Author:
Soros George Topics: Economics / Politics
01.02.2004
We live in an increasingly interdependent world and, due to the progress of
technology, our power over nature has increased by leaps and bounds. Unless we
use that power wisely, we are in danger of damaging or destroying both our
environment and our civilisation.
With US and British troops poised to invade Iraq, the rest of the world is
overwhelmingly opposed. Yet Saddam Hussein is generally seen as a tyrant who
needs to be disarmed, and the UN Security Council has unanimously demanded that
he disclose and destroy his weapons of mass-destruction. What has gone wrong?
Iraq is the first instance when the Bush doctrine is being applied and it is
provoking an allergic reaction. The Bush doctrine is built on two pillars:
first, the United States will do everything in its power to maintain its
unquestioned military supremacy, and second, the United States arrogates the
right to preemptive action. Taken together, these two pillars support two
classes of sovereignty: the sovereignty of the United States, which takes
precedence over international treaties and obligations, and the sovereignty of
all other states, which is subject to the Bush doctrine. This is reminiscent of
George Orwell
’s
Animal Farm: “all animals are equal but some animals are more equal than others”.
To be sure, the Bush doctrine is not stated so starkly; it is buried in
Orwellian doublespeak. The doublespeak is needed because there is a
contradiction between the Bush administration
’s concept of freedom and democracy and American values. America is an open
society, and in an open society people can decide for themselves what they mean
by freedom and democracy.
But the Bush administration claims that we have discovered the ultimate recipe.
The very first sentence of our latest national security strategy reads as
follows:
“The great struggles of the 20th Century between liberty and totalitarianism ended with a decisive victory for
the forces of freedom
– and a single sustainable model for national success: freedom, democracy, and
free enterprise
”.
This statement is false on two counts. First, there is no single, sustainable
model for national success. And second, our model, which has been successful,
is not available to others because our success depends greatly on our dominant
position at the center of the global capitalist system and that position is not
attainable by others.
The Bush administration is dominated by ideologists who ignore one of the
cardinal tenets of the open society
– however powerful you are, you may be wrong.
But President Bush makes absolutely no allowance for the possibility that we may
be wrong and he has no tolerance for dissenting opinion. If you are not with us
you are against us, he proclaims. Donald Rumsfeld berates our European allies
who disagree with him on Iraq in no uncertain terms and he has a visceral
aversion to international cooperation, be it with NATO or UN peacekeepers in
Afghanistan. John Ashcroft accused those who opposed the Patriot Act of giving
aid and comfort to the enemy. These are the views of extremists, not adherents
of an open society. Perhaps because of my background, they push the wrong
buttons in me. And I am amazed and disappointed that the public at large does
not have a similar allergic reaction. Of course that has a lot to do with 11
September.
But the trouble goes much deeper. It is not merely that the Bush administration’s policies may be wrong. It is that they are wrong and I would go even further – they are bound to be wrong because they are based on a false ideology.
The ideology combines market fundamentalism in economic matters and the pursuit
of military supremacy in international relations. These two objectives fit
neatly together into a coherent ideology
– an ideology that is internally consistent but not consistent with reality or
with the principles of open society. It is a kind of crude social Darwinism in
which the survival of the fittest depends on competition, not cooperation. In
the economy, the competition is among firms; in international relations, among
states. Cooperation does not seem necessary because there is supposed to be an
invisible hand at work which will assure that as long as everybody looks out
for their own interests, the common interest will look after itself.
This doctrine is false, even with regard to the economy. I have been at pains to
show that financial markets left to their own devices do not tend towards an
equilibrium that assures the optimum allocation of resources. The theories of
efficient markets and rational expectations don
’t stand up to critical examination.
With regard to international relations, there is the well-known doctrine of
geopolitical realism, according to which states have interests but no
principles, but nobody can question that there are common human interests that
transcend national interests.
We live in an increasingly interdependent world and, due to the progress of
technology; our power over nature has increased by leaps and bounds. Unless we
use that power wisely, we are in danger of damaging or destroying both our
environment and our civilisation. These are not empty words. Terrorism and the
spread of weapons of mass destruction give us a foretaste of what lies ahead.
The need for a better world order predates 11 September but the terrorist
threat has rendered international cooperation all the more necessary.
That is not how the Bush administration sees the world. It believes that
international relations are relations of power. Since we enjoy unquestioned
military supremacy we can impose our will on the world. International treaties
and institutions are unnecessary limitations on our power. Even if the American
public went along with this view, and I don
’t think it should, the rest of the world could never accept it.
That is why there is so much opposition against the war throughout the world.
That is why I shall remain opposed to the Bush administration
’s conduct of foreign policy, even if it succeeds as I hope it will, in disarming
or getting rid of Saddam.
I should like to offer an alternative vision of the role that the United States
ought to play in the world.
I regard the current world order as a distorted form of a global open society.
It is distorted because we have global markets but we do not have global
political institutions. As a consequence, we are much better at producing
private goods than taking care of public goods such as preserving peace,
protecting the environment and ensuring economic stability, progress and social
justice. This is not by accident.
Globalisation – and by that I mean the globalisation of financial markets – was a market fundamentalist project and the US was its chief architect. We are
also the chief beneficiaries. We are unquestionably the dominant power in the
world today. Our dominance is not only economic and financial but also military
and technological. No other country can even come close to us.
This puts us in a position of unique responsibility. Other countries have to
respond to US policy, but the United States is in a position to choose the
policy to which others have to respond. We have a greater degree of discretion
in deciding what shape the world should take than anybody else. Therefore it is
not enough for the United States to preserve its supremacy over other states;
it must also concern itself with the well being of the world. There were great
tensions in the global capitalist system prior to 11 September, but they became
much worse since then. We must work to reduce the tensions and make the system
stable and equitable so that we can maintain our dominant position within it.
That is the responsibility that we fail to live up to. What is worse, the Bush
administration does not even acknowledge that we bear such a responsibility. It
attributes our dominant position to the success of the American model in fair
competition with other countries. But that is a self-deception.
Contrary to the tenets of market fundamentalism, the global capitalist system
does not constitute a level playing field. In economic and financial matters
there is a disparity between the center and the periphery. And in military
matters, there is a disparity between the United States and the rest of the
world because the European Union, as distinct from its member states, does not
even seek to be a military power. There are large and growing inequalities in
the world and we lack the mechanism for reducing them. Therefore we need to
strengthen our international political institutions to match the globalization
of our markets. Only the United States can lead the way because without U.S.
participation nothing much can be done in the way of international
co-operation.
As I said before, we live in a world characterized by global markets, but our
political institutions remain firmly grounded in the sovereignty of states. As
the world becomes increasingly interdependent, a world order based on
sovereignty cannot take care of our common human interests. The main source of
poverty and misery in the world today is bad government
– repressive, corrupt regimes and failed states. And yet it is difficult to
intervene in the internal affairs of other countries because the principle of
sovereignty stands in the way.
One way to overcome the problem is to offer countries positive inducements for
becoming open societies. That is the missing ingredient in the current world
order. There are penalties for bad behavior ranging from International Monetary
Fund (IMF) conditionalities through trade sanctions to military intervention
but not enough incentives and reinforcements for good behavior. A global open
society would achieve certain standards by providing assistance to those who
are unable to meet them. Those who violate the standards can then be punished
by way of exclusion. There would be a better balance between rewards and
reinforcements on the one hand and penalties on the other. In a global open
society every country would benefit from belonging to it. Developing countries
would get better access to markets under the World Trade Organization (WTO);
countries at the periphery, like Brazil, would be assured of an adequate supply
of credit through the IMF as long as they follow sound policies; and there
would be a genuine attempt to meet the UN
’s Millennium goals.
Providing incentives, of course, will not be sufficient to create a global open
society. Not all countries have governments that want or tolerate an open
society. A rogue regime like Saddam Hussein
’s does pose a threat to the rest of the world and a global open society must be
able to defend itself. But military force must remain a last resort and it must
have a basis of legitimacy.
The United States cannot create a global open society on its own. No single
country can act as the policeman or the benefactor of the entire world. But it
cannot be done without American leadership. This means that the United States
must engage in international cooperation. It must be willing to abide by the
rules it seeks to impose on others, accept its share of the costs and, most
importantly, accept that other participants are bound to have different
opinions and other states
– different national interests. This is in accordance with the principles of an
open society and it is not an infringement of US sovereignty, especially as the
United States will always have veto rights due to its weight and importance.
Here is an alternative vision of America’s role in the world. It is the vision of America leading the world towards a
global open society. Such a vision is badly needed because currently there are
no alternatives on offer. After 11 September, President Bush has managed to
persuade the country that it is unpatriotic to disagree with him.
It should be emphasized that the two visions – American supremacy and America as the leader of a global open society – are not that far apart. In fact, they are so close to each other that I am
afraid that when the pursuit of American supremacy fails
– as it is bound to fail – the vision of a global open society will also be abandoned. That is why it is
so important to distinguish between them.
Both visions recognize the dominant position of the United States. Both agree
that the United States has to take an active leadership role in international
affairs; both favour preemptive action. It is when it comes to the kind of
preemptive action that America ought to take that the two visions differ. A
global open society requires affirmative action on a global scale, while the
Bush approach is restricted to punitive action. In the open society version,
crisis prevention cannot start early enough; it is impossible to predict which
grievance will develop into bloodshed and by the time we know, it is too late.
That is why the best way to prevent conflicts is to foster open societies.
The Bush administration also claims to be fostering democracy by invading Iraq.
But democracy cannot be imposed from the outside. I know what I am talking
about because I have been actively involved in building open societies in a
large number of countries through my network of foundations. Speaking from
experience, I would never choose Iraq for nation building.
Military occupation is the easy part, what comes afterwards is what should give
us pause. We shall be greeted as liberators just as we were in Afghanistan, but
the internal tensions and the tensions with neighboring countries like Turkey
and Iran will make it very difficult to establish a democratic regime. To
impose a military regime like General MacArthur in Japan would be courting
disaster.
It would have been easier to achieve success in Afghanistan because both the
Taliban and Al-Qaeda were alien oppressors. But having won a resounding
military victory, we failed to follow it through with nation building.
Secretary Rumsfeld opposed the extension of UN peacekeeping beyond Kabul and as
a result law and order have still not been fully established outside the
capital. President Karzai needs to be protected by American bodyguards. His
government is making slow progress but the historic opportunity to build on the
momentum of liberation was irretrievably lost.
The war with Iraq does not help the building of open societies in other
countries either. In our efforts to gain allies and buy votes in the United
Nations, we have become less concerned with internal conditions in those
countries than we ought to be. This is true of Russia and Pakistan and all the
Central Asian republics, not to mention Angola and Cameroon, which are among
the most corrupt regimes in Africa. To claim that we are invading Iraq for the
sake of establishing democracy is a sham and the rest of the world sees it as
such. The North Atlantic alliance has been severely disrupted and both NATO and
the European Union are in disarray.
Disarming Iraq is a valid objective, but with regard to weapons of mass
destruction, Iraq ought not to be the top priority today. North Korea is much
more dangerous and it has to be said that the current crisis was precipitated
by President Bush. North Korea
’s nuclear program had been more or less contained by the Agreed Framework
concluded by the Clinton administration in 1994. In the meantime, President Kim
Dae Jung of South Korea had engaged in a sunshine policy and it began to bear
fruit.
He came to Washington – he was the first foreign head of state to visit President Bush – and he wanted to enlist the President’s support for the sunshine policy. He had Colin Powell on his side but Bush
rebuffed him rather brusquely and publicly. Bush disapproved of what he
regarded as the appeasement of North Korea and he was eager to establish a
discontinuity with the Clinton administration. He also needed North Korea out
in the cold in order to justify the first phase of the National Missile Defense
program that was the lynchpin in the Bush strategy for asserting American
supremacy. Then came the axis of evil speech and the admission by North Korea
that it had a uranium enrichment program. This was strictly speaking not in
violation of the Agreed Framework because that covered only plutonium
– President Bush cut off the supply of fuel oil. North Korea responded by various
provocations, escalating the crisis to its present level.
As things stand today, North Korea will very soon start producing a nuclear bomb
every month. North Korea is eager for bilateral talks with the United States,
but the United States refuses to give in to nuclear blackmail. The worst of it
is that there has been a serious rift with South Korea and, however unjustly,
South Koreans now regard the United States as much of an aggressor as North
Korea. This renders our position very difficult.
It can be seen that the Bush administration’s policies have brought many unintended, adverse consequences. Indeed, it is
difficult to find a similar period when political and economic conditions have
deteriorated as rapidly. The global economy is in recession, stocks are in a
bear market, and the dollar is in decline. Here at home there has been a
dramatic shift from budget surplus to deficits.
But the game is not yet over. A rapid victory in Iraq with little loss of life
could bring about a dramatic change in the overall situation. The price of oil
could fall, the stock market could celebrate, consumers could overcome their
anxieties and resume spending, and business could respond by stepping up
capital expenditures. America would end its dependency on Saudi Arabia, the
Israeli-Palestinian conflict could become more tractable and negotiations could
be started with North Korea without a great loss of face. That is what the Bush
administration is counting on.
The jury is out. But whatever the outcome in Iraq, I dare to predict that the
Bush policies are bound to fail. The current pursuit of American supremacy
reminds me of the boom-bust process, or a stock market bubble.
Bubbles do not grow out of thin air. They have a solid basis in reality, but
reality is distorted by some misconception. In this case, the dominant position
of the United States is the reality, the pursuit of American supremacy the
misconception. For a while, reality can reinforce the misconception but
eventually the gap between reality and its false interpretation is bound to
become unsustainable. During the self-reinforcing phase, the misconception may
be tested. If the test is successful, the misconception is reinforced. This
widens the gap, making an eventual reversal inevitable. The later it comes the
more devastating the consequences.
This course of events seems inexorable, but a boom-bust process can be aborted
at any stage. And few of them reach the extremes of the recent stock market
bubble. The sooner the process is aborted the better. This is how I view the
Bush administration
’s pursuit of American supremacy.
I firmly believe that President Bush is leading the United States and the world
in the wrong direction and I consider it nothing short of tragic that the
terrorist threat has induced the country to line up behind him so uncritically.
The Bush administration came into office with an unsound and eventually
unsustainable ideology based on a combination of market fundamentalism and
military supremacy. Prior to 11 September, it could not make much headway in
implementing its ideology because it lacked a clear mandate and a clearly
defined enemy. 11 September
changed all that.
Terrorism is the ideal enemy because it is invisible and therefore never
disappears. Having an enemy that poses a genuine and widely recognized threat
can be very effective in holding the nation together. That is particularly
useful when the prevailing ideology is based on the unabashed pursuit of
self-interest. By declaring war on terrorism, President Bush gained the mandate
to pursue his goals that he had previously lacked. The Bush administration is
deliberately fostering fear because it helps to keep the nation lined up behind
the President. We have come a long way from President Roosevelt who said that
we have nothing to fear but fear itself.
But the war on terrorism – which is supposed to include the war on Iraq – cannot be accepted as the guiding principle of our foreign policy. What will
happen to the world if the most powerful country on earth
– the one that sets the agenda – is solely preoccupied with self-preservation? America must play a more
constructive role if humanity is to prosper. In the end, open society will not
survive unless those who live in it believe in it.