THE SHIELD OF ACHILLES (111 page)
Read THE SHIELD OF ACHILLES Online
Authors: Philip Bobbitt
The staff of The Inquiry was ultimately frustrated in its role. At the Versailles Peace Conference the group was marginalized by the president's isolation and the primacy of more institutional players. In any case, the advice of academics, journalists, and lawyers could hardly have averted the political catastrophe that befell their hopes at the Conference. When Wilson broke with House at the Conference, more was shattered than a remarkable friendship: the American dreams of a nonpunitive peace, of a postwar world order guaranteed by the great powers and built out of the self-determination of national peoples, an economic environment of nondiscriminatory trade practices, a political environment “safe for democracy”—none of this came to pass, in part, but only in part, because the Americans were unable to overcome the mercantile and strategic ambitions of their allies abroad and isolationism and ignorance at home. House wrote, when it was all past, “I wish we had taken the other road… [the peace settlement promised by Wilson to the Germans and to the public].” When the German representatives signed the treaty, the British diplomat Harold Nicholson wrote in his diary, “To bed, sick of life.” Even Lloyd George acknowledged that it was “all a great pity. We shall have to do the same thing all over again [we shall have to fight another world war] in twenty-five years at three times the cost.” John Maynard Keynes, who had been attached to the British delegation, wrote to his mother, “I've never been so miserable… [T]he peace is outrageous and impossible and can bring nothing but misfortune.” The American secretary of state, Lansing, noted his first reactions to the treaty document: “disappointment, regret, depression.”
By contrast, when the Peace of 1990 came to the world all of the great powers knew what must be done. James Baker, who in some ways played the role of Colonel House in a later era as the president's political manager, personal intimate, and international representative, did not need to convene a new version of The Inquiry to determine what the postwar program should be, because it had not essentially changed since Wilson's day. Chastened by another world war, the Cold War, and the nuclear annihilation that threatened them all, the Allies this time did not try to ruin their adversary but endeavored instead to include him in a New World Order. Unlike Lansing, Baker exhilaratedly wrote when he returned from his journey to Paris, “The very nature of the international system as we know it [has been] transformed.”
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With the Peace of Paris, a door closed in human history. The East/West global struggle had divided the whole world as sharply and carefully as Gregory XIII divided the then–New World of the sixteenth century. Now there are many able academics and civil servants working hard on the issue of what sort of new world the twenty-first century will bring into being, and how it will be divided. Surely we need a New Inquiry, for what we need to know is not simply where we are going, but where we are, and, then, where we
can
go. Governments everywhere are floundering with regard to their security policies. Some have pursued consistent policies, only to find that it has been a relentless pursuit of failure, enhanced by an inability to rethink, but when governments have been inconsistent—and no governments have been more so than the United States and Britain—these governments did not find their way to fresh insights, unless it was the insight that the policy that they have just adopted was one they had recently abandoned.
Does this matter? We are in a time of crisis, and must turn our attention to international terrorism. Why should we pursue thought when action is required? Colonel House had to have answers before his war ended; he didn't know it would continue for seventy more years. Now that the Long War is over, and the Peace of Paris signed, and the possibility of a new war looming, why must we urgently undertake a New Inquiry? Because we are daily making decisions that will structure the kinds of opportunities available to us in the future. “Once in a while a door opens,” wrote Graham Greene, “and lets the future in.” This is such a moment.
First there was a god of night and tempest, a black idol without eyes, before whom they leaped, naked and smeared with blood. Later on, in the times of the republic, there were many gods with wives, children, creaking beds, and harmlessly exploding thunderbolts. At the end only superstitious neurotics carried in their pockets little statues of salt, representing the god of irony. There was no greater god at that time.
Then came the barbarians. They too valued highly the little god of irony. They would crush it under their heels and add it to their dishes
.
—Zbigniew Herbert
(translated by Czeslaw Milosz)
THESIS: A NEW SOCIETY OF MARKET-STATES IS BEING BORN.
The challenges facing the society of states are a direct consequence of the strategic innovations that won the Long War. The ways in which the various basic forms of the market-state cope with these challenges will structure the conflicts of a new society. We must act with this development in mind, accepting conflict where it is necessary to avoid cataclysmic war or the breakdown of the global superinfrastructure, and creating institutions that will legitimate the new society of market-states
.
The bomb in the bar will explode at thirteen twenty
.
Now it's just thirteen sixteen.
There's still time for some to go in
,
And some to come out
.
The terrorist has already crossed the street
.
The distance keeps him out of danger
,
And what a view—just like the movies.
A woman in a yellow jacket, she's going in.
A man in dark glasses, he's coming out
.
Teen-agers in jeans, they're talking
.
Thirteen seventeen and four seconds
.
The short one, he's lucky, he's getting on a scooter,
But the tall one, he's going in.
Thirteen seventeen and forty seconds
.
That girl, she's walking along with a green ribbon in her hair
.
But then a bus suddenly pulls in front of her
.
Thirteen eighteen.
The girl's gone.
Was she that dumb, did she go in or not
,
We'll see when they carry them out
.
Thirteen nineteen.
Somehow no one's going in
.
Another guy, fat, bald, is leaving, though.
Wait a second, looks like he's looking
For something in his pockets and
At thirteen twenty minus ten seconds
He goes back in for his crummy gloves.
Thirteen twenty exactly
.
This waiting, it's taking forever.
Any second now.
No, not yet.
Yes, now
.
The bomb, it explodes.
—Wislawa Szymborska
T
HE ECONOMIC ORTHODOXY
of nation-states counseled state intervention in the national economy as a necessary means of achieving growth and other goals. Economic regulation was part of this orthodoxy and fitted the ethos of nation-states that relied so heavily on law. Market-states will have their own economic orthodoxy and their own distinctive tools.
Eventually, all the leading members of the society of market-states may come to accept views similar to these: that capital markets have to become less regulated in order to attract capital investment and that capital has to become more global in order to achieve the maximum returns on investment; that labor markets have to become more flexible in order to compete with other, foreign labor markets and to keep jobs at home that depend upon producing products at a cost that can compete with the products of states that have lower labor costs; that if the world economy is to grow, access to all markets has to be assured and trade has to become less regulated; that a state's trade policy will have to become more free if that state's goods are to be able to penetrate foreign markets and thus participate in this growth; that government subsidies, spending, and welfare programs have to be managed in order to permit more investment in infrastructure and to allow greater private saving (which will lower the cost of investment); and that tax policy has to provide incentives for growth in order to attract enterprise and to maximize innovation and entrepreneurship. Early in the twenty-first century, it seems not unlikely that virtually all major states will accept for themselves the fundamental assumptions that Margaret Thatcher and Tony Blair urged for Britain and that Bill Clinton and George W. Bush urged for the United States, and furthermore that they will accept that if these states do not heed those recommendations, the United States, the United Kingdom, and other states will gain a decisive advantage over them.
If a market-state fails to provide tax incentives for capital formation and capital retention, domestic investment will either not take place or will flee along with foreign investment; if investment goes elsewhere, then innovation and productivity gains will go with it, so that the products that are its result will be cheaper and better than those produced at home; if the products of other states are more competitive, then jobs will be lost to those states; if jobs are lost, then tax revenues will fall, and unemployment and welfare costs will become unsupportable. Ever higher taxes will produce ever lower revenues. The state that resists liberalizing its labor markets in order to protect high-wage jobs will end up with no jobs to protect; the state that resists cutting back on welfare will find it has to cut back anyway when revenues fall and that it now has even larger welfare bills to pay as unemployment climbs; the state that attempts to protect its domestic industries by refusing to liberalize its trade policy will find that those industries are locked out of other markets and in any case are uncompetitive, so that domestic prices stay high and the domestic standard of living falls; the state that tries to restrict capital flight will be shunned, and the state that inhibits capital imports will be ignored. That too will raise the cost of production and depress the standard of living in another turn of this vicious circle. If Mikhail Gorbachev could get this message in the 1980s the secure leader of the richest and most powerful socialist nation in the world—it will not be lost on anyone else.
Moreover, the market-state promises a “virtuous” circle to those states that copy its form and obey its strictures. The privatization of state-owned firms brings immense capital gains to the state as it liquidates vast monopolies; this windfall supplements the savings from cuts in welfare programs and thus lowers deficits, which leads to less inflation, which attracts capital and lowers the borrowing costs required to finance deficits, which in turn lowers the deficits still further, which permits lower taxes, which can produce more savings, which can enable more investment, which produces more funds for research and development, which enhances productivity, which lowers prices thus making exports more competitive, which creates jobs while lowering the cost of living for the consuming public. In the underdeveloped world, such policies mean higher growth owing to comparative wage advantages, which growth leads to a more educated population, which brings more women into the workplace, which leads to lower birth rates, which enhances political stability, which means greater macroeconomic prudence, which leads to more foreign investment, which finances still more growth, which tends to liberalize authoritarianism, which encourages personal autonomy.