Is Taiwan the Next Hong Kong?
China Tests the Limits of Impunity
The world does not need to be reminded that it exists in a formal state of anarchy. There is no international government. Nor is there sufficient interdependence or division of labor among states to transform international relations into a social system akin to domestic affairs. Under prevailing circumstances there are only three methods by which that anarchic system can be regulated or prevented from lapsing into chaos: the traditional balance of power; nuclear deterrence; and rule by a central coalition. Each system has been employed at different times during the last two hundred years.
The balance of power held sway during most of the nineteenth and the first part of the twentieth century. It was an inefficient mechanism at best, providing no automatic equilibration of power relationships. It also gave rise to both world wars this century. Under this system nations found it difficult to respond credibly to an aggressor state. While the balancing system aimed to restrain conflict, it did not fully control the aggressive policies of major nations.
Deterrence, used during the period of bipolarity from 1945 to 1989, was more successful. Through the threat of nuclear retaliation the system constrained the behavior of the two superpowers. With forces stationed in other countries the great powers largely solved the chronic problem of credibility of engagement that had beset the nineteenth?century balance. But deterrence was an expensive and tension?laden system. Major wars were prevented only through recurrent crises of resolve, such as Berlin, Cuba and the Yom Kippur War. Nuclear weapons were never used in anger, but the world veered uncomfortably close to the brink from time to time.
The arms race also involved the expenditure of about $500 billion per year by the Soviet Union and United States alone. The opportunity costs of such staggering sums prevented the so?called superpowers from dealing effectively with domestic social problems, as well as denying them rapid and continuous economic growth. Like seventeenth?century Spain, the U.S.S.R. and the United States armed themselves into virtual economic stasis, while other powers proceeded to make unparalleled gains.
The third organizing method, rule by a central coalition, has existed only briefly and episodically in the past two centuries, but it is by far the most efficient peacekeeping device. In the nineteenth century the Concert of Europe functioned effectively from 1815 to 1822, and desultorily thereafter. Post?Napoleonic France was allowed to rejoin Britain, Russia, Austria and Prussia, and agreement among the five great powers provided a short period of direction for domestic as well as foreign affairs. After World War I the League of Nations Council briefly received international attention and obedience. But hampered from the outset by the absence of the United States, after 1924 it was no longer able to guide national or international policy.
Today the breakup of the Soviet Union, the liberation of eastern Europe, the Gulf War and the rapprochement between the United States and Russia have lent the world a new concert of powers. Five great bases of power again control the organization of the world order: the United States, Russia, the European Community, Japan and China. The U.N. Security Council is one manifestation of this new central coalition, which reaches its decisions in great power diplomatic consultations and only then expresses these in the United Nations and other forums.
The present?day situation is both urgent and precarious. While past concerts lingered on for some years, they failed to control events after about a decade. If the new post?Cold War system began in 1989, with the collapse of the Iron Curtain, the world now has about seven to ten years to make it workable and lasting. If this new system is not firmly established within that period, the world order may again lapse into a balance of power or an unworkable multipolar deterrence by the year 2000.
The critical question, therefore, is how long this coalition will last. Its longevity is a matter of greatest consequence: a relapse into a balance of power system, or even a proliferate deterrence, could produce a reversion to violence and the threat of force as chronic components of international relations. Such an outcome would represent a defeat of the most profound hopes aroused in Europe, America and the world since 1945.
Much of the traditional writing on the balance of power glorifies an institution that was phlegmatic and unpredictable at best. Contrary to conventional wisdom, the aggressive French Emperor Napoleon was not brought to heel by a rapidly organized and powerful countercoalition. Rather he defeated one opponent at a time and then (with the exception of Great Britain) co?opted each into the French system of empire.
In 1812 Napoleon decided to attack Russia. An effective coalition began to form against him only after his first defeats in that campaign. In fact the European powers leaned toward his side, or at least toward that of the apparent victor. Such a response was not surprising: in the balance of power system, European nations each waited for the other to take the lead against a disruptive state. Despite celebrations of the balance of power system at the 1815 Congress of Vienna, most European states had propitiated the disrupter—they did not want to challenge a successful aggressor.
When Italy and Germany were unified, the balance was equally somnolent and unresponsive. Italian unification was bound to contribute to the glory of France; it could only come at the humiliation of Austria—Italy’s imperial overlord, France’s premier foe and the major upholder of the Vienna settlement. France defeated Austria in 1859 and then seized Nice: the European powers did nothing.
Stunning Prussian?German gains were also neglected as Germany was unified. Prussia and Austria defeated Denmark while Britain, despite historical commitments to Copenhagen, sat on its hands. Prussia then took on Austria, and again the European powers failed to act. More egregious, Prussia defeated France in 1870?71 without opposition. The powers were languidly considering what they might do in July 1870 when news came of the Prussian victory at Sedan; they quickly and pusillanimously decided to support the winner.
For the next twenty years the European states continued to sustain an overbalance of power under the leadership of German Chancellor Prince Otto von Bismarck. It was not until Kaiser Wilhelm II ascended to the imperial throne in 1890 that a real balance began to form. This was not the result of an overweening reaction against Germany but rather Wilhelm’s own inept casting?off of clients. When in 1890 Germany refused to renew its Reinsurance Treaty with Russia, the tsar turned to France for help against Austria, the traditional Balkan enemy. But even the Franco?Russian alliance of 1894 did not represent a "balance" against Germany, any more than against England. Both France and Russia were eager to expand their colonies at Britain’s expense, and Russia, at least, still eyed the prospect of reconciliation with Berlin. As did Britain: between 1899 and 1901 England repeatedly asked Germany for an alliance and only settled for an arrangement with Paris in 1904 because Berlin was unavailable.
The consolidation of the Triple Entente against the Triple Alliance, therefore, did not make for a solid balance against Germany. The Kaiser and his advisers, like other nineteenth?century military expansionists, adhered to the view that opponents would cave in once Germany made startling new gains. France, then, might be defeated quickly in 1914, as it had been in 1870. Germany thus did not hesitate to force the issue, and the surprise was that Britain did not yield or compromise. Russia also took an unwontedly strong stand against Berlin and was itself responsible for early actions toward partial and general mobilization.
Thus the balance in 1914 did not prevent war; it fomented it. The alliances were neither strong nor credible enough to face down resolute action by the adversary; they were just strong enough to drag reluctant participants into military conflict. Instead of deterring war ex ante, they actually brought it on ex post.
The same result occurred in 1939. Britain and France could not save Poland or Romania when they guaranteed them against German aggression that spring. They could only enforce a guarantee through the military power of Russia—the only nation that could provide defense on the spot. Neither Paris nor London thought they could succeed in a military offensive that would have to bridge the Rhine and smash the German westwall. The Wehrmacht would be too strong. Thus Hitler understandably believed that Britain and France would back down once he reached agreement with Stalin.
There was thus no effective "balance" against Germany that August. It was surprising that Britain and France went to war at all: they could do little unless Hitler decided to attack them. Nor did either have an agreement with the United States, despite President Roosevelt’s occasional musings about how he would save England. Military guarantees and alliances in 1939 did not deter war; again, they merely dragged unwilling participants into it.
In all these major wars it is interesting to note that the aggressor forged the decisive balance against himself, a balance that would not otherwise have been created. Napoleon resolved on the campaign against Russia in 1812; it was not St. Petersburg. Imperial Germany decided in 1917 to wage unrestricted submarine warfare against the United States, and it was Hitler who made the colossal mistake (after inexplicably waiting three days to decide) of declaring war on December 11, 1941, against the world’s strongest power, the United States, thereby sealing his own fate.
The international economic system of the late nineteenth century also made the balance of power function ineffectively. The world economy did not create an interdependence that prohibited war. Links among the major powers (except perhaps those between France and Russia) were tenuous and did not cement relations. For most necessary food and raw materials, trade was directed to less developed areas and colonies. Britain wanted to make its empire a unit largely independent of trade with the rest of the world. Economic relations forged few necessary links among industrial states themselves. Although there was a great deal of trade among Britain, France and Germany, little of it was strategic. Important political leaders in each country instead wished to reorient trade to perpetuate an "imperial federation" or, in the German case, a Mitteleuropa that would exclude or substitute for past economic dependence on other European powers.
In sum, the history of the so?called balance of power is one of either weakness or misperceived strength—of attempts to divert the attention of the aggressor and focus it on another state. It is only occasionally redeemed by strong but vainglorious stands against aggression. As a method of regulating international behavior and conflict, it either did too little or too much, but it did not generally deter hostile political or military action.
Bipolar nuclear deterrence was a more effective but risky and expensive system of conflict control. It remedied some of the deficiencies of the balance of power. Credibility of response to aggression was far greater, partly because the system was bipolar. But its greater effectiveness was also due to ideological differences that created an antagonism not fully sustained in power terms. Given the ideological rift, each power would respond immediately to the actions of the other. In such circumstances the Soviet Union would be opposed even though it was much weaker.
Nuclear weapons added another element of stability. They were employed in the last phase of the Pacific War against Japan, and doctrine held that they would be used again in the event of a Soviet attack on Europe. Perhaps more important, the United States placed forces in the territories of its allies, thereby committing itself in advance to resist. That commitment became very important when the range of Soviet nuclear weapons was extended to include the continental United States.
In contrast nineteenth?century alliances did not station forces in other nations; forces got there only after war began. One wonders whether the Kaiser, Bethmann?Hollweg and the younger Moltke would have been so anxious to begin war at the end of July 1914 had a British expeditionary force already been based on the Marne. Would the Austrian leaders, Conrad and Berchtold, have moved so quickly if Russian forces had been stationed in Serbia?
While the nuclear deterrent system guaranteed some response to aggression, it was not self?operating. Truman and his advisers worried so much about the advent of Soviet nuclear weapons that they spent huge amounts on conventional forces, all in the name of creating credibility. Credibility problems, however, surfaced once again in the Kennedy administration, when it appeared that nuclear weapons might not be employed against certain types of targets or in response to limited Soviet probes. The Defense Department occasionally contended that a Russian conventional attack could be parried by Western conventional forces alone. In this respect the credibility of U.S. nuclear deterrence declined with time and as Soviet forces grew both qualitatively and quantitatively.
It thus sometimes appeared useful for the United States (as well as the Soviet Union) to engage in military ventures to enhance overall credibility. The Soviets thus invaded Hungary and Czechoslovakia and threatened Poland. The United States demonstrated its military resolve by responding to the attack on South Korea and fighting in Vietnam. In 1962 the United States also threatened to intervene in Cuba and in 1973 in the Yom Kippur War. The Soviet Union sent its own forces into Afghanistan and proxy forces to Angola, Mozambique and Ethiopia.
Fortunately U.S. and Soviet forces rarely encountered one another, but there was the episodic possibility that nuclear weapons might be used. Each new American administration was pressed to take a tough line with the Soviets at the outset of its term, to pave the way for later agreements. These early periods could be quite tense. War did not occur, but the world may have emerged unscathed from the machinations of deterrence through a not negligible quantity of good fortune.
Economically the deterrent system paid the public?goods costs of creating an international economy to sustain the Western half of the bipolar order. There was a structural link between the American, European and Japanese economies; the resumption of European and Japanese growth was sustained by sales in the United States. World markets were opened to Japanese and European goods. The Soviet bloc reciprocated and created its own "hothouse" Eastern economy. Sales of poorly manufactured east European wares went to the Soviet Union in return for Soviet exports of raw materials and oil.
Although economic frontiers reinforced military ones and therefore added to unity and credibility, the nuclear deterrent system was beset by high opportunity costs. These, of course, were not reflected merely in excess military spending. The United States sought to organize the Western world politically and economically—as well as militarily—in order to sustain its chain of commitments to allies. It paid the public?goods costs of keeping an open Western and democratic trading system; it encouraged associates to sell their products in the American market.
In that effort the United States fostered European unity and revived the Japanese automotive industry, never considering whether it might be creating a "third force" or opponent among its erstwhile allies. In investing and loaning money overseas, America did not fully realize that eventually it would have to allow foreigners to discharge their debts and finance U.S. investments by selling goods in the United States. All too soon such policy created export surpluses for presumably dependent allies and friends.
At home the familiar litany of the "decline thesis" found application in higher interest rates, low savings rates and mounting government deficits. Industrial productivity and the investment that might have accelerated it lagged. American business did not organize itself for exports. Pressured by new financial criteria and a freshly minted generation of chief financial officers, industry aimed at short?term profits to raise the stock price. Its horizons dipped from five years, to a year, to a quarter.
Investment lagged or was deferred in part because it would not result in an immediate profit on the balance sheet. American competitors had no such restraint. As a result two generations of Americans revelled in excessive consumption while competitors saved and invested. The American grasshopper was increasingly bested by Japanese and European ants. The Soviet Union found itself in far greater straits because of the continuing arms race. But U.S. allies prospered as a result of America’s extremely generous political, military and economic commitments to them.
This problem was no doubt exacerbated by Americans’ own unwillingness to allow their government to save, even if they would not. The government’s failure to save had much to do with continuing $200 billion to $300 billion defense budgets: it was not only social programs that broke the U.S. bank. If economic growth is a function of high productivity, and if productivity results from investment, and if investment only comes from savings (private or public), then high military "dissavings" directly impinged on U.S. growth. Nuclear deterrence, more than forty allies to support and spending on conventional weaponry represented high opportunity costs for the continuing progress and prosperity of the American economy.
Deterrence in short was relatively effective, but also a risky and costly endeavor. Over the long term it probably represented a recipe for American and Soviet decline relative to other nations. And even over the short term it contained manifold contradictions. Only a well?fed, well?housed and well?insured populace would support the free and democratic system against Eastern totalitarianism. But prosperity for U.S. allies was sometimes bought at the expense of economic progress at home.
The operation of a central coalition was fundamentally different from that of the balance of power and deterrence. Members of the Concert of Powers, brought together at the Vienna Congress in 1815 by common interests in the aftermath of a victorious war, sought to enforce and perpetuate their notions of war prevention. They did so successfully for approximately the next thirty years.
Agreement on war causation and prevention welded the great powers together, at least for a time. The European powers fundamentally concluded that the revolutionary social system in Europe (extended to other countries by the military victories of Napoleonic France) had caused war. If they could contain those liberal sentiments and revolutions, they could prevent war. They also reasoned that war itself created the conditions for social dissolution; hence if they could prevent war, they could regulate social change. Performance of the two tasks was self?reinforcing.
The great powers also concurred that the task of war prevention was more important than gains for any one player. Russia thus limited its ambitions in the Near East; a reformed France gave up a policy of military expansion; and Austria under Metternich sought no particular national ambition, only the repose of the system as a whole. As a result there did not have to be a balance of power within the concert; agreement among the major powers made that unnecessary. Moreover the strength of the central coalition attracted strength from outside. Smaller powers could not balance against the great and instead joined them.
Three factors eventually led to the breakup of the central coalition. The first was the abstention and partial isolation of Great Britain, withdrawing from participation in the affairs of the continent and concert. Britain was ready to act against a renewal of aggression from France, but it was not willing to endorse a policy of wholesale concert intervention in the domestic lives of European nations. Conservative though he was, even Lord Castlereagh would not have admitted a foreign right to intervene to change England’s political constitution; he could therefore not agree to intervention in Italy or Greece. His successor, George Canning, was even more isolationist. With the British withdrawal the concert no longer retained the legitimacy or the power to direct political affairs on the continent.
Second, new ideological divisions arose to separate members of the concert. In 1815 the victors were united by a moderate conservatism that harked back to eighteenth?century social and political institutions. With the revolutions of 1830, however, France was once again transformed into a more liberal polity, and the 1832 Reform Act in Great Britain produced far greater middle?class influence in British politics. Thus in the early 1830s, the liberal two (Britain and France) increasingly came to oppose the conservative three (Russia, Prussia and Austria). This alignment was supported by the pattern of the Industrial Revolution—it moved from west to east across the continent, initially separating the two halves of Europe. The resumption of ideological conflict broke the agreement that had united Europe and the concert.
The final quietus of the concert occurred when the revolutions of 1848 and their aftermath proved that war was no longer the automatic result of revolution. More important, in the 1850s nations appeared able to stave off revolution by a policy of quick and efficient use of military force. In the 1860s it became clear that war could actually protect unreformed domestic institutions. Bismarck and the Prussian?German conservatives won a new lease on life through a policy of "blood and iron" enforced against weaker nations. Hence war was no longer the greatest social evil; it could even be therapeutic.
With those three shifts the concert gave way to the balance of power.
The world economic system also failed to hold the political system together. After the onset of the "Great Depression" in 1873, tariffs began to rise and the growth of international trade declined. European colonization resumed with a vengeance, and Britain tried to cultivate its colonies’ markets for industrial products. Vertical trade moved to the forefront; intra?industrial (horizontal) trade, while continuing, had less significance.
After the First World War when the time came to construct a new concert (in the League of Nations), the same three problems had to be overcome. First, war prevention had to be buttressed as a paramount goal, superior to the sectarian national interests of any great power. Second, there could be no breakdown into ideological conflict; this would create a rift among the major powers and reinstitute the balance of power. Finally, no crucial great power could return to a policy of isolation. If so, whatever its moral legitimacy, a concert decision could not be effectively enforced.
All three principles were, of course, rapidly challenged and then overthrown. While war avoidance remained a firm guiding rule for France and Britain, it was not so for fascist Italy or National Socialist Germany. They promptly rearmed and eyed their coveted territorial prizes to the east. Virulent ideological disagreements emerged at the same time, undermining the League Council’s domestic consensus. These transformations were partly the result of the disastrous depression of 1929?39. The economic crisis forced desperation upon hard?pressed but still liberal governments in the 1920s, making them vulnerable to the appeals of either fascism or socialism.
The dissensus was increased by communist control of Russia. It was not just that ideological solidarity was shattered: it was sundered in a way that led to an epic misunderstanding of the policies of the fascist states. America and Britain had been anti?Soviet since 1917, and they expected Russia’s communism to forge a link between Western states and the Italian and German dictators. Even Chamberlain’s appeasement policy was supposed to have the sturdy foundation of common interests with Germany vis?à?vis Bolshevik Russia. The ideological conflict thus misled the Western powers about the identity of the true enemy, and they temporized far too long. The United States did not help.
Finally the absence of America from the still?born League of Nations underscored its impotence. Articles 10 and 16 of the League Covenant could only have been made effective by strong international leadership. If powerful states had been willing to act when one nation violated its covenants, others would have followed. Instead there was no leadership, and the United States nullified its own influence through isolation and then neutrality. The international consensus that seemed to have been forged in 1918 was dissipated as early as 1924. The balance of power was reinstituted, and Britain and France were left on their own.
As in past ages today’s concert rests on acceptance by the major powers of the same three principles: involvement of all; ideological agreement; and renunciation of war and territorial expansion, giving liberal democratic and economic development first priority.
Can the three problems of a concert be solved? One danger is that in the next five years or so three major centers of power may return to a de facto condition of isolation: the United States, Russia and the European Community.
In the United States there is palpable revulsion against further international heroics, not because of failure abroad, as was the case with Vietnam, but because domestic priorities have been so chronically underserved. Homeless people are beginning to populate even suburban streets; the twin problems of crime and drugs have yet to be solved; American education remains ineffective, despite large expenditures. Infrastructure, inner?cities and family solidarity have eroded under the treble impact of luxurious private consumption, foreign imports and a reversal of public spending priorities.
And the recession continues. Fiscal policy is stymied—the government cannot afford to spend more because of its heavily indebted international and domestic position—and monetary policy alone is not doing the trick. America may be lapsing into what Keynes called "underemployment equilibrium"—from which progressive declines in interest rates do not provide rescue. Bankers, fearful of another savings and loan debacle, continue to insist that borrowers have solid collateral. One remembers that lower interest rates have before failed to stimulate industry—in the 1930s. Despite continual interest?rate cuts early in that decade, unemployment in 1936 remained at 16.9 percent. Business confidence was not rebuilt; investment lagged; profits remained low.
Production rises somewhat today, but service trades, housing construction and consumption still trail. Though it increased sharply in the third quarter of 1991, U.S. productivity remains at a historic low. Americans recognize that new and innovative products are too often sturdy outgrowths of foreign technology and industry. Other nations, relieved of the pressures of the arms race, have become trading states, The United States, meanwhile, wallows between economic renaissance and stagnation.
America yearns for a statesman who can set the nation back on a progressive economic track. When that happens, as it eventually must, national security spending will be rationed to a small fraction of its present massive dosage. President Bush’s proposed $50 billion defense cut is merely the beginning of a process to be continued by Congress. The temptation to put American domestic priorities first may well become overwhelming, as it did in the 1920s. It may be accompanied by a disastrous reconcentration on the American umbilicus.
Russia, Ukraine, Belarus and Kazakhstan face far graver domestic and economic crises than the United States. It now appears that Russia may be too hobbled to become the center of a unified economic space of 12 independent republics. There is also the question of whether a single international policy can be maintained at all; the rivalry between Russia and Ukraine poses important economic, military and territorial issues.
Russia will almost certainly seek to dispose of some financial burdens by cutting international commitments, dropping red regimes in Afghanistan and Cuba, and pink ones in Africa. But even so, Russia will not solve the new confederation’s economic difficulties. These will continue to be linked to the need for true privatization and supply?side revolutions in societies long dominated by government ministries and monopolies. Likewise, establishing a private banking system with credit granted on economic, not political, grounds will require a profound reorientation of past practice.
Most important, early convertibility of the Russian ruble (in both internal and external terms) will be crucial to provide incentives for production and consumption. Only a convertible ruble will sop up the huge savings "overhang" and lend incentives for productive work in agriculture as well as industry. Land reform and the breakup of the monopolies enjoyed by collective farms are also required to stimulate demand and to increase production rather than prices.
Russian economic reform will be so onerous and absorbing that a stable and active foreign policy may be precluded in the coming years. Like Tokyo after World War II Moscow may need a period of freedom from international responsibilities in order to reestablish a growing economy. Such internal stresses could almost entirely suppress Russian activity in international relations. Isolationism could occur de facto, if not de jure.
Finally, the European Community may become so preoccupied with its own growing pains—the debates over widening and deepening of EC integration—that it will neglect problems and conflicts beyond its sphere. Yugoslavia is gradually being written off the European agenda; the degree of intervention it demands is too great for European political or economic will. The conflict has thus been dumped in the lap of the United Nations. In the Middle East, Britain and France will continue to exert an influence, but the Community itself will have little to say or do.
It is possible that the EC is entering a stage, not unlike that of the federal United States in the early nineteenth century, in which questions of the accession of new states and territories largely overshadowed foreign policy. America’s "manifest destiny" of westward expansion rested on the suppression of foreign entanglements. Europe’s manifest destiny is eastward expansion. The Community could become so embroiled in the problems of integrating new nations that broader foreign policy is neglected. A move toward greater political unity may paradoxically worsen that outcome: the more concentrated their political and economic union, the less authority member states retain. National foreign policies would lose power and momentum; supranational policy would remain focused inward.
The prospective reanimation of ideological conflict cannot be dismissed either. Under bipolarity and deterrence, sectarian and ethnic nationalism yielded to power imperatives. Ideological conflict only reaffirmed an already existent bipolar split in power terms. With the collapse of that conflict new ideological flowers will bloom, from irredentism in the former Soviet empire to Islamic fundamentalism in the Middle East. Perhaps the dangerous portents of such conflicts have been overstressed, however, because they imbue smaller and less powerful nations. But ideological conflict among the great powers could still occur as well.
The most potent future antagonism the world could witness is a radical division between the United States and Japan. The Westernization of contemporary Japan is as yet incomplete. Beneath the external policy of a Japanese trading state boil nationalist resentments directed at a half century of American tutelage and Western neglect. Japanese nationalism and militarism are bubbling up against the MacArthur?written constitution; contempt for an economically inept America resonates throughout Japanese culture and institutions.
Especially galling to the Japanese has been America’s tendency to consult Japan last among major allies, while Washington insists that Tokyo pay for or participate in American?dictated endeavors. Japanese believe that, while having achieved economic equality or superiority, they are still relegated to second or third place politically. Such U.S. policy may lead Japan to seek the independent military and strategic strength needed to establish a new political identity. A Japanese nuclear deterrent would be directed against no one, but it could be designed to earn the respect and attention chronically lacking from the rest of the world.
If current trends continue, it may not be too long before ideological rationalizations of Confucian strength and vitality are propounded by Japan as antidotes to supposed Western decadence and lethargy.
Under such circumstances maintenance of the territorial status quo could again come into question. Isolation of key participants—the United States, Russia and Europe—could pave the way for a renaissance of expansionist ambitions in other quarters of the globe.
Japan’s past vocation in southeast Asia might again become tempting as economic conflict with the United States intensifies. Burgeoning economic ties in the Asian?Pacific region might tempt Tokyo to forge another "co?prosperity sphere." Japanese economic influence would be stretched into a form of political tutelage or even imperialism.
While such a renewed endeavor would appear quixotic, Japan’s history demonstrates that the nation is sometimes willing to attempt the improbable. Such policy becomes the more credible if partially masked by financial and economic controls that merely "induce" dependent parties to yield resources and territorial demands. The United States once ruled Latin America through its own "dollar diplomacy." It did not always have to employ military force, and Japan would have much less need for overt intervention today.
If not addressed these three problems—isolationism, ideology and pacification—could erode the edifice of a modern concert. With its breakup no coalition would exist to pay the public?goods costs to maintain an open global trading system or to assist developing nations. Greater regionalism would prevail and give rise to a looser, disconnected international system. The great powers would no longer seek to resolve problems on the basis of fundamentally similar ideological and political orientations. Economic differences could widen to political fissures, instead of serving to transcend them. An introverted America would no longer provide essential global leadership. The recrudescence of isolation, the renaissance of ideological conflict and the resumption of territorial expansionism could together end the most hopeful period in the history of modern interstate relations.
All three international systems required the presence of a "threat" to make them cohere. This was most obvious in the balance of power and deterrence systems, but is equally necessary in a concert. Nations need to cooperate against something as well as for something. In the early nineteenth century, it was against the progress of liberalism. During the early period of the League of Nations, it was against nations that violated their covenants. Today, it must be against the threat of global economic breakdown.
It would be ideal if all major powers were in favor of the progress of democracy and liberalism, but that is not the case for mainland China. Still, the threat of a collapse of the international economy would represent a decisive check to the forward progress of all powers, as much to China as Japan. China is today as much resolved on a course of "export?led" growth as was Victorian Britain in the 1840s. In many respects Japan’s dependence on international trade is equally great. Its industrial edifice is twice as large as needed to serve the domestic market.
Even Americans have found that the world economy is critical: they cannot pull out of the recession so long as the rest of the world slumps. Europe’s foreign direct investment, to say nothing of its powerful exports, also depend on an open and progressive world economy. Nor are trading blocs the answer. To be successful they would have to include all the markets, raw materials, energy and technology that powers previously required for their development and growth. History teaches that an open world economy is better, but the 1930s show that it cannot always be guaranteed.
This does not mean that any of these malign evolutions need occur, but they are within the realm of political possibility. The violation of these three principles has operated twice before to limit the scope of a world concert of powers. History does not necessarily repeat, but precedent suggests that a costly, inefficient and conflict?ridden balance of power reasserts itself just when the world’s great powers assume it has been abolished.
The end of the Cold War is in this sense like the end of a military war: it injects relief from international endeavors and renewed internal introspection into the domestic lives of the great powers. In the past nations have lost their sense of prudence and proportion: they have abruptly reversed course time and again. Excesses of international conflict were followed by excesses of domestic introversion; the cooperative necessities of redressing power conflicts yielded to nationalistic and egoistic indulgence. This must not happen again.
Today the most propitious element uniting the world and facilitating the cooperation of a concert is its high degree of ideological agreement. That agreement can only be sustained in liberal, democratic and free?market terms if the world economy permits it to prosper. A world recession or depression breaks the ideological links that have knit nations together. Yesterday’s debtors have to be able to earn credits; yesterday’s creditors must run foreign trade deficits to allow loans to be repaid.
In time Japan must become as public spirited as was nineteenth?century Britain. Great Britain continued to earn a current account surplus up to World War I, but increasingly conceded a balance of trade surplus (in its own market) to borrowers and recipients of English investment. Japan can in the future continue to maintain a favorable current account balance, but it must increasingly become a mature creditor, allowing others to make export gains in the Japanese market. Unless Japan recycles its trade surpluses to others, world economic growth will decline and markets will grow too slowly to absorb products from the former Soviet Union and eastern Europe. And only then will the Third World benefit from a strategy of "coupling" with the Western industrial world, rather than "decoupling."
None of this can take place unless the imbalance between the United States and Japan is redressed. This undoubtedly means that Japan must import more than the present one percent of its automotive equipment from the United States. It also puts a tremendous burden on U.S. political and economic institutions to straighten house. A nation chronically dependent on borrowing the savings of other nations to finance its own development cannot indefinitely sustain itself.
Ultimately what is necessary is a new sense of proportion in the allocation of international and domestic tasks and benefits. Governments and peoples must decide to continue to work on foreign problems, while devoting greater attention to neglected domestic issues. In one sense the two represent competing priorities, but for many purposes they are complementary. The United States cannot ultimately continue to play a large international role if its savings rates and economic growth remain low. Japan cannot continue to export without importing if its foreign customers (because of low growth) cannot afford to buy Japanese goods.
Increases in Japanese consumption of imported goods are therefore not only a key to the solution of other nations’ problems, but also their own. Integrating Russia and its former republics into the world economy is necessary not only to achieve economic growth in Moscow, St. Petersburg and Kiev, but also because only a vibrant Eastern economy can buy Western consumer products. Ideological agreement thus continues to ride not only on a rising, but also more balanced, tide of economic growth for the world economy as a whole.
It is of course possible that this will not occur. It may be easier, politically speaking, for overburdened governments to respect popular wishes and focus largely on domestic tasks. The funds needed to sustain and restructure the Russian economy are, after all, very large. Not only domestic publics but also the Third World will resent the necessary diversion of capital to the East. But ultimately the choice is between offering help or foisting social barbarism on a weakened Russia. If this help succeeds, it will build trust upon which a heightened ideological agreement can be based. If Europe and Japan are drawn in to this historic effort (as they must be), it will forge a linkage between four major centers of power in world politics.
If such cooperation occurs, the balance of power begins to operate in reverse: once a strong central group has been consolidated, others will not try to balance against it; they will be drawn to its core. In this way even China, in time, will become a member of the Concert of Powers, with the Third World next in train. Despite historic precedents, this time the central coalition does not have to collapse.
A central coalition would be a much cheaper international regulatory device than either an inefficient and dilatory balance of power or an expensive deterrence. This is important. It now appears that while American leaders are still willing for the nation to exert itself abroad, intervene in foreign conflicts and give large amounts of foreign assistance, the American public is more reluctant. Only a relatively efficient and cost?effective international order is likely to have U.S. public support over the long term. History may tell little about the future, but it seems to indicate that a central coalition—united by economic interest in a open and growing world economy—is not doomed to fail.