Liberal Realism The Foundations of a Democratic Foreign Policy. G. John Ikenberry & Charles A. Kupchan.

HE UPCOMING presiden- First, we illuminate the contrasting logics tial election represents a that inform policy choice, hopefully con- Tdefining moment for the tributing to a richer public debate. and its engagement in global Second, we contend that liberal realism affairs. The foreign poHcy of the Bush has clear advantages over the approach of Administration represents a radical depar- the Bush Administration; a Democratic ture—in principle as well as practice— foreign policy guided by it would enhance from the tradition of liberal realism that both U.S. security and international sta- guided the United States throughout the bility. We examine the five core issues second half of the 20*^^ century. The that provide a conceptual foundation for a Democratic Party promises to reclaim lib- U.S. grand strategy: the operation of the eral internationalism, restoring a centrist balance of power; and its impact foreign policy guided by ideals as well as on the international system; the role of power realities. On offer are two contend- rules and institutions in maintaining ing visions of America's role in the world. order; the connection between legitimacy In one, international order arises exclu- and international governance; and the sively from U.S. pre-eminence, with management of deficits, trade and the America wielding its unchecked power to global economy. We first outline how keep others in line and enforce interna- each of these issues affects U.S. policy and tional hierarchy. In the other, internation- global politics, next describe and critique al order arises from the coupling of the Bush Administration's approach to America's pre-eminence with its liberal each issue, and then go on to examine our founding principles, with the United Democratic alternative and its advantages. States wielding its power to craft consen- sual and legitimate mechanisms of inter- national governance. Which vision pre- Operating the Balance of Power vails will have enormous consequences for ELIEFS ABOUT the dynam- global politics. ics of power balancing and the We have two principal objectives. B effects of polarity on system stability play a central role in the formula- G. John Ikenberry is Albert G. Milbank Professor tion of grand strategy. Three sets of ques- of Politics and International Affairs at tions are at issue. What are the systemic . Charles A. Kupchan is effects of unipolarity, and, in light of professor of international affairs at those effects, how should the United and senior fellow at States wield its primacy in order to pro- the Council on Foreign Relations. mote stability? How durable is unipolarity.

38- -The National Interest—Fall 2004- and what strategy should the United military superiority and the presumed States pursue to shape the emerging maintenance of that superiority due to geopolitical environment? Should U.S. ongoing investment in capability as well power be measured primarily in material as research and development. The lever- terms, or does a multi-dimensional age provided by such pronounced materi- approach offer a more accurate measure al advantage, coupled with the impor- of America's relative power position? tance of demonstrating U.S. resolve, To its credit, the Bush Administration makes it both possible and desirable for has taken a clear position on each of these the United States to act in a unilateral and vital questions in the aftermath of 9/11, unconstrained fashion; allies are not need- articulating its views in its National ed to tame enemies that are no match. Security Strategy and supporting docu- ments and speeches. For the Bush team, HESE GUIDING supposi- international order is a direct by-product tions are fundamentally of U.S. primacy. System stability increases Tflawed. Basing America's in step with U.S. power; the starker the grand strategy on them triggers exactly asymmetries, the less likely it becomes what the Bush Administration is seeking that any nation will even consider chal- to forestall: balancing against U.S. power. lenging the U.S.-led order. The United The Bush Administration is correct that States should demonstrate its political the current international system is unipo- willingness to use its preponderant power lar and that U.S. primacy is uncontested. as it sees fit—especially after 9/11 — It is also correct that in the post-9/11 enhancing its ability to dissuade potential world, America must vigilantly protect challengers and to counter unconvention- itself against the threats posed by Islamic al threats before they compromise U.S. extremism, international terrorism and security. In sum, uncontested U.S. prima- WMD, when necessary using its military cy coupled with unmistakable resolve will superiority to do so. forestall balancing in the international It is misguided, however, to assume system, instead establishing stable hierar- that America's preponderant power, when chy. As President Bush stated in a speech combined with an assertive unilateralism, at West Point in June 2002, promotes stability as a matter of course. As the record of the past four years makes America has, and intends to keep, military clear, the unfettered exercise of U.S. pri- strengths beyond challenge . . . thereby, mak- macy has not led to deference and band- ing the destabilizing arms races of other eras wagoning, but to resentment and incipi- pointless, and limiting rivalries to trade and ent balancing. The problem is not unipo- other pursuits of peace. larity per se, but changes in the exercise of U.S. power that have in turn changed for- This strategy is predicated upon the eign perceptions of U.S. intentions and assumption that unipolarity is sustainable how the United States will use its prepon- for the foreseeable future and should be derant strength. A dominant America that preserved for as long as possible. reassures others and deploys its power to American preponderance will discourage secure public goods induces systemic sta- potential challengers from seeking the bility; unfettered primacy deployed in the resources needed to contend for primacy, exclusive pursuit of national self-interest and even if dissuasion fails, no state could does the opposite. conceivably pull even with the United The Bush Administration's grand States for decades to come. Such confi- strategy rests on a second geopolitical dence is based primarily upon America's misconception: that U.S. primacy is

-Liberal Realism- -39 durable. To be sure, America's economic coalition that blocked UN authorization and military might ensures that it will of the Iraq War denied the United States remain the world's leading nation for the legitimacy of international approval, decades to come. But current power substantially raising the economic and asymmetries will inevitably diminish in political costs of the war. Allies bore 90 the years ahead. The European Union's percent of the costs of the Gulf War, but wealth already rivals that of the United the American taxpayer has financed most States, and it may well forge a more inde- of the current operation, and Washington pendent and unified security policy as this has been unable to convince key allies to decade proceeds. Over the course of the send troops to Iraq. If the United States next decade, Japan may tire of always fol- continues on its current course, it will lowing America's lead, China will emerge enjoy military supremacy, but little else. as a major power, and Russia, India and Brazil are poised to become stronger and ROM THE perspective of lib- more assertive players. It will be impossi- eral realism, management of ble for the United States to sustain cur- Fthe global balance of power rent power asymmetries. Indeed, if would be based on three propositions. America seeks to preserve unipolarity and First, the United States must wield its its attendant sway over global affairs, it superior strength in concert with others will only ensure that other centers of to ensure that it forestalls rather than power, as they rise, array their strength invites balancing behavior. Re-establishing against the United States. America's bona fides as a benign hegemon Einally, the Bush Administration has necessitates resuscitating the alliances, overestimated the advantages of mihtary institutions and consultations that have superiority and mistaken brute strength eroded under Bush's watch. The United for influence, producing adverse conse- States should of course reserve the right to quences on a number of fronts. In Iraq, act alone as a last resort, but Washington Washington was correct that Saddam must rediscover that the costs of unilateral Hussein's regime would crumble under action usually far exceed the costs of seek- the U.S. onslaught, but it failed to appre- ing consensus. ciate that the invasion would spawn a dan- Second, liberal realism entails moving gerous mix of nationalism and religious with—rather than against—the secular extremism, leaving the United States diffusion of global power. The scope of struggling against a guerrilla insurgency American primacy will wane as this centu- that effectively neutralized America's mili- ry progresses; the ultimate objective tary might. In similar fashion, the Bush should be to channel rising centers of Administration is aware that its unilater- strength into cooperative partnerships alist bent has provoked anti-American with the United States. Furthermore, sentiment in many quarters, but it has strength elsewhere, even if it comes at the discounted the discontent because coun- expense of America's relative power, need tries opposed to U.S. policy do not have not come at the expense of its influence the military wherewithal to stand in and security. If rising centers of power are America's way. integrated into a rule-based order, they Although it is correct that other promise to be net contributors to interna- countries are not forming alliances against tional stability. Americans would benefit the United States, Washington is over- substantially from a Europe that is capa- looking the more subtle forms of balanc- ble of projecting power outside its neigh- ing that are occurring—with potent borhood and sharing risks and responsi- geopolitical consequence. The broad bilities with the United States. China is

40- -The National Interest—Fall 2004- emerging as one of Asia's dominant states; America's "war on terrorism" and the what is in question is not whether its "conflict between good and evil." The power will rise, but the ends to which it Bush Administration's overhaul of grand will use its growing strength. strategy included formal endorsement of Third, liberal realism rests on a multi- the notion of pre-emptive—or more dimensional understanding of power, sen- accurately, preventive—war, which it sitive to the fact that America's military acted upon in attacking Iraq in 2003. supremacy, although a vital element of Whereas the Bush Administration has national strength, is not sufficient to safe- been right to focus the country's attention guard American security. The United on the threats posed by terrorism and States should continue to invest in its WMD, it has overreached in making armed forces and maintain its pronounced efforts to combat these threats America's military advantage, but absent respect for consuming mission. The fight against U.S. leadership abroad, U.S. primacy Islamic extremists should be added to the does more to divide the world than to list of more traditional priorities, not unite it. Washington needs to renew the come at their expense. The Bush non-military dimensions of its global Administration believes that the interna- influence, working to reclaim its moral tional system has changed much more authority abroad and to make disaffect- than it has, embracing a distorted world- ed allies again feel like stakeholders in view that has spawned a grand strategy the international system. marred by excess. Several adverse consequences have The International System & Terror followed. To begin, U.S. policy now emerges from a conceptual template that HE TERRORIST acts of is not shared by most other nations of the September 11 necessitated a world. The events of 9/11 shocked many Tfundamental reorientation of countries, but their world-views did not U.S. grand strategy. A grievous attack undergo a transformation anywhere near against the United States came from as profound as the one that has taken unexpected quarters using unexpected place in the United States. The conceptu- means; neutrahzing Al-Qaeda and com- al gap that has opened up between U.S. bating Islamic extremists became top policymakers and their counterparts national priorities. Amid the ongoing abroad has contributed to the geopolitical effort to adapt U.S. policy to unconven- divide that now separates the United tional threats, policymakers and scholars States fi"om many of its traditional allies. alike must continue to address whether The Bush Administration has also the events of 9/11 fundamentally altered unwittingly advanced some of the objec- the international system, requiring not tives of Islamic extremists by overreacting just adjustments to national strategy, but and pursuing an errant strategy that has complete transformation. ^ polarized global politics. The Atlantic The Bush Administration has taken a Alliance has been stretched to the break- definitive position on this question, ing point, with America's traditional embracing the effort to combat terrorism democratic allies now some of its as America's defining mission for the fore- seeable future. From the administration's 'See Philip Zelikow, "The Transformation of perspective, the globe's geopolitical land- National Security", The National Interest scape has been reconfigured. Countries (Spring 2003); and "One Year On: A are "with us" or "with the terrorists" September 11 Anniversary Symposium", The depending upon where they stand in National Interest (Fall 2002).

J^iberal Realism- .41 staunchest critics. The Iraq War and the against the Taliban and Al-Qaeda in bungled occupation that followed have Afghanistan enjoyed widespread support, brought new recruits to Al-Qaeda and even in the Muslim world. galvanized popular sentiment in the In this respect, a Democratic foreign Middle East against the United States. policy should support Iraq's transition to The war itself was the product of excess but also limit the continuing and error—sloppy intelligence, faulty cost of the occupation in U.S. lives, judgment and ideological zealotry. So too money and reputation. At the same time did it reflect skewed priorities, with that Washington secures more help from remaining Al-Qaeda cells, weapons pro- its allies, it should expedite efforts to hand grams in North and Iran, and over security matters to a reconstituted nuclear material in the post-Soviet space Iraqi army—even if that means settling posing much greater threats to U.S. secu- for less than immediate democracy. In rity than did the regime of Saddam general, the United States should contin- Hussein. Simply put, "clear and present" ue to encourage and facilitate the promo- ought always to outweigh "grave and tion of democracy abroad, but it must gathering." realize that durable liberalization must come from within and not be imposed OMBATING terrorism and from the outside. the spread of WMD would Third, a Democratic foreign policy C remain central to a Democratic would acknowledge that the Bush alternative to the Bush strategy, but liberal Administration was right to insist that realists would pursue these goals through new threats may at times require the pre- more considered means. ventive use of force. However, it should First, Washington must embrace a lead multilateral efforts to forge new rules strategy for combating terrorism that suc- of the road governing the use of force ceeds in keeping intact America's key rather than pre-emptively announce its partnerships. All components of the right to wage preventive war. Moreover, struggle against terrorism—including the United States should pursue the pre- military operations, intelligence sharing, ventive use of force only as a last resort, asset freezing and law enforcement—are only when facing "clear and present dan- more successfully pursued if the United ger", and only after full consultation with States has its allies by its side. Achieving other democratic nations. this goal will mean giving up a black-and- Fourth, a Democratic foreign policy white world-view defined by the terrorist should place much greater emphasis on threat and making U.S. policy more preventing the spread of materials used in responsive to the concerns of allies. An the production of nuclear weapons. alliance has meaning only when its mem- Doing so entails expending more effort bers adjust their policies to take into and money to ensure the security of account their partners' interests. nuclear materials in the former Soviet Second, Washington would focus on Union. And Washington should act on the concrete threats to the United States the reality that the United States has no posed by Al-Qaeda and other extremist choice but to engage in tough-minded networks and not be distracted by wars of diplomacy to neutralize—and not merely choice, such as Iraq. Doing so would not "contain"—the threats posed by nuclear only advance efforts to neutralize Al- programs in Iran and North Korea. Qaeda, but also help maintain the inter- Fifth, presidential leadership will be national legitimacy of U.S. leadership. It needed to advance efforts to enhance is important to keep in mind that the war homeland security. Reforming the inteUi-

42. -The National Interest—Fall 2004- gence community and improving commu- At best, treaties and multilateral agree- nication among the intelligence agencies ments enhance the conduct of American and the FBI are particularly important. So foreign policy only at the margins. At too are efforts to expand border control worst, they threaten to deny the United and surveillance and to step up inspection States its sovereignty and freedom of at ports, especially those that serve as action. In contrast, liberal realists see hubs for container traffic. rules and institutions as the infrastructure Sixth, liberal realists would step up of the international system and therefore efforts to secure a lasting peace in the central to the pursuit of America's global Middle East and serve as an even- interests. handed mediator between Israelis and According to the Bush Administration Palestinians. Ensuring the security and and its supporters, the United States in prosperity of Israel is a must, but these the 1990s was ensnared in a network of objectives will be most durably achieved if "global governance" initiatives, with for- they are part of a two-state solution that eign powers seeking to cage American fulfills the national aspirations of the power in international treaties and insti- Palestinians. To move in this direction tutions. The "new unilateralism", as and mobilize the strong majority in Israel Charles Krauthammer has labeled Bush in favor of such a settlement, Washington foreign policy, is aimed at restoring must work with its partners in Europe America's freedom of action and the pri- and the Middle East to neutralize macy of American national interests: Palestinian extremist groups and end ter- "Rather than contain power within a vast ror attacks against Israeli targets. web of constraining international agree- Finally, a Democratic foreign policy ments, the new unilateralism seeks to should do more to get at the causes of strengthen American power and instability and disaffection in the develop- unashamedly deploy it on behalf of self- ing world. The Bush Administration defined global ends."^ deserves credit for its Millennium This stance taps into a traditional Challenge Account, its efforts to fight American aversion to international insti- HIV/AIDS and its Broader Middle East tutions based on concern that they Initiative, aimed at putting in place the infringe on the nation's sovereignty. To building blocks of democracy and civil bind the United States to other countries society in the region. Follow-on initia- through treaties and agreements reduces tives should include doing more to ensure the ability of the American people to universal basic education and to eliminate exercise popular sovereignty. When global tariffs on agriculture and textiles, a President Bush indicates—as he did in his move that would do much to stimulate 2004 State of the Union address—that growth in the developing world. "the United States does not need a per- mission slip to take action to defend itself", he draws on a populist view that The Role of International Rules ir America alone has the right to make deci- Institutions in Maintaining Order sions about its security and well-being HE BUSH Administration and that it is the patriotic duty of U.S. and liberal realists embrace leaders to resist the efforts of foreigners Topposing views of the role and usefulness of international rules and ^Krauthammer, "The New Unilateralism", institutions. The Bush Administration Washington Post (June 8, 2001). See also his tends to see international rules and insti- "The Unipolar Moment Revisited", The tutions as constraints on American power. National Interest (Winter 2002/03).

-Liberal Realism- -43 to subvert this sovereign right. presents itself to the world as a "norm The discomfort of conservatives with buster"—a state that does not respect or international institutions and binding abide by international rules and norms— agreements is most evident when it comes it will have no credibility when it asks to the use of force. While liberal realists other states to do so. The Abu Ghraib are by no means willing to give up prisoner abuse scandal is illustrative. The America's sovereign right to the unilateral mistreatment of Iraqi prisoners, along use of force, conservatives are much more with a Justice Department memorandum reluctant to take decisions concerning the asserting that the U.S. president in a time use of force to multilateral frameworks of war is not bound by international con- such as the UN or NATO. When Secretary ventions that ban torture, sends a danger- of Defense Donald Rumsfeld stated that ous signal to the world—particularly the "mission determines the coalition", he when Washington exhibits a broader was offering a minimahst view of alliance antipathy toward international laws and obligations. The United States wants agreements. America's moral authority is allies, but only if its security partners fol- compromised, and its call for respect of low Washington's lead and are useful for human rights rings hollow, leaving the tasks at hand. The NATO alliance or American citizens and soldiers exposed the bilateral security pacts in East Asia are when on foreign territory and setting seen purely in instrumental terms and not back efforts to extend the rule of law as expressions of a wider political partner- abroad. ship with deep reciprocal obligations. In contrast, liberal realists see rules and institutions as a powerful tool, multi- OR LIBERAL realists, this plj^ing American power in many ways. At approach is extraordinarily major historical junctions—particularly Fshortsighted. The Bush Admin- during the decade after 1945—the United istration's attitude toward alliances has left States built order and created a favorable the United States with a paucity of securi- international environment for the pursuit ty partners. Washington snubbed NATO's of its interests through the construction offer of help in the Afghan War and vio- of multilateral institutions and pacts. A lated alliance norms of reciprocity and rules-based international system empow- consultation in the run-up to the Iraq ers rather than constrains the United War. As a consequence, allies willing to States by structuring bargains that benefit help with postwar reconstruction have both the mighty and the meek. By getting been in short supply, leaving U.S. forces other states to operate within a set of exposed and overextended. There is a sec- multilateral rules and institutions, the ond cost to Rumsfeld's "coalitions of the United States reduces its need to continu- willing" formulation. Other countries ously pressure and coerce other states to might join an American-led military oper- follow America's lead. Weaker states, ation, but without a treaty commitment enticed by mutually acceptable rules of or other institutional framework for the game and a more predictable ongoing security cooperation, some may America, willingly work with the United lose interest. Indeed, Spain decided to States rather than resist or balance against withdraw its troops from Iraq after the it. The United States does accept some change of government in March 2004, restrictions on how it can use its power, and the Philippines followed suit in July but in doing so, it increases its influence to ensure the release of a citizen held by striking consensual bargains to ensure hostage by extremists. the cooperation of other states. The rules More generally, if the United States and institutions that are created serve as

44- .The National Interest—Fall 2004- an "investment" in the preservation of to the attainment of America's global America's power advantages—something interests. The guiding rule of thumb for that is particularly important today as the Washington should be: "with others country prepares for a more diffuse distri- whenever possible, alone only when nec- bution of global power. In the long run, essary." the costs of reaching consensus are far outweighed by the gains.' The Importance of Legitimacy Rules and institutions also advance U.S. interests in ways that are indepen- HE legitimacy of America as dent of their specific functions. This is a global power rests on the particularly true of America's alliance Tability of the United States to partnerships, NATO most of all. The command the respect of other countries. American commitment to Europe and the When others see the United States as a wider security cooperation fostered by the force for good in the world—exercising alliance have been about more than just power according to widely embraced collective defense. The Atlantic Alliance principles and norms—America enjoys is not only a tool to deploy power, but international legitimacy. American legiti- also a "zone of peace" that rests on a macy arises from the country's ability to shared political identity and anchors the convince others that it pursues collective international system. As such, the Bush interests, not just national ones, that its Administration's view that alliances actions are justified and justifiable, and should give way to "coalitions of the will- that it is a progressive force in history ing" is to diminish the deeper logic of and a model for others. Legitimacy mat- America's postwar approach to interna- ters because it is the "social capital" of tional order. There will certainly be cir- the international system, the normative cumstances when the mission should consensus that binds states together and determine the coalition, but consensus generates the trust and respect needed within the Atlantic community and to tame anarchy and enable cooperation preservation of that community should be to fiourish. fundamental American objectives. The Bush Administration, guided by Finally, liberal realists appreciate that four convictions, has been consistently dis- extensive international cooperation is missive of considerations of international essential to countering the threats and legitimacy. First, it rejects the notion of capitalizing on the opportunities that lie "international community" and discounts before the United States. Contemporary the relevance of communal norms and national security threats render go-it- legitimacy in shaping international politics. alone strategies obsolete. The looming Because the Bush team resides in a world dangers of today and tomorrow, such as in which the international system is transnational terrorism and the prolifera- defined by the logic of the balance of tion of WMD, can be effectively countered power, it concentrates on deploying rather only through extensive forms of coopera- than legitimating power, overlooking the tion. The use of force may be a necessary important effects of legitimacy on how tool on occasion, but the longer-term others react to American leadership. agenda for coping with terrorism and weapons proliferation entails intelligence a full explication of this argument, see G. gathering and sharing, law enforcement, John Ikenberry, After Victory: Institutions, state building and multilateral sanctions. Strategic Restraint, and the Rebuilding of Order is not an end in itself After Major War (Princeton, NJ: Princeton and is not always appropriate, but it is key University Press, 2001).

-Liberal Realisvt- -45 According to a February 23, 2003, article the nobility and righteousness of in the New York Times, as Bush prepared American action. As a result, differing for the Iraq War, he responded to over- opinions, regardless of their merit, are whelming popular opposition abroad by often disregarded. Prior to the Iraq War, stating that he did not intend "to decide France and Germany were making what policy based upon a focus group." To act proved to be exceedingly accurate argu- against the court of world opinion, howev- ments about the consequences of war— er, is not just to ignore a "focus group." It but Washington dismissed them out of is to jeopardize America's ability to com- hand as duplicitous, intended only to trip mand respect abroad. up U.S. diplomacy. Likewise, excessive To its credit, the Bush Administration confidence in the global appeal of the did try to garner international support American way contributed to the adminis- for invading Iraq, making its case to the tration's naive assumption that U.S. troops UN Security Council in September 2002. would be greeted with glee by the Iraqi But it went to the UN to get a blessing people. Indeed, the administration's failure for war—rather than engage in a good to grasp the importance of legitimacy in faith effort to find a mutually acceptable political life is at the heart of why the solution. More generally, the Bush occupation of Iraq has been so troubled. Administration has been more eager to Finally, the Bush team believes that to send a signal that America will steadfastly be overly concerned with the opinion of pursue its own interests than to reaffirm other states is a dangerous sign of weak- its commitment to international rules and ness. Simply put, legitimacy is for wimps. norms. America must be willing to use its power Second, the Bush Administration assertively to advance its own interests. beheves that legitimacy begins and ends at Administration supporters endorsed the home. It emerges from the consent of war in Iraq in part to restore a healthy U.S. citizens and their representative fear of American power. In a March 23, institutions, making it inappropriate for 2003, op-ed in USA Today, Max Boot the opinions of others to impinge on argued that the invasions of Afghanistan America's own will. Prominent adminis- and Iraq "provided a vital boost for U.S. tration officials have repeatedly embraced security, not only by routing the terrorist this truncated notion of legitimacy when network, but also by dispelling the myth arguing that the United States need not of U.S. weakness." seek the consent of other countries before acting. In remarks delivered to the HE BUSH Administration's Federalist Society in November 2003, disregard for legitimacy has Undersecretary of State John Bolton con- Thad devastating consequences tended, for America's standing in the world, par- ticularly among Europeans. The country the question of legitimacy is frequently raised that for decades was seen to be at the as a veiled attempt to restrain American dis- forefront of progressive change is now cretion in undertaking unilateral action. . . . regarded as a threat to the international Our actions, taken consistently with system. During the heyday of American Constitutional principles, require no separate, legitimacy amid the , it would external validation to make them legitimate. have been unthinkable for a German chancellor to rescue his bid for re-election Third, the Bush Administration by insisting that Berlin stand up to embraces a brand of American excepdon- Washington. Not only did Gerhard alism that places excessive confidence in Schroder do so in 2002, but candidates in

46- -The National Interest—Fall 2004- other countries—Spain, Brazil and South dramatic initiative to repair the Atlantic Korea—have thrived by distancing them- Alliance. This effort might initially entail selves from the United States. In a world a revised Atlantic Charter, followed by of degraded American legitimacy, other new institutional commitments to consul- countries are more reluctant to cooperate tations and joint planning. with the United States. Over the longer term—and in a thousand different ways— countries will take steps to separate them- Deficits, Trade

-Liberal Realism. .41 buildup, resulting in the largest fiscalan d safety net at home. Unemployment insur- current account deficits in American his- ance, worker retraining, and other govern- tory. An expected surplus of $5 trillion ment provisions of support remain essen- over the next decade has turned into an tial for advanced democratic societies to expected deficit of $5 trillion. This fail- operate in an open global economy. ure to maintain fiscal discipHne compro- The United States must return to the mises the long-term health of the nation- fiscal discipline of the Clinton years. If al economy by putting pressure on inter- America needs new expenditures to com- est rates and cutting into future growth, bat terrorism, then the country must pay and it exacerbates .^Wierica's position as a the bill. Whether one supported or debtor nation. The trade imbalance has opposed the Iraq War, it is profoundly contributed to the soaring current irresponsible to put the costs on a nation- account deficit, leaving the United States al credit card, leaving the charges to ever more dependent on imports of capi- future generations. Although running tal, especially from Japan and China. deficits does represent a sound short-term America's twin-deficits are creating strategy for stimulating growth, the imbalances that imperil the nation's Reagan era made clear the long-term economy, leave the United States vulner- downside of mixing tax cuts with spend- able to unforeseen changes in capital ing increases. In contrast, the record of fiows, and compromise its ability to pro- the 1990s demonstrates that sound fiscal vide international economic leadership. policies represent the best path to long- Finally, the United States remains term growth. In addition, bringing down dangerously dependent on Middle East the deficit in the medium term and other oil, the cost of which has soared recently. signs of fiscal responsibility make it much The Bush Administration's main response more likely that the United States will has been to increase exploitation of remain an attractive market for foreign domestic oil reserves, deepening rather investment. than limiting reliance on fossil fuels. The United States also needs to The global economy may remain on decrease dependence on Middle East oil. an even keel, but in the absence of strong This historic commitment should be built American leadership to maintain stability on two main initiatives. First, Washington and openness, the system is far more vul- should seek reductions in domestic oil nerable to financial crisis and protection- consumption, primarily by substantially ism. Furthermore, it is imprudent to run raising the fuel efficiency of automobiles. up such high levels of foreign debt, Second, the public and private sectors putting too much of America's economic should team up to develop alternative future in the hands of others. energy sources, limiting America's geopo- litical exposure in the Middle East, hedg- DEMOCRATIC foreign poli- ing against the economic risks of high oil cy would entail commitment to prices, and investing in the well-being of Afree trade in practice and not the global environment. just in name, coupled widi domestic mea- sures to soften the impact of globalization Reclaiming Leadership on the American worker and to include labor and environmental standards in HE EVOLUTION of the trade agreements. It is worth remember- international system has ing that behind the post-World War II Treached a critical intersection. decision to construct a free-trade system Absent the hberal brand of U.S. interna- was a commitment to providing a social tionalism around which the post-World

48- .The National Interest—Fall 2004- War II order took shape, that order is for this worrisome state of affairs, but so currently at risk. The preservation of an are the policy choices of the Bush Atlantic zone of stable peace—the estab- Administration. Reclaiming liberal real- lishment of which is perhaps the greatest ism in the United States requires not just achievement of the 20"^^ century—is in elected leadership intent on doing so. It question, with balance-of-power dynam- also requires the rejuvenation of the ics returning to relations between the bipartisan coalition behind liberal inter- United States and Europe. The institu- nationalism that was forged by President tional infrastructure central to managing Franklin Roosevelt during World War 11 the international system is eroding. and sustained by successive administra- Perhaps most worrisome, the United tions through the 1990s. Moderate States, the nation whose dominating Democrats and Republicans must again power makes it indispensable to the come together to enable America to preservation of international stability, has embrace the centrist brand of global compromised its legitimacy in the eyes of engagement that served the nation and the world. the world so well over the course of the The unpredictable march of history— last five decades. If the Democrats are to in particular, the end of the Cold War and repair a divided world, they must begin by the attacks of 9/11—is in part responsible repairing a divided nation, a

.The Albright Doctrine Revisited.

[Ijf we have to use force, it is because we are America; we are the indispensable nation. We stand tall and we see farther than other countries into the future, and we see the danger here to all of us. I know that the American men and women in uniform are always prepared to sacrifice for freedom, democracy and the American way of life. —Madeleine Albright, The Today Show, NBC, February 19, 1998

-Liberal Realism. .49