The New Cold War
America, China, and the Echoes of History
In the wake of the Cold War, U.S. foreign policy underwent a profound transformation. Unrestrained by superpower competition, the United States' ambitions spilled over their former limits. Washington increased its military spending far faster than any of its rivals, expanded NATO, and started dispatching forces around the world on humanitarian missions while letting key allies drift away. These trends accelerated after 9/11, as the United States went to war in Afghanistan and Iraq, ramped up its counterterrorism operations around the world, sped up its missile defense program, and set up new bases in distant lands.
Today, however, U.S. power has begun to wane. As other states rise in prominence, the United States' undisciplined spending habits and open-ended foreign policy commitments are catching up with the country. Spurred on by skyrocketing government debt and the emergence of the Tea Party movement, budget hawks are circling Washington. Before leaving office earlier this year, Secretary of Defense Robert Gates announced cuts to the tune of $78 billion over the next five years, and the recent debt-ceiling deal could trigger another $350 billion in cuts from the defense budget over ten years. In addition to fiscal discipline, Washington appears to have rediscovered the virtues of multilateralism and a restrained foreign policy. It has narrowed its war aims in Afghanistan and Iraq, taken NATO expansion off its agenda, and let France and the United Kingdom lead the intervention in Libya.
But if U.S. policymakers have reduced the country's strategic commitments in response to a decline in its relative power, they have yet to fully embrace retrenchment as a policy and endorse deep spending cuts (especially to the military), redefine Washington's foreign policy priorities, and shift more of the United States' defense burdens onto its allies. Indeed, Secretary of Defense Leon Panetta has warned that a cut in defense spending beyond the one agreed to in the debt-ceiling deal would be devastating. "It will weaken our national defense," he said. "It will undermine our ability to maintain our alliances throughout the world." This view reflects the conventional wisdom of generations of U.S. decision-makers: when it comes to power, more is always better. Many officials fear that reducing the country's influence abroad would let tyranny advance and force trade to dwindle. And various interest groups oppose the idea, since they stand to lose from a sudden reduction in the United States' foreign engagements.
In fact, far from auguring chaos abroad and division at home, a policy of prudent retrenchment would not only reduce the costs of U.S. foreign policy but also result in a more coherent and sustainable strategy. In the past, great powers that scaled back their goals in the face of their diminishing means were able to navigate the shoals of power politics better than those that clung to expensive and overly ambitious commitments. Today, a reduction in U.S. forward deployments could mollify U.S. adversaries, eliminate potential flashpoints, and encourage U.S. allies to contribute more to collective defense -- all while easing the burden on the United States of maintaining geopolitical dominance. A policy of retrenchment need not invite international instability or fuel partisan rancor in Washington. If anything, it could help provide breathing room for reforms and recovery, increase strategic flexibility, and renew the legitimacy of U.S. leadership.
DECLINE: DELUSION OR DESTINY?
Power is multifaceted and difficult to measure, but the metrics that matter most over the long term are a country's military capability and economic strength relative to rivals. Using those benchmarks, there is a strong case to be made that although U.S. decline is real, its rate is modest.
The United States invests more in its military manpower and hardware than all other countries combined. As the political scientist Barry Posen argues, this has allowed it to exercise "command of the commons." With its vast fleet of attack submarines and aircraft carriers, the United States controls the seas -- even those that are not its territorial waters and those outside its exclusive economic zone. Its fighter aircraft and unmanned aerial vehicles give it unrivaled air superiority. And its dominance of outer space and cyberspace is almost as impressive.
But the United States' return on its military investment is falling. Manpower and technology costs are increasing rapidly. The Government Accountability Office reports that since the end of the Cold War, funding for weapons acquisition has increased by 57 percent while the average acquisition cost has increased by 120 percent. According to the Congressional Research Service, between 1999 and 2005, the real cost of supporting an active-duty service member grew by 33 percent. Meanwhile, the benefits of unrestricted defense spending have not kept up with the costs. As Gates put it, U.S. defense institutions have become "accustomed to the post-9/11 decade's worth of 'no questions asked' funding requests," encouraging a culture of waste and inefficiency he described as "a semi-feudal system -- an amalgam of fiefdoms without centralized mechanisms to allocate resources."
The trend of the last decade is disturbing: as military spending soared, U.S. success abroad sagged. To be clear, the United States continues to field the best-armed, most skilled military in the world. The wars in Afghanistan and Iraq have bent, but not broken, the all-volunteer force, and the burden of maintaining this formidable force is not unacceptably onerous. The proposed $553 billion base-line defense budget for 2012 represents just 15 percent of the federal budget and less than five percent of GDP. (To put that figure in perspective, consider that the proposed 2012 budget for Social Security spending tops $760 billion.) Yet current trends will make it harder for the United States to continue to purchase hegemony as easily as it has in the past. Changes in military tactics and technology are eroding the United States' advantages. The proliferation of antiship cruise missiles makes it harder for the U.S. Navy to operate near adversaries' shores. Advanced surface-to-air missiles likewise raise the cost of maintaining U.S. air superiority in hostile theaters. Nationalist and tribal insurgencies, fueled by a brisk small-arms trade, have proved difficult to combat with conventional ground forces. U.S. defense dominance is getting more expensive at a moment when it is becoming less expensive for other states and actors to challenge the sole superpower.
Beyond these challenges to the country's military dominance, a weakened economic condition is contributing to the decline of U.S. power. The U.S. economy remains the largest in the world, yet its position is in jeopardy. Between 1999 and 2009, the U.S. share of global GDP (measured in terms of purchasing power parity) fell from 23 percent to 20 percent, whereas China's share of global GDP jumped from seven percent to 13 percent. Should this trend continue, China's economic output will surpass the United States' by 2016. China already consumes more energy than the United States, and calls are growing louder to replace the dollar as the international reserve currency with a basket of currencies that would include the euro and the yuan.
The fiscal position of the United States is alarming, whether or not one believes that Standard & Poor's was justified in downgrading U.S. Treasury bonds. Between 2001 and 2009, U.S. federal debt as a percentage of GDP more than doubled, from 32 percent to 67 percent, and state and local governments have significant debts, too. The United States' reliance on imports, combined with high rates of borrowing, has led to a considerable current account deficit: more than six percent of GDP in 2006. Power follows money, and the United States is leaking cash.
The news is not all doom and gloom. Despite massive federal debt, the United States spent less than five percent of its 2010 budget on net interest payments, limiting the extent to which debt servicing costs have crowded out other spending. The United States still exports more goods and services than any other country and is close behind China as the world's largest manufacturer. In terms of market exchange rate, the U.S. economy is still more than double the size of the Chinese economy, and China faces a raft of obstacles that could slow its rise: domestic unrest, stock and housing bubbles, corruption, an aging population, high savings, and an unproven track record of innovation. Yet the overall picture is clear: the United States' economic supremacy is no longer assured, and this uncertainty will reduce its geopolitical dominance.
In essence, the United States has fallen into a familiar pattern for hegemonic powers: overconsumption, overextension, and overoptimism. But the country also has a resourceful economy and a resilient military; it is not in free fall. Now, it needs a foreign policy to match.
RESISTING THE MYTHS OF EMPIRE
Despite the erosion of U.S. military and economic dominance, many observers warn that a rapid departure from the current approach to foreign policy would be disastrous. The historian Robert Kagan cautions that "a reduction in defense spending . . . would unnerve American allies and undercut efforts to gain greater cooperation." The journalist Robert Kaplan even more apocalyptically warns that "lessening [the United States'] engagement with the world would have devastating consequences for humanity." But these defenders of the status quo confuse retrenchment with appeasement or isolationism. A prudent reduction of the United States' overseas commitments would not prevent the country from countering dangerous threats and engaging with friends and allies. Indeed, such reductions would grant the country greater strategic flexibility and free resources to promote long-term growth.
A somewhat more compelling concern raised by opponents of retrenchment is that the policy might undermine deterrence. Reducing the defense budget or repositioning forces would make the United States look weak and embolden upstarts, they argue. "The very signaling of such an aloof intention may encourage regional bullies," Kaplan worries. This anxiety is rooted in the assumption that the best barrier to adventurism by adversaries is forward defenses -- the deployment of military assets in large bases near enemy borders, which serve as tripwires or, to some eyes, a Great Wall of America.
There are many problems with this position. For starters, the policies that have gotten the United States in trouble in recent years have been activist, not passive or defensive. The U.S.-led invasion of Iraq alienated important U.S. allies, such as Germany and Turkey, and increased Iran's regional power. NATO's expansion eastward has strained the alliance and intensified Russia's ambitions in Georgia and Ukraine.
More generally, U.S. forward deployments are no longer the main barrier to great-power land grabs. Taking and holding territory is more expensive than it once was, and great powers have little incentive or interest in expanding further. The United States' chief allies have developed the wherewithal to defend their territorial boundaries and deter restive neighbors. Of course, retrenchment might tempt reckless rivals to pursue unexpected or incautious policies, as states sometimes do. Should that occur, however, U.S. superiority in conventional arms and its power-projection capabilities would assure the option of quick U.S. intervention. Outcomes of that sort would be costly, but the risks of retrenchment must be compared to the risks of the status quo. In difficult financial circumstances, the United States must prioritize. The biggest menace to a superpower is not the possibility of belated entry into a regional crisis; it is the temptation of imperial overstretch. That is exactly the trap into which opponents of the United States, such as al Qaeda, want it to fall.
Nor is there good evidence that reducing Washington's overseas commitments would lead friends and rivals to question its credibility. Despite some glum prophecies, the withdrawal of U.S. armed forces from western Europe after the Cold War neither doomed NATO nor discredited the United States. Similar reductions in U.S. military forces and the forces' repositioning in South Korea have improved the sometimes tense relationship between Washington and Seoul. Calls for Japan to assume a greater defense burden have likewise resulted in deeper integration of U.S. and Japanese forces. Faith in forward defenses is a holdover from the Cold War, rooted in visions of implacable adversaries and falling dominoes. It is ill suited to contemporary world politics, where balancing coalitions are notably absent and ideological disputes remarkably mild.
Others warn that the U.S. political system is too fragmented to implement a coordinated policy of retrenchment. In this view, even if the foreign policy community unanimously subscribed to this strategy, it would be unable to outmaneuver lobbying groups and bureaucracies that favor a more activist approach. Electoral pressures reward lucrative defense contracts and chest-thumping stump speeches rather than sober appraisals of declining fortunes. Whatever leaders' preferences are, bureaucratic pressures promote conservative decisions, policy inertia, and big budgets -- none of which is likely to usher in an era of self-restraint.
Despite deep partisan divides, however, Republicans and Democrats have often put aside their differences when it comes to foreign policy. After World War II, the United States did not revert to the isolationism of earlier periods: both parties backed massive programs to contain the Soviet Union. During the tempestuous 1960s, a consensus emerged in favor of détente with the Soviets. The 9/11 attacks generated bipartisan support for action against al Qaeda and its allies. Then, in the wake of the global financial crisis of 2008, politicians across the spectrum recognized the need to bring the wars in Afghanistan and Iraq to an end. When faced with pressing foreign policy challenges, U.S. politicians generally transcend ideological divides and forge common policies, sometimes expanding the United States' global commitments and sometimes contracting them.
Today, electoral pressures support a more modest approach to foreign affairs. According to a 2009 study by the Pew Research Center, 70 percent of Americans would rather the United States share global leadership than go it alone. And a 2010 study by the Chicago Council on Global Affairs found that 79 percent of them thought the United States played the role of world policeman more than it should. Even on sacrosanct issues such as the defense budget, the public has demonstrated a willingness to consider reductions. In a 2010 study conducted by the Program for Public Consultation at the University of Maryland, 64 percent of respondents endorsed reductions in defense spending, supporting an average cut of $109 billion to the base-line defense budget.
Institutional barriers to reform do remain. Yet when presidents have led, the bureaucrats have largely followed. Three successive administrations, beginning with that of Ronald Reagan, were able to tame congressional opposition and push through an ambitious realignment program that ultimately resulted in the closure of 100 military bases, saving $57 billion. In its 2010 defense budget, the Obama administration succeeded in canceling plans to acquire additional F-22 Raptors despite fierce resistance by lobbyists, members of Congress, and the air force brass. The 2010 budget also included cuts to the navy's fleet of stealth destroyers and various components of the army's next generation of manned ground vehicles.
Thus, claims that retrenchment is politically impractical or improbable are unfounded. Just as a more humble foreign policy will invite neither instability nor decline, domestic political factors will not inevitably prevent timely reform. To chart a new course, U.S. policymakers need only possess foresight and will.
THE VIRTUES OF RESTRAINT
Even if a policy of retrenchment were possible to implement, would it work? The historical record suggests it would. Since 1870, there have been 18 cases in which a great power slipped in the rankings, as measured by its GDP relative to those of other great powers. Fifteen of those declining powers implemented some form of retrenchment. Far from inviting aggression, this policy resulted in those states' being more likely to avoid militarized disputes and to recover their former rank than the three declining great powers that did not adopt retrenchment: France in the 1880s, Germany in the 1930s, and Japan in the 1990s. Those states never recovered their former positions, unlike almost half of the 15 states that did retrench, including, for example, Russia in the 1880s and the United Kingdom in the first decade of the twentieth century.
Retrenchment works in several ways. One is by shifting commitments and resources from peripheral to core interests and preserving investments in the most valuable geographic and functional areas. This can help pare back the number of potential flashpoints with emerging adversaries by decreasing the odds of accidental clashes, as well as reducing the incentives of regional powers to respond confrontationally. Whereas primacy forces a state to defend a vast and brittle perimeter, a policy of retrenchment allows it to respond to significant threats at the times and in the places of its choosing. Conflict does not become entirely elective, as threats to core interests still must be met. But for the United States, retrenchment would reduce the overall burden of defense, as well as the danger of becoming bogged down in a marginal morass.
It would also encourage U.S. allies to assume more responsibility for collective security. Such burden sharing would be more equitable for U.S. taxpayers, who today shoulder a disproportionate load in securing the world. Every year, according to Christopher Preble of the Cato Institute, they pay an average of $2,065 each in taxes to cover the cost of national defense, compared with $1,000 for Britons, $430 for Germans, and $340 for Japanese.
Despite spending far less on defense, the United States' traditional allies have little trouble protecting their vital interests. No state credibly threatens the territorial integrity of either western European countries or Japan, and U.S. allies do not need independent power- projection capabilities to protect their homelands. NATO's intervention in Libya has been flawed in many respects, but it has demonstrated that European member states are capable of conducting complex military operations with the United States playing a secondary role. Going forward, U.S. retrenchment would compel U.S. allies to improve their existing capabilities and bear the costs of their altruistic impulses.
The United States and its allies have basically the same goals: democracy, stability, and trade. But the United States is in the awkward position of both being spread too thin around the globe and irritating many states by its presence on, or near, their soil. Delegating some of its responsibilities to allies would permit the U.S. government to focus more on critical objectives, such as ensuring a stable and prosperous economy. Regional partners, who have a greater stake in and knowledge of local challenges, can take on more responsibility. With increased input from others and a less invasive presence, retrenchment would also allow the United States to restore some luster to its leadership.
A MORE FRUGAL FUTURE
To implement a retrenchment policy, the United States would have to take three main steps: reduce its global military footprint, change the size and composition of the U.S. military, and use the resulting "retrenchment dividend" to foster economic recovery at home.
First, the United States must reconsider its forward deployments. The top priority should be to deter aggression against its main economic partners in Europe and Asia. This task is not especially burdensome; there are few credible threats to U.S. allies in these regions, and these states need little help from the United States.
Although Russia continues to meddle in its near abroad and has employed oil and gas embargoes to coerce its immediate neighbors, western Europe's resources are more than sufficient to counter an assertive Russia. A more autonomous Europe would take some time to develop a coherent security and defense policy and would not always see events through the same lens as Washington. But reducing Europe's dependence on the United States would create a strong incentive for European states to spend more on defense, modernize their forces, and better integrate their policies and capabilities. U.S. forces in the European theater could safely be reduced by 40-50 percent without compromising European security.
Asia is also ready for a decreased U.S. military presence, and Washington should begin gradually withdrawing its troops. Although China has embarked on an ambitious policy of military modernization and engages in periodic saber rattling in the South China Sea, its ability to project power remains limited. Japan and South Korea are already shouldering greater defense burdens than they were during the Cold War. India, the Philippines, and Vietnam are eager to forge strategic partnerships with the United States. Given the shared interest in promoting regional security, these ties could be sustained through bilateral political and economic agreements, instead of the indefinite deployments and open-ended commitments of the Cold War.
In the event that China becomes domineering, U.S. allies on its borders will act as a natural early warning system and a first line of defense, as well as provide logistical hubs and financial support for any necessary U.S. responses. Yet such a state of affairs is hardly inevitable. For now, there are many less expensive alternatives that can strengthen the current line of defense, such as technology transfers, arms sales, and diplomatic mediation. Defending the territorial integrity of Japan and South Korea and preventing Chinese or North Korean adventurism demands rapid-response forces with strong reserves, not the 30,000 soldiers currently stationed in each country. Phasing out 20 percent of those forces while repositioning others to Guam or Hawaii would achieve the same results more efficiently.
Reducing these overseas commitments would produce significant savings. A bipartisan task force report published in 2010 by the Project on Defense Alternatives estimated that the demobilization of 50,000 active-duty soldiers in Europe and Asia alone could save as much as $12 billion a year. Shrinking the U.S. footprint would also generate indirect savings in the form of decreased personnel, maintenance, and equipment costs.
Retrenchment would also require the United States to minimize its presence in South Asia and the Middle East. The United States has an interest in ensuring the flow of cheap oil, yet armed interventions and forward deployments are hardly the best ways to achieve that goal. These actions have radicalized local populations, provided attractive targets for terrorists, destabilized oil markets, and inflamed the suspicions of regional rivals such as Iran. Similarly, the United States has a strong incentive to deny terrorist groups safe havens in ungoverned spaces. It is unclear, however, whether large troop deployments are the most cost-effective way to do so. The U.S.-led NATO mission in Afghanistan has established temporary pockets of stability, but it has enjoyed little success in promoting good governance, stamping out corruption, or eradicating the most dangerous militant networks. Nor have boots on the ground improved relations with or politics in Pakistan.
More broadly, the Pentagon should devote fewer resources to maintaining and developing its capabilities for engaging in peripheral conflicts, such as the war in Afghanistan. Nation building and counterinsurgency operations have a place in U.S. defense planning, but not a large one. The wars in Afghanistan and Iraq have raised the profile of counterinsurgency doctrine and brought prominence to its advocates and practitioners, such as David Petraeus, the retired general who is now director of the CIA. This is an understandable development, considering that the defense establishment was previously unprepared to wage a counterinsurgency war. But such conflicts require enormous commitments of blood and treasure over many years, rarely result in decisive victory, and seldom bring tangible rewards. A retrenching United States would sidestep such high-risk, low-return endeavors, especially when counterterrorism and domestic law enforcement and security measures have proved to be effective alternatives. Although they cannot solve every problem, relatively small forces that do not require massive bases can nevertheless carry out significant strikes -- as evidenced by the operation that killed Osama bin Laden.
Curbing the United States' commitments would reduce risks, but it cannot eliminate them. Adversaries may fill regional power vacuums, and allies will never behave exactly as Washington would prefer. Yet those costs would be outweighed by the concrete benefits of pulling back. A focus on the United States' core interests in western Europe would limit the risk of catastrophic clashes with Russia over ethnic enclaves in Georgia or Moldova by allowing the United States to avoid commitments it would be unwise to honor. By narrowing its commitments in Asia, the United States could lessen the likelihood of conflict over issues such as the status of Taiwan or competing maritime claims in the South China Sea. Just as the United Kingdom tempered its commitments and accommodated U.S. interests in the Western Hemisphere at the turn of the last century, the United States should now temper its commitments and cultivate a lasting compromise with China over Taiwan.
Disassociating itself from unsavory regimes in the Middle East would insulate the United States from the charges of hypocrisy that undermine public support for its foreign policy throughout the region. And an accelerated drawdown of the wars in Afghanistan and Iraq would save a considerable amount of money. The current request for $118 billion to support these operations represents a savings of $42 billion compared with last year. Moving even faster to end those conflicts would result in even larger savings. At a time when the U.S. government is under incredible pressure to justify big-ticket spending, what little return on investment these wars promise does not warrant any more patience -- or sacrifice.
FROM PROFLIGACY TO PRUDENCE
The second necessary step for retrenchment would be to change the size and composition of U.S. military forces. Despite Gates' best efforts, the 2012 defense budget remains stuffed with allocations for weapons systems of debatable strategic value. For instance, despite delays, cost overruns, failed or deferred tests, and opposition from U.S. allies, the Obama administration has pledged more than $10 billion for various ballistic missile defense systems and close to another $10 billion to fund the F-35 Joint Strike Fighter. And such programs are merely the low-hanging fruit. A nonpartisan task force of leading experts convened by the Institute for Policy Studies recently concluded that the U.S. government could slash more than $77 billion from the 2012 defense budget across eight different programs. New submarines and preliminary payments on what would be the 11th U.S. aircraft carrier -- no other country has more than one -- cannot be the best way to spend $5 billion. Likewise, spending $100 billion over the next ten years to upgrade U.S. nuclear weapons will not alter any adversary's calculations in a positive way.
Deeper defense cuts would force the Pentagon to do what the rest of the United States is already doing: rethink the country's role in a changing world. One problem with present procurement plans is that the strategic rationale underlying certain goals -- a 320-ship fleet for the navy, 2,200 fighter aircraft for the air force -- remains murky. Protecting international trade routes against Chinese aggression is often cited as the justification for such military programs. But precisely how the United States is going to protect its economy by clashing with its third-largest trading partner is rarely explained.
The lack of a clear assessment of the costs and benefits of new weapons systems may also lead to expensive errors. The United States already has an immense lead in aircraft carriers, fourth-generation jet fighters, and mechanized land forces. There are few reasons to squander resources replacing weapons systems that already surpass those of every single rival. Moreover, the fast pace of technological change, in particular when it comes to advanced antiship and air defense capabilities, casts doubt on the wisdom of pouring money into systems that might be obsolete the moment they roll off assembly lines.
In contrast, a modest investment in proven capabilities would bolster U.S. defenses in core regions and give the United States maximum flexibility to respond to future threats. To this end, investments should continue in theater- and naval-based ballistic missile defense systems, which remain the best ways to protect U.S. allies against missile threats. The Pentagon should acquire cheap alternatives to existing systems, such as unmanned aerial vehicles, in large numbers. Congress should continue to fund research and development, but only enough to ensure that new technologies could be produced promptly when clear and present needs arise. These changes in procurement, combined with a slightly swifter drawdown in Afghanistan and Iraq and a somewhat smaller U.S. Army and Marine Corps, would save the United States a minimum of $90 billion annually.
Savings of that kind would be part of a retrenchment dividend that could be spent on reinvigorating the U.S. economy. Retrenchment begins with the curtailing of foreign policy resources, but it ends only when the resources saved are spent domestically. Although military expenditures are a productive investment, they are not infinitely or incomparably so. And the United States is already past the point of diminishing returns when it comes to defense spending. Washington should prioritize measures to more directly stimulate the U.S. economy and make it more competitive. How exactly to achieve that outcome will surely continue to be the subject of fierce debate. But that debate will be much more meaningful if it is conducted with the aim of investing a retrenchment dividend.
The modest decline of U.S. power, combined with a relatively benign international environment, has provided the United States with a unique opportunity to reduce its foreign policy commitments in a measured manner. To make a virtue of this necessity, policymakers in Washington must resist calls to tighten the United States' tenuous grasp on global affairs, ignore the stale warnings about eroded credibility, and overcome the tired protests of bloated bureaucracies. By reducing its forward deployments, sharing burdens with its allies, limiting its fights in peripheral territories, and paring back wasteful spending on unnecessary weapons, the United States can not only slow its decline but also sow the seeds of its recovery.