Amidst the electoral noise, ranging from Ron Paul's ghost state to John McCain's 100-year long involvement in Iraq, Waving Goodbye to Hegemony, a recent NYTimes piece by PARAG KHANNA, makes for a timely and noteworthy change in perspective. Even though business people are not its main target, they would learn a great many lesson, as well. In fact, the aforementioned article, together with works like The 86 Percent Solution: How to Succeed in the Biggest Market Opportunity of the 21st Century
should give business people plenty of food for thought. Indeed, in a recent LinkedIn Q&A exchange, Steve Terry, President with Triact Associates, had to say the following about the The 86 Percent Solution:
Less Can Be More
So let’s play strategy czar. You are a 21st-century Kissinger. Your task is to guide the next American president (and the one after that) from the demise of American hegemony into a world of much more diffuse governance. What do you advise, concretely, to mitigate the effects of the past decade’s policies — those that inspired defiance rather than cooperation — and to set in motion a virtuous circle of policies that lead to global equilibrium rather than a balance of power against the U.S.?
First, channel your inner J.F.K. You are president, not emperor. You are commander in chief and also diplomat in chief. Your grand strategy is a global strategy, yet you must never use the phrase “American national interest.” (It is assumed.) Instead talk about “global interests” and how closely aligned American policies are with those interests. No more “us” versus “them,” only “we.” That means no more talk of advancing “American values” either. What is worth having is universal first and American second. This applies to “democracy” as well, where timing its implementation is as important as the principle itself. Right now, from the Middle East to Southeast Asia, the hero of the second world — including its democracies — is Lee Kuan Yew of Singapore.
We have learned the hard way that what others want for themselves trumps what we want for them — always. Neither America nor the world needs more competing ideologies, and moralizing exhortations are only useful if they point toward goals that are actually attainable. This new attitude must be more than an act: to obey this modest, hands-off principle is what would actually make America the exceptional empire it purports to be. It would also be something every other empire in history has failed to do.
Second, Pentagonize the State Department. Adm. William J. Fallon, head of Central Command (Centcom), not Robert Gates, is the man really in charge of the U.S. military’s primary operations. Diplomacy, too, requires the equivalent of geographic commands — with top-notch assistant secretaries of state to manage relations in each key region without worrying about getting on the daily agenda of the secretary of state for menial approvals. Then we’ll be ready to coordinate within distant areas. In some regions, our ambassadors to neighboring countries meet only once or twice a year; they need to be having weekly secure video-conferences. Regional institutions are thriving in the second world — think Mercosur (the South American common market), the Association of Southeast Asian Nations (Asean), the Gulf Cooperation Council in the Persian Gulf. We need high-level ambassadors at those organizations too. Taken together, this allows us to move beyond, for example, the current Millennium Challenge Account — which amounts to one-track aid packages to individual countries already going in the right direction — toward encouraging the kind of regional cooperation that can work in curbing both terrorism and poverty. Only if you think regionally can a success story have a demonstration effect. This approach will be crucial to the future of the Pentagon’s new African command. (Until last year, African relations were managed largely by European command, or Eucom, in Germany.) Suspicions of America are running high in Africa, and a country-by-country strategy would make those suspicions worse. Finally, to achieve strategic civilian-military harmonization, we have to first get the maps straight. The State Department puts the Stans in the South and Central Asia bureau, while the Pentagon puts them within the Middle-East-focused Centcom. The Chinese divide up the world the Pentagon’s way; so, too, should our own State Department.
Third, deploy the marchmen. Europe is boosting its common diplomatic corps, while China is deploying retired civil servants, prison laborers and Chinese teachers — all are what the historian Arnold Toynbee called marchmen, the foot-soldiers of empire spreading values and winning loyalty. There are currently more musicians in U.S. military marching bands than there are Foreign Service officers, a fact not helped by Congress’s decision to effectively freeze growth in diplomatic postings. In this context, Condoleezza Rice’s “transformational diplomacy” is a myth: we don’t have enough diplomats for core assignments, let alone solo hardship missions. We need a Peace Corps 10 times its present size, plus student exchanges, English-teaching programs and hands-on job training overseas — with corporate sponsorship.
That’s right. In true American fashion, we must build a diplomatic-industrial complex. Europe and China all but personify business-government collusion, so let State raise money from Wall Street as it puts together regional aid and investment packages. American foreign policy must be substantially more than what the U.S. government directs. After all, the E.U. is already the world’s largest aid donor, and China is rising in the aid arena as well. Plus, each has a larger population than the U.S., meaning deeper benches of recruits, and are not political targets in the present political atmosphere the way Americans abroad are. The secret weapon must be the American citizenry itself. American foundations and charities, not least the Gates and Ford Foundations, dwarf European counterparts in their humanitarian giving; if such private groups independently send more and more American volunteers armed with cash, good will and local knowledge to perform “diplomacy of the deed,” then the public diplomacy will take care of itself.
Fourth, make the global economy work for us. By resurrecting European economies, the Marshall Plan was a down payment on even greater returns in terms of purchasing American goods. For now, however, as the dollar falls, our manufacturing base declines and Americans lose control of assets to wealthier foreign funds, our scientific education, broadband access, health-care, safety and a host of other standards are all slipping down the global rankings. Given our deficits and political gridlock, the only solution is to channel global, particularly Asian, liquidity into our own public infrastructure, creating jobs and technology platforms that can keep American innovation ahead of the pack. Globalization apologizes to no one; we must stay on top of it or become its victim.
Fifth, convene a G-3 of the Big Three. But don’t set the agenda; suggest it. These are the key issues among which to make compromises and trade-offs: climate change, energy security, weapons proliferation and rogue states. Offer more Western clean technology to China in exchange for fewer weapons and lifelines for the Sudanese tyrants and the Burmese junta. And make a joint effort with the Europeans to offer massive, irresistible packages to the people of Iran, Uzbekistan and Venezuela — incentives for eventual regime change rather than fruitless sanctions. A Western change of tone could make China sweat. Superpowers have to learn to behave, too.
Taken together, all these moves could renew American competitiveness in the geopolitical marketplace — and maybe even prove our exceptionalism. We need pragmatic incremental steps like the above to deliver tangible gains to people beyond our shores, repair our reputation, maintain harmony among the Big Three, keep the second world stable and neutral and protect our common planet. Let’s hope whoever is sworn in as the next American president understands this.
Additional material: "Global trends," a McKinsey paper by Ivo J. H. Bozon, Warren J. Campbell, and Mats Lindstrand
should give business people plenty of food for thought. Indeed, in a recent LinkedIn Q&A exchange, Steve Terry, President with Triact Associates, had to say the following about the The 86 Percent Solution:I think the biggest challenge is for product marketing pros in the wealthy nations to get their minds wrapped around the daily concerns of folks with very litte money. Things we take for granted (reliable utilities, quality medical care, cheap transportation) are top-of-mind for the 86% of humanity.And now, here's an excerpt with Parag Khanna's recommendations. See what's in them for you and your business.
If western companies don't change their mindset, or create subsidiaries to address these markets, the consequence is that producers in India and China will clean up. While we may think of China as the manufacturer for the (rich) world, their local talent is better able to imagine and design products for the 86% market than the industrial giants of the west.
Less Can Be More
So let’s play strategy czar. You are a 21st-century Kissinger. Your task is to guide the next American president (and the one after that) from the demise of American hegemony into a world of much more diffuse governance. What do you advise, concretely, to mitigate the effects of the past decade’s policies — those that inspired defiance rather than cooperation — and to set in motion a virtuous circle of policies that lead to global equilibrium rather than a balance of power against the U.S.?
First, channel your inner J.F.K. You are president, not emperor. You are commander in chief and also diplomat in chief. Your grand strategy is a global strategy, yet you must never use the phrase “American national interest.” (It is assumed.) Instead talk about “global interests” and how closely aligned American policies are with those interests. No more “us” versus “them,” only “we.” That means no more talk of advancing “American values” either. What is worth having is universal first and American second. This applies to “democracy” as well, where timing its implementation is as important as the principle itself. Right now, from the Middle East to Southeast Asia, the hero of the second world — including its democracies — is Lee Kuan Yew of Singapore.
We have learned the hard way that what others want for themselves trumps what we want for them — always. Neither America nor the world needs more competing ideologies, and moralizing exhortations are only useful if they point toward goals that are actually attainable. This new attitude must be more than an act: to obey this modest, hands-off principle is what would actually make America the exceptional empire it purports to be. It would also be something every other empire in history has failed to do.
Second, Pentagonize the State Department. Adm. William J. Fallon, head of Central Command (Centcom), not Robert Gates, is the man really in charge of the U.S. military’s primary operations. Diplomacy, too, requires the equivalent of geographic commands — with top-notch assistant secretaries of state to manage relations in each key region without worrying about getting on the daily agenda of the secretary of state for menial approvals. Then we’ll be ready to coordinate within distant areas. In some regions, our ambassadors to neighboring countries meet only once or twice a year; they need to be having weekly secure video-conferences. Regional institutions are thriving in the second world — think Mercosur (the South American common market), the Association of Southeast Asian Nations (Asean), the Gulf Cooperation Council in the Persian Gulf. We need high-level ambassadors at those organizations too. Taken together, this allows us to move beyond, for example, the current Millennium Challenge Account — which amounts to one-track aid packages to individual countries already going in the right direction — toward encouraging the kind of regional cooperation that can work in curbing both terrorism and poverty. Only if you think regionally can a success story have a demonstration effect. This approach will be crucial to the future of the Pentagon’s new African command. (Until last year, African relations were managed largely by European command, or Eucom, in Germany.) Suspicions of America are running high in Africa, and a country-by-country strategy would make those suspicions worse. Finally, to achieve strategic civilian-military harmonization, we have to first get the maps straight. The State Department puts the Stans in the South and Central Asia bureau, while the Pentagon puts them within the Middle-East-focused Centcom. The Chinese divide up the world the Pentagon’s way; so, too, should our own State Department.
Third, deploy the marchmen. Europe is boosting its common diplomatic corps, while China is deploying retired civil servants, prison laborers and Chinese teachers — all are what the historian Arnold Toynbee called marchmen, the foot-soldiers of empire spreading values and winning loyalty. There are currently more musicians in U.S. military marching bands than there are Foreign Service officers, a fact not helped by Congress’s decision to effectively freeze growth in diplomatic postings. In this context, Condoleezza Rice’s “transformational diplomacy” is a myth: we don’t have enough diplomats for core assignments, let alone solo hardship missions. We need a Peace Corps 10 times its present size, plus student exchanges, English-teaching programs and hands-on job training overseas — with corporate sponsorship.
That’s right. In true American fashion, we must build a diplomatic-industrial complex. Europe and China all but personify business-government collusion, so let State raise money from Wall Street as it puts together regional aid and investment packages. American foreign policy must be substantially more than what the U.S. government directs. After all, the E.U. is already the world’s largest aid donor, and China is rising in the aid arena as well. Plus, each has a larger population than the U.S., meaning deeper benches of recruits, and are not political targets in the present political atmosphere the way Americans abroad are. The secret weapon must be the American citizenry itself. American foundations and charities, not least the Gates and Ford Foundations, dwarf European counterparts in their humanitarian giving; if such private groups independently send more and more American volunteers armed with cash, good will and local knowledge to perform “diplomacy of the deed,” then the public diplomacy will take care of itself.
Fourth, make the global economy work for us. By resurrecting European economies, the Marshall Plan was a down payment on even greater returns in terms of purchasing American goods. For now, however, as the dollar falls, our manufacturing base declines and Americans lose control of assets to wealthier foreign funds, our scientific education, broadband access, health-care, safety and a host of other standards are all slipping down the global rankings. Given our deficits and political gridlock, the only solution is to channel global, particularly Asian, liquidity into our own public infrastructure, creating jobs and technology platforms that can keep American innovation ahead of the pack. Globalization apologizes to no one; we must stay on top of it or become its victim.
Fifth, convene a G-3 of the Big Three. But don’t set the agenda; suggest it. These are the key issues among which to make compromises and trade-offs: climate change, energy security, weapons proliferation and rogue states. Offer more Western clean technology to China in exchange for fewer weapons and lifelines for the Sudanese tyrants and the Burmese junta. And make a joint effort with the Europeans to offer massive, irresistible packages to the people of Iran, Uzbekistan and Venezuela — incentives for eventual regime change rather than fruitless sanctions. A Western change of tone could make China sweat. Superpowers have to learn to behave, too.
Taken together, all these moves could renew American competitiveness in the geopolitical marketplace — and maybe even prove our exceptionalism. We need pragmatic incremental steps like the above to deliver tangible gains to people beyond our shores, repair our reputation, maintain harmony among the Big Three, keep the second world stable and neutral and protect our common planet. Let’s hope whoever is sworn in as the next American president understands this.
Additional material: "Global trends," a McKinsey paper by Ivo J. H. Bozon, Warren J. Campbell, and Mats Lindstrand
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Why the US, Europe and China Need a 'G-3'
By Parag Khanna
The current multipolar world resembles a three-legged stool with the United States, the European Union, and China being the dominant "imperial" powers. But only when there exists a viable balance of power can the stool be stable -- and a new global order emerge.
These days it is not fashionable to speak of empires, which are considered to be aggressive, mercantilist relics supposedly consigned to the dustbin of history with post–World War II decolonization and the collapse of the Soviet Union. Many then predicted that ethnic self-determination would drag the world into a new era of political fragmentation as the number of countries proliferated from fewer than 50 at the end of World War II to, potentially, hundreds in the 21st century, with every minority getting its own state, currency, and seat in the United Nations.
But for thousands of years empires have been the world's most powerful political entities, fulfilling people's eternal desire for order -- the prerequisite for stability and meaningful democracy. Rome, Istanbul, Venice, and London ruled over thousands of distinct political communities until the advent of the nation state in the 17th century. By World War II, global power had consolidated into just a half dozen empires, almost all of them European. Decolonization put an end to small nations ruling by force over foreign colonies -- but it did not end empire itself. Empires may not be the most desirable form of governance, given the regular occurrence of hugely destructive wars between them, but mankind's psychological limitations prevent us from doing better. In the 21st century, will we do better than empire?
It is inter-imperial relations -- not international or inter-civilizational -- that shape the world. America, Europe, and China are not only unique empires, they are exceptional in their expansionism. These three powers together increasingly command the world economy, form the largest trading blocs, and set rules for the rest of the world to follow. They lead by example, and by treaty. Each represents its own mode of diplomacy: For America it is coalition; Europe touts consensus; and China's style is consultative. The United States offers military and regime protection and aid; Europe offers deep reform and economic association with its union, and China offers full-service, conditionality free relationships.
But at the same time, it is hard to overestimate the fluidity of the early 21st-century landscape: America vacillates between shunning and embracing the international community, the Chinese politburo remains a black box, and the European Union cautiously exercises strategic leverage. But we must also consider that America may not be able to afford its excessive consumption, nor Europe its expansion, nor China its environmental and social burdens. All three superpowers might retrench if they are unable to maintain present commitments or if blending with their peripheries proves too cumbersome.
Then there are the many swing states of the "second world" that complicate the picture drastically: energy-giant Russia, aspiring India, and technological juggernaut Japan. Beyond these three major states, there are those with a strong anti-imperial mindset. In a world of alignments, not alliances, their imperial networks or spheres of influence increasingly overlap, with other countries multi-aligning: balancing and bandwagoning in order to gain economic assistance from one power, military aid from another, and trade ties with the third. In addition to playing the dominant powers off one another, countries like Venezuela, Iran, Kazakhstan, Libya, and Malaysia will continue to focus as much on building ties among themselves as with Washington, Brussels, or Beijing. Not only will these countries take the best of what each superpower offers to achieve their own vision of success, they will also partner directly with one another in order to extract oil reserves, share intelligence, combat terrorism, reduce poverty, implement capital controls, and build modern infrastructure. They will use their sovereign wealth to buy Western banks, ports, and other strategic assets. Their regional groups will continue to construct their own economic zones, development banks, peacekeeping forces, and criminal courts. Airline connections have sprouted to connect Arabs, South Americans, and East Asians directly to one another.
How will global governance be affected by this unprecedented and complex geopolitical landscape? As America's claims to exceptionalism wane, other powers quite rightly want their place in (or as) the sun, to be the world's Ordnungsmacht. For the first time in history, there exists a multipolar and multicivilizational world of three distinct superpowers competing on a planet of shrinking resources. For each, mere raison d'état has become raison du système: The extension of their core rationality and vision of order constitutes the highest morality. The more America considers itself exceptional, the more its rivals will seek to advance their own exceptionalism at America's expense. China feels it upholds the burden of maintaining tenets of international law like sovereignty and noninterference, while Europe's approach to world order transcends the interstate system altogether. Each in its own way undermines the international architecture of global governance, eroding the fiction that laws and institutions alone can restrain imperial competition.
A Damaged Security Architecture
Institutions of global governance must reflect the underlying geopolitical foundation in order to retain credibility and legitimacy. Other states might have continued to support the imperfect United Nations as a common forum for authoritative global diplomacy if the United States had, but its negligence of the United Nations gave others the excuse to do the same. The United States is more responsible than any other country for creating the post-World War II international architecture, but it is now doing as much as any other country to undermine it. Double standards and legal isolationism have undone America's exemplary record of promoting human rights, and unsanctioned preemptive war has undermined the authority of the UN Security Council. When superpower interests collide, the United Nations has proven to be as catastrophically irrelevant as the League of Nations.
The United Nations only has the power ascribed to it by the dominant states -- and at this point that is very little. The United Nations is not viewed by any of the three superpowers as an overarching governance mechanism but as a forum in which to posture and, most importantly, block the others. It was never a central actor in geopolitical affairs, but instead has always been a stage. The United Nations is a place for consultation and joint declarations, but it is not where decisions are actually made. The United Nations operates at the mercy of the great powers and their budgets. The less they have in common in their approach to the world, the less they will use it. The United Nations has had many major humanitarian successes, from peacekeeping to providing food and medical aid around the world. It has created a democracy fund, increased its peacekeeping forces, and established a human rights council, but its standards for these will only matter where the superpowers do not bother to intervene -- mostly in the Third World.
As stealthy, globalized escalations continue among the great powers undeterred by global governance norms, the potential for conflict grows: resource competition in the Caspian and South China seas, terrorism with nuclear weapons, an attack in the Gulf of Aden or the Straits of Malacca. The uncertain alignments of lesser but still substantial powers such as Russia, Japan, and India could also cause escalation. Furthermore, America's foreign lenders could pull the plug to undermine its grand strategy, sparking economic turmoil, political acrimony, and military tension. War brings profit to the military-industrial complex and is always supported by the large patriotic camps on all sides. Yet the notion of a Sino-US rivalry to lead the world is also premature and simplistic for in the event of their conflict, Europe would be the winner as capital would flee to its sanctuaries.
These great tensions are being played out in the world today as each superpower strives to attain the most advantageous position for itself, while none are powerful enough to dictate the system by itself. Global stability thus rests between the bookends the French philosopher Raymond Aron identified as "peace by law" and "peace by empire," the former toothless and the latter prone to excess.
Historically, successive iterations of balance of power and collective security doctrines have evolved from justifying war for strategic advantage into building systems to avoid it, with the post-Napoleonic Concert of Europe as the first of the modern era. Because it followed rules, it was itself something of a societal system. Even where these attempts at creating a stable world order have failed -- including the League of Nations after World War I -- systemic learning takes place in which states (particularly democracies) internalize the lessons of the past into their institutions to prevent history from repeating itself. The English economic historian Arnold Toynbee viewed history as progressive rather than purely cyclical, a wheel that not only turns around and around but also moves forward such that Civilization could become civilized. Yet empires and superpowers usually promise peace but bring wars.
How Could the Next World War be Averted?
A Tripartite Coalition of Powers
How could the next world war be averted? There does exist a tripartite coalition that could engineer the triumph of globalization over geopolitics: The American working class supports Chinese workers by shopping at Wal-Mart, while its upper class spends on European cars and luxury items; both Europe and China buy American technology; and America's General Motors and Boeing and Europe's Airbus can attribute much of their profits to reduced costs derived from production in -- and sales to -- China. Capital markets allow for endless profit for all rather than a zero-sum competition. Furthermore, the "cult of the offensive" does not dominate military strategy today. In an age of nuclear weaponry, few believe that initiating conflict entails quick victory with minimal loss. Never has historian A.J.P. Taylor's adage been more true: If the goal of being a great power is to be able to fight a great war, the only way to remain a great power is not to fight one. The damage done to oneself through conflict has never been higher than in today's integrated world.
One approach to a solution is to think of the tripolar world as a stool. With two legs it cannot stand long; with three it can be stable. The three-legged US-EU-China stool is currently wobbling, and the new global strategy for the current turn of the geopolitical wheel is "equilibrium." Equilibrium is dynamic, hence more difficult to keep in balance than the unchallenged hegemony of a single hegemon, but it nonetheless represents the next evolutionary stage beyond the laws of anarchy and balance of power. Equilibrium also inspires a more progressive psychology and vocabulary: The "multipolar" order rising powers seek is not the same as the "multilateral" order that is required to manage it in practice. Similarly, the idea of "checks and balances" connotes cautious reaction, while "division of labor" implies positive action toward common ends; "prudence" alone does not fulfill blithely made commitments, but "burden-sharing" could. Peace, justice, and order will only follow from equilibrium.
There is as yet no clear vision for such a global concert of powers or a legitimate global division of labor among the three superpowers—but such multilateralism will be more a matter of imperial coordination than of channeling resources through common institutions. A global strategy of equilibrium would transform the current power transition from a wrestling match of suspicious powers into a team cycling race in which the lead is alternately shared toward the same finish line.
Yet at present the term "international community" is little more than a euphemism for Western dominance. The West can expect no allegiance to a Western order masquerading as representative of global values decreed without global input. America has called on China to be a "responsible stakeholder" in the global system, but because it is implicitly an American order China is naturally resistant to it. China will not exercise its enormous economic weight in the interests of antiquated and unrepresentative clubs like the G-8 that will not even let it in. Similarly, much as the efficacy of the UN Security Council today depends on the United States, the same is becoming true of China, which can also bribe the rotating Security Council members to vote its way. Without a new division of labor, Western institutions will diminish with America's power, leaving only classic geopolitical competition without even the veneer of diplomatic coordination.
Dynamic Equilibrium
Equilibrium requires that the United States, the European Union, and China determine the rules of the geopolitical game together. Much as in a family, equilibrium entails a complex set of codes to domesticate international relations, with compromise a similarly crucial value. The incentives in favor of creating institutions that intentionally diminish one's own power and elevate others are admittedly elusive; egotistical states need to be convinced that they would save costs through collaborations that serve their interests. But America could actually increase its influence if it tempers its power. The path between dominance and retrenchment is the active creation of an "international constitution" with broad allegiance.
Rather than the U.S.-Soviet-Chinese "strategic triangle" of the 1960s and 1970s, a G-3 institution of the United States, the European Union, and China would be the most appropriate forum to establish deeper working relations among the superpowers. By openly discussing specific countries where spheres of influence overlap and contradict one another such as Sudan, Iran, Uzbekistan, and Burma, their differences could be reduced from the strategic to the merely tactical. A broad agenda requiring active Chinese participation could go a long way toward softening Chinese suspicion of the United States and could commit China to pooling resources with its peers. The further down the road one looks, the more global problems revolve around energy resources and fresh water rather than calculations of military power imbalances and territorial rivalry. Yet China's present exclusion from the deliberations of the International Energy Agency fuels its suspicion that there is an "invisible Western hand" keeping global oil prices high. Instead, key energy consumers can focus on bringing more oil to a free market, hence reducing prices, rather than locking in oil contracts with state-owned companies to secure it from others' reach.
America must not only push for a G-3 forum, but must also refashion its own diplomacy from one that speaks only of its own interests to one that genuinely addresses global interests. It cannot convince the world that American-style democracy or democratization are ends in themselves, but it can provide bigger carrots for good and accountable governance. It can resist protectionist pressures and instead strengthen emerging markets that are increasingly America's main sources of corporate profits as well. Rather than lecture about human rights, labor, and environmental standards, it can provide more of the necessary technical assistance developing societies need in order to achieve stability and prosperity.
None of this will happen automatically. Globalization alone will not trump the geopolitical cycles of world war -- this task requires more than a blind belief in rationality. Indeed, history proves that mankind is often anything but rational, and often precisely when the world needs rationality most. Instead, altering our future course demands a mutual understanding among the superpowers and proactive and flexible statecraft to create and maintain stability. A century ago, globalization was defeated by geopolitics, unleashing World War I. The question is whether history will repeat itself a century later. The answer remains unknown, for as the second world shapes both geopolitics and globalization, diplomacy becomes ever more an art.
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