48 per cent in 2002, against 95 and 87 per cent, respectively, in China.
Chindia is on the move. Since China's standard of living is roughly a fifth of that of the high-income countries and India's one-tenth, the fast growth of the giants might persist for a generation. As Shakespeare might have said: O brave new world, that has such countries in't! (The brave new world is beckoning, so the olden world must die...)
* Accounting for Growth: Comparing China and India, Working Paper 12943, February 2007, National Bureau of Economic Research, www.nber.org
par Pancho Villa
publié dans :
Martin Wolf
A divided world of economic success and political turmoil
by Martin Wolf
The world's economy is in excellent shape, but its politics is disturbing. ..-. The question is whether and how this divergence might end. ...
One possible outcome might be the exact opposite of conventional wisdom: economic disappointment and political stability. ... Today, the underpricing of risk and the combination of low interest rates with fast growth almost invite economic blunders. Meanwhile, the world's political leaders, aware of the risks of conflict and reliant on their people's prosperity for retaining power, may well continue to muddle through. This surprising outcome is quite possible.
A second alternative is that the economic and political tracks would continue in their separate directions. The reason for this would be that, far from being distinct, the contrasting economics and politics are two faces of just one globalising world. ...
The fact that economics is making our world more interdependent and connected, while politics remains national or local, makes the contrast between economics and politics inevitable. ...
It is plausible, therefore, that political disarray and economic success will continue in tandem, the challenge being to avoid the emergence of too wide a gap between the two. For, as we learned in the first half of the 20th century, a big enough backlash is capable of causing devastation. In a nuclear age, that devastation would be greater still. ...
A third possibility is that the politics overwhelms the economics, as it did between 1914 and 1945 and in the communist "second world" and much of the so-called "third world" for much longer. An attack on Iran - a much-discussed possibility in Davos - would bring far closer the clash of civilisations... feared by so many... In that case, the economic optimism of today would prove unfounded - possibly destroyed by a world of $150-a-barrel oil in the aftermath of the closing of the straits of Hormuz through which so much of the world's oil flows.
Yet there is also a far more comforting possibility: the economics overwhelms the politics. One of the stories of our era is the way in which vast countries such as China and India are orienting their politics around the goal of prosperity. This forces them to seek domestic and global stability and accept international openness and mutual dependence. They see no benefit in international conflict. It is surely possible that this view of national priorities will take hold in more of the world, including the Middle East. ...
In such a world, the issues discussed in Davos - climate change, the Doha round and African development - might be handled successfully. The difficulties of collective action are profound. But ..., the less credible are unilateral approaches to a resolution, the more likely are co-operative ones.
This year's "Davos dilemma" - the contrast between the world's favourable economics and troublesome politics - is clear enough. But its resolution is not. A range of possible outcomes, from the perverse and catastrophic to the uncomfortable and even benign, is conceivable. The outcome is not inevitable. We can choose. ...
par Pancho Villa
publié dans :
Martin Wolf
Standard economics and the 'evolution' thesis can coexist
by Martin Wolf
Is the discipline of economics built on sand? Most economists would answer with a resounding "no". But most must also know that the economy is not characterised by perfect foresight and equilibrium...
This gap between how economists think and what economies are is evident... But hitherto nobody has closed the gap... This, argues McKinsey's Eric Beinhocker in a brilliant, thought-provoking and wide-ranging book ... is about to change. Welcome, he argues, to the world of "complexity economics", computer-based simulations and more realistic assumptions. ...
"The economy is a marvel of complexity," he states. "Yet no one designed it and no one runs it." How can such a system have been created? Why has complexity increased over time? Why has so much of the rise in wealth and complexity been so sudden? The answer to these questions can be found, suggests Mr Beinhocker, in understanding that the economy is "a complex adaptive system", which works under the same logic as biological evolution - differentiate, select and amplify.
Conventional economics cannot explain such an evolutionary process, because the science that has provided most of its ideas is not biology, but physics. ... As Mr Beinhocker puts it: "The economy is ultimately a genetic replication strategy. It is yet another evolutionary Good Trick . . . built on the complex Good Trick of big brains, nimble tool-making hands, co-operative instincts, language and culture." So successful is the economy that much of humanity no longer has to focus on staying alive. ...
How has today's economy evolved? The answer is: through the interaction of three processes. The first is the evolution of physical technology, which spurted after the scientific revolution of the 17th century. The second is the evolution of social technologies, such as money, markets, the rule of law, the corporation and democracy. The third is the evolution of businesses, the entities that live, die and replicate in the economy.
Economic evolution and biological evolution are different: the fact that human beings can plan and adapt makes economic evolution faster and more purposive than biological evolution. But it is still evolution. ...
As Mr Beinhocker puts it: "Markets win over command and control, not because of their efficiency at resource allocation in equilibrium, but because of their effectiveness at innovation in disequilibrium." Markets are a hugely powerful evolutionary mechanism: they are innovation machines.
Is this thesis true? Is it useful? Does it replace standard economic analysis? The answers to these questions, I believe, are: yes; yes; and no.
First, today's economy has indeed evolved. ... Second, this way of thinking is extremely useful. The book explains, for example, why most companies fail to sustain competitiveness. ... As Mr Beinhocker notes: "Companies don't innovate; markets do." So businesses should think in terms of evolutionary adaptability. But they find this difficult, because they are far better at executing plans than adapting to unforeseen circumstances. That is the price they pay for hierarchy.
Finally, what does "complexity economics" mean for economics? Much less than Mr Beinhocker imagines, I believe. Even such great evolutionary theorists as William Hamilton and Maynard Smith also used equilibrium models. Similarly, the economist's simplification of human motivation is often the only way to make a complex problem tractable. The implications of the ad hoc, computer-based simulations Mr Beinhocker recommends are often difficult to understand (and yet, too simple...). Above all, traditional economics often works: look at the success of inflation targeting or at the benefits of trade. ...
par Pancho Villa
publié dans :
Martin Wolf
L'indispensable 'Loup' (sans vouloir pointer du doigt le sujet precedent....) a ete recompense...
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par Pancho Villa
publié dans :
Martin Wolf
The saga of the falling dollar still has a long way left to go
by Martin Wolf
Richard Nixon's Treasury secretary, John Connolly, famously remarked that "the dollar is our currency, but your problem". He would be right again now. The rest of the world normally wants a strong dollar. Yet the dollar is now in a bear market. How long might this go on? The plausible answer must be: a while yet.
Since early 2002 the dollar has been on a steep downward path: on JPMorgan's trade-weighted real exchange rate it has depreciated by 23 per cent since February 2002. This is the third such sustained decline since Mr Connolly's remarks. The first was during the early 1970s. The second was from 1985 to 1988. On each of the two previous occasions, the depreciating real exchange rate also helped generate a big adjustment in the balance of payments. This was strikingly true in the 1980s. The same thing is happening again.
Between 1996 and 2004, real US domestic demand grew fester than real gross domestic product every year. This was necessary, I have previously argued, if GDP was to rise in line with potential, given the prevailing real exchange rates and the weak rate of growth of demand in much of the rest of the world. Over these years, cumulative growth in US real demand was 39 per cent, while GDP grew by 33 per cent. The difference was the real increase in the deficit in trade in goods and non-factor services.
This has now changed. US real GDP will have grown at almost exactly the same rate as real demand in 2005 and 2006, according to the most recent economic outlook from the
Organisation for Economic Co-operation and Development. In real terms, the current account deficit is consequently stabilising at last, albeit at a very high level.
US exports are also at last growing at roughly the same rate as imports: between the third quarter of 2003 and the third quarter of this year exports of goods and services grew 27 per cent, in constant prices, while imports rose 26 per cent. This is a big change: over the previous eight years, US exports rose by a mere 31 per cent, while imports rose by 80 per cent, again in constant prices.
Does this suggest that the needed adjustment in the real exchange rate has come to an end? Probably not.
If the current account deficit were to remain dose to 7 per cent of GDP, US net liabilities would probably stabilise at substantially more than 100 per cent of GDP. That would be an extraordinarily high level for such a big economy. Moreover, one would expect a rise in net liabilities from about 22 per cent of GDP at the end of last year to force substantial changes in asset prices. The larger the US share in the portfolios of the rest of the world, the higher the prospective returns that foreign investors would, be expected to demand, to compensate for the risk.
Either a lower dollar, or lower US asset prices, or both, would seem the inevitable result. Moreover, it is hard to imagine that a falling exchange rate would not be a big part of this picture. The fact that the US borrows entirely in its own currency makes deficits safer for itself, but riskier for its creditors. For this reason a belief that the currency has become undervalued - and so can be expected to appreciate - would make it easier to sustain net liabilities on such a gigantic scale. This is one reason why such movements tend to overshoot.
Moreover, some three-fifths of gross US liabilities of $13,625bn (€10,224bn) at the end of last year took the form of bonds, currency, bank liabilities and similar claims The value of such claims to foreign creditors is more vulnerable to inflation and so to the impact on domestic prices of a sizeable currency depreciation than claims on real assets. The US cannot guarantee the dollar against a fall and would not wish to, even if it could. So creditors are likely to come to a point at which they wish to see the depreciation before they continue to supply the capital flows that win be needed.
Creditors win also be more willing to go on buying US assets if they start to see a reduction in the country's deficits. That would require a period during which exports grew fester than imports, in real terms. It is at least plausible that this would also necessitate a lower real exchange rate than we have ever seen before.
Thus, even though the currency has fallen a long way, it is easy to imagine its falling more. How far it would need to fall would depend on how quickly demand grew in the rest of the world. It would also depend on what happened hi the US economy itself: the weaker domestic demand and the tower the interest rate, the lower the dollar itself might go.
In short, the long bear market in the dollar is probably not over. But even if it were over, on a trade-weighted basis, that would not be the end of the story. An overall decline is only a part of what is required. Also important is some redistribution of the adjustment.
Hitherto, high-income countries that are not running large current account surpluses have experienced big appreciations against the dollar, while the developing countries that are running such surpluses have not. That is unlikely to be sustainable, not least because it has required colossal exchange rate intervention. Official reserves exceeded $4,500bn by the end of the first half of 2006, an increase of some $2,700hn since the end of 1999.
It is possible to imagine a world in which a substantial part of the US current account deficit were shifted to other high-income countries by a depreciation of the currencies of the entire extended dollar area. But it is hard to imagine the countries with floating exchange rates tolerating such a shift for long. The eurozone is a particulariy unlikely candidate.
Where then have we arrived in the story? First, adjustment is beginning to happen, as the dollar has plunged substantially on a trade-weighted basis, while demand in the rest of the world has also picked up; second, the decline in the dollar has probably not reached the level needed to sustain either a big diminution of the external deficit or the needed financing; third, even if it has, the necessary adjustment of exchange rates between the countries in the extended dollar area and countries with floating exchange rates has still hardly begun.
This extended saga will finish with many chapters: the rise of the dollar
while the US current account deficit exploded was the first; the fall of the ,
dollar while the current account deficit went on rising was the second; we are now in the third, when the deficit stabilises at last. But this story is not yet over. What sort of problem the dollar win prove to be over the entire cycle is unclear. All we can say at the moment is: "So far, not too bad." Let us hope it remains so.
par Pancho Villa
publié dans :
Martin Wolf
Martin Wolf, que P.-V. adore, casse (...et la, il la casse vraiment...et de nouveau) la baraque...en disant en partie ce que Pancho Villa aussi avait sur le coeur...Bravo Martin...(...2eme partie) |
Fear up the Bush doctrine and revisit America's real values
By Martin Wolf
US voters have now repudiated those who sought to impose democracy by force abroad. In spite of the gerrymandering of districts, the advantages of incumbency and renewed recourse to the politics of fear, common sense prevailed. George Bush is still president. But he is damaged political goods. That is good, because change is desperately needed.
The signal feature of this administration has not been merely incompetence, but its rejection of principles on which US foreign policy was built after the second world war. The administration's strategy has been based, instead, upon four ideas: the primacy of force; the servation of a unipolar order; the unbridled exercise of US power, and right to initiate preventive war in absence of immediate threats.
The response to the terrorist outrage of September 11 2001 reinforced the hold of all these principles. The notion of an indefinite and unlimited "war on terror" became the fulcrum of US foreign policy. It led to the idea of an "axis of evil" connecting Saddam Hussein's Iraq to theocratic Iran and Kim Jong-il's North Korea. It brought about the justified invasion of Afghanistan, but also the diversion into Iraq. Not least, the idea of the war on terror led to the indefinite imprisonment of alleged enemy combatants without judicial oversight, toleration of torture, "extraordinary rendition" of suspects, the extra-territorial prison at Guantanamo Bay and, by indirect means, the abuses at Abu Ghraib.
All this has been bad enough. It is made worse by what John Ikenberry of Princeton University and Charles Kupchan of Georgetown aptly describe as the "sloppy intelligence, faulty judgment and ideological zealotry" that marked implementation, above all in Iraq.* Yet the poor implementation is not an accident. A belief in the primacy of the military naturally led to the transfer of responsibility to the department of defence; a belief in the efficacy of force created the conviction that victory meant peace and a swift transition to democracy; and riisrlain for allies guaranteed the absence of co-operation in postwar occupation.
The US must now start again. It must design a foreign policy for the current age. In doing so, it should discard almost everything the Bush administration has proclaimed.
First, the aims of foreign policy go far beyond the misnamed "war on terror". The Islamist terrorists with which the world should, indeed, be concerned do not even pose the same existential threat as the cold war's competition among superpowers. Equally important are maintenance of a prosperous world economy, management of the rise of new great powers, economic development, not least in the Islamic world, and management of the global commons.
Second, military power is far less effective than its supporters suppose. The threat of force cannot change the policies of other great powers, except to make them more suspicious of US intentions. It must make potential enemies still more determined to obtain nuclear weapons. As Iraq has shown, vast power cannot even impose stability on a country of 21m.
Third, the legitimacy of America as a global power rests on the ability of the US to command the respect of other countries and peoples. Gerhard Schroder could not have won an election in 2002 on an anti-American platform if the German people's confidence in the US had not been undermined. Yet more important, the war against jihadi terrorists is a war of ideas. It will be won not by fear, but by making the west's values more attractive to hundreds of millions of Muslims than those of its fanatical opponents. The willingness of this administration to treat the rule of law as an optional extra has made it far more difficult to defeat the terrorist ideology in the long run.
Fourth, multilateral institutions matter. They turn what would otherwise be clashes of prestige and power into acceptance of shared rules of good behaviour. Above all, only the willing co-operation of at least the world's leading powers can address many of the global challenges. Shared institutions make such co-operation more credible and more sustained.
Fifth, solid alliances matter. The coalition of the willing has proved a slender reed. Even the UK is unlikely to let itself be dragged into a venture similar to Iraq again, in which it is fully committed but has no influence on how policy is executed. Yet the US has proved unable to achieve what it seeks unaided. Fixed alliances are indeed constraints, but they are also means of seeming commitments.
The foreign policy of Mr Bush, arguably the worst president since the US became a world power, has come to a dead end. The big question is what happens now. For disastrous though it has been, alternatives could be as bad. A "realism" entirely indifferent to western values would be one blunder. Still worse would be a retreat from the war in Iraq into isolationism and from openness into protectionism.
I, however, am an optimist. Winston Churchill famously said that "the United States invariably does the right thing after having exhausted every other alternative". The world will not accept an American master. But it will still welcome American leadership, provided that leadership takes due account of the interests of others and rests on the values that the US has itself spread to the world.
Three decades ago, when the Vietnam war had just been lost, President Richard Nixon had been forced to resign and the world economy was in inflationary turmoil, the future of the west seemed dark. Yet over the next one and a half decades China chose the market and the Soviet empire collapsed. The victories over communism were not secured through force of arms, but through the attractions of the west's prosperity, freedom and democracy.
Foreign policy is inescapably difficult. But one point is, I would suggest, incontrovertible. The US needs to renew its faith in the values of freedom, the rule of law and global cooperation on which it built an astonishingly successful international order after 1945. The right way ahead cannot go through 19th century views on sovereignty and the balance of power. It should go via the power of US example rather than its military power and via its ability to give a lead rather than unilateral dictation. The great US policymakers of the 20th century understood that well. Then-successors should show the same wisdom in the 21st.
*Liberal Realism: The Foundations of a Democratic Foreign Policy, The National Interest, Fall 2004, www.aspenberlin.org/interesting_ articles.php?iGedminId= 72
par Pancho Villa
publié dans :
Martin Wolf
Martin Wolf, que P.-V. adore, casse (...et la, il la casse vraiment...) la baraque...en disant exactement ce que Pancho Villa aussi avait sur le coeur...Bravo Martin... |
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Traduction 'a la va-vite' de P.-V....
'Ceci est un forum pour economistes. Mais je pense que l’on doive etre d’accord avec le fait que le sujet de la politique etrangere est bien trop important afin de n’etre delaisse qu’a des ‘experts’. En tant que citoyens, si ce n’est pas en tant qu’economistes, je pense que nous aussi, nous devons y rajouter notre grain de sel, et c’est pour cela que j’ai ose traiter, a certaines occasions, des questions de politique etrangere. Larry, lui-même, a su montrer ce qui etait posssible de faire [traitement de ces questions], en nous ayant livre une excellente analyse de l’etat d’ame qui se trouve derriere ce qu’il decrit en tant que ‘l’election de la repudiation’ Ce que je voudrais souligner, est que la facon avec laquelle cette administration a encadre le monde de l’apres 9/11 fut une vraie catastrophe. Il n’existe tout simplemenet pas de ‘guerre contre le terrorisme’. La puissance militaire n’a pas les capacites d’assurer une securite durable contre ce qui s’appelle une idee. Meme dans le cas de la guerre froide, la victoire a ete atteinte [tautologie dans le texte original] parce que le communisme n’a pas su offrir une vie meilleure. Ce a quoi nous nous sommes engages, est en essence, une operation de contrôle complexe et globale combinee a une guerre d’idees. Nous devrions etre confiants de croire que nos idees vont au bout du compte triompher si nous-mêmes, nous ne voudrons pas les trahir et ceci en leur laissant le temps qu’il faudra. En rejetant les traits essentiels qui definissent la fin de la loi, i.e. en employant la torture, en diffamant ceux qui ne sont pas d’accord avec ces idees, en demolissant de vieilles alliances, en ayant une indulgence confidentielle sans bornes a l’egard du pouvoir militaire et pour finir, en promettant de transformer les societes a l’aide d’une arme pointee sur celles-ci, l’administration a trahi des valeurs essentielles occidentales [mais pas celles du far-ouest]. Elle a aussi montre une incompetence grotesque en ce qui concerne l’execution. Comment pouvons nous gagner une guerre des idees comme celle-ci ? Les Etats-Unis, et j’espere, le monde, qu’il soit occidental ou non-occidental, doivent recommencer des le debut. Je pense qu’une des grandes contributions de FDR pendant les sombres jours des annees 30 a ete cette declaration en disant : ‘Nous n’avons rien a craindre sauf la peur elle-meme’. Sa politique etait celle de l’espoir. Dans un sense bien different, Ronald Reagan aussi a su donner de l’espoir. Et c’est ce que moi je trouve impardonnable : la peur nous rend minuscules, la peur nous rend faibles, et la peur nous rend detestables. Nous ne pouvons vaincre ce conflict d’idees si tout ce que nous pouvons offrir est en fait notre peur. Le peuple americain a aussi su montrer que la peur ne rend pas necessairement immobile. Ceci est un triomphe d’idees essentiellement democratiques qui a demontre qu’une majorite de gens ordinaires a su au bout du compte atteindre la juste conclusion. Il n’y a qu’a esperer que les E.-U. soient maintenant sinceres envers eux-memes.' |
par Pancho Villa
publié dans :
Martin Wolf
