We need an economics-based foreign policy
It is impossible not to be fascinated by the WikiLeaks release of U.S. State Department cables this week. It is a story that has everything, ranging from insight into the U.S.-Russia relationship, to salacious tidbits like Ghaddafi’s predilection for buxom Ukrainian nurses, to raising the meaty issues of free speech, the internet and a government’s need for privacy.
But the most significant revelation isn’t what is in the documents—it is what is missing from them. The financial crisis of 2008, and its agonizing aftermath, changed the world profoundly. We now know it didn’t change the State Department. The most important take-away from the WikiLeaks data dump is that America needs a new foreign policy paradigm to deal with the post-crisis world.
The starting point for that paradigm must be to put the economy at the heart of foreign policy. Some of America’s savviest wise men are already making that point, most notably in the latest issue of Foreign Affairs, with two seminal essays on the importance of the economy for statecraft.
But these pieces, which argued that America’s troubled fiscal position is a major constraint on its ability to act in the world and that growing GDP should be a central goal of U.S .foreign policy, are just a start. The U.S. needs to reframe its foreign policy from the bottom up, and build its new approach around both national and international economic issues.
America needs a new paradigm not just because it has run out of money to be the world’s policeman, or because the recession at home requires everyone—including diplomats—to pitch in to put the country back to work. The country needs a new way of thinking about its foreign policy goals because national security and international relations—the classic concerns of diplomacy—are now largely driven by economic concerns.
For much of the last century, the Cold War determined the framework for U.S. foreign policy. Containing communism, and ultimately helping to defeat it, were, rightly, the defining goals of America’s engagement with the world. In the triumphal aftermath of the end of the Cold War, both left and right in the United States were tempted by the idea of shaping American foreign policy around an agenda of bringing freedom or democracy or free markets or some combination of all three to the rest of the world.
President George W. Bush’s reaction to the terrorist attacks of Sept. 11, 2001, was to add teeth and a more traditional national security justification to that campaign: In an echo of the Cold War, the battle against Islamic extremists, both those who ruled states and those who did not, emerged as the defining purpose of U.S. foreign policy. Nearly a decade later, this threat seems less all-encompassing, and the responses—wars in Iraq and Afghanistan—imperfect, even in the view of many of their supporters.
Meanwhile, a new defining international issue—for both America and for everyone else—has emerged: how to organize the world economy. This has been a rising concern since the collapse of communism and the subsequent adoption of some version of capitalism by almost all of the world (pace North Korea, Cuba and Zimbabwe).
But it was the meltdown of 2008 which moved the global economy from Wall Street to the State Department and foreign ministries around the world. The financial crisis showed us all that globalization is not only an engine for international economic growth, but a source of grave, and international, risks. Healing the global economy is now the world’s most urgent priority — and it is a job which can’t be done only at the national level.
Nuclear weapons—both their deployment, and treaties limiting it—were the dominant concern of the Cold War era of U.S. foreign policy. Fighting actual wars was the dominant concern of the post-9/11 era. Today, the most important mission of America in the world is figuring out how to rebalance the world economy and to fight the protectionist impulses which are an inevitable reaction to recession. Here’s hoping that the next time WikiLeaks tells the State Department’s secrets, most of them are about reserve currencies, raising domestic consumption in emerging markets and free trade deals.