When the Reagan Administration first came into office, it seemed for a considerable period determined to repudiate totally policies that had dominated postwar U.S. foreign policy. Senior officials publicly compared the Soviet Union to Napoleonic France—or worse; they suggested that arms control negotiations should not be convened until Soviet behavior in the world’s trouble spots improved—an unlikely prospect if the Administration’s assessment of the nature of the Soviet regime was even partially correct. The Reagan Administration not only refused to ratify the SALT II treaty, with its limitations on future deployments, but also appeared ready to refuse to honor these restraints even informally. When arms talks did begin, the Administration waited months to develop its proposals, and then tabled suggestions so unbalanced that the only possible purpose could be to ensure that they would be non-negotiable, as then Secretary of State Alexander Haig, Jr., subsequently pronounced some of them. The Administration veered so dangerously far from the policy toward the People’s Republic of China laid down by three previous administrations that Mr. Haig warned of a new estrangement of Beijing.

Eventually, a combination of domestic pressures, alliance insistence and diplomatic realism compelled the Administration to pull back from these policy changes, which would have revolutionized America’s postwar posture. In Administration rhetoric, the Soviet Union was transformed from an implacable aggressor into a difficult competitor with which America might nonetheless do business, albeit under closely controlled conditions. Arms control proposals were steadily altered to make them at least appear more negotiable. The Administration found that the national interest was served by honoring the provisions of SALT II (even if, for reasons never entirely clear, the treaty remained sufficiently flawed as to preclude U.S. ratification). In June 1985, the President surprised both critics and supporters by deciding that the United States would dismantle rather than dry-dock an aging Poseidon submarine in order to remain within the limits set by SALT II. And the President visited China in 1983, where he explained his new, favorable position toward the P.R.C. by proclaiming that its leadership was leading China back to capitalism.

These shifts and others have persuaded many that the Reagan Administration is essentially following in the footsteps of its predecessors, and that any differences with earlier administrations are matters more of "image" than of "substance." This view is wrong.

The Reagan Administration has brought about major shifts in American foreign policy, smaller in each area perhaps than it promised, but cumulatively enough to set it apart from previous administrations in significant measure. In the process, it has measurably advanced American authority in the world, at least temporarily. But it has accomplished this by adopting a new international role for the United States—that of obstructor rather than facilitator. The Administration has practiced a form of negative diplomacy commonly associated with France under de Gaulle, who enhanced his nation’s influence by saying no or refusing to cooperate. In today’s closely knit world obstructionist tactics can be effective, at least in the short run. Whether they serve a nation’s long-run interest is a more difficult question.

Certainly the Reagan Administration believes that its foreign policy represents a sharp departure from the past. Secretary of State George Shultz contended in the months leading up to the November 1985 Reagan-Gorbachev summit that as a result of the Reagan record, America is again "in a position to have a major influence over the direction of events." The "correlation of forces" is again shifting back in America’s favor. In short, although outside analysts reviewing Reagan’s record may find little change from earlier administrations, the people around the President disagree. They suggest that the Administration has been responsible for change so sweeping in its first term as to have put a vigilant and confident America back in history’s saddle, ready to drive events throughout the world in directions favorable to America’s interests.

Does the Reagan Administration’s foreign policy record in fact represent a significant shift from the past? More important, to what degree do the changes it has brought about serve U.S. interests over both the short and the long run?

II

Even those who tend to minimize the changes for which the Reagan Administration is responsible acknowledge that there have been major shifts in two areas, namely, rhetoric and defense spending. However, they often then treat these areas as somehow irrelevant to the question of whether the Reagan foreign policy is significantly different from its predecessors.

In the Nixon Administration, Attorney General John Mitchell used to urge that he and his colleagues be judged not on what they said but on what they did, as though words had no impact on policy. The idea persists that American public figures can divorce their words from their deeds. In fact, however, such a divorce is difficult in politics and impossible in diplomacy, where precision in language has a special place and importance.

The immoderate words of the early Reagan Administration have had a profound effect on actual events and have damaged important U.S. foreign policy interests. In Europe, the casual manner in which some administration officials treated the prospect of a nuclear exchange with the Soviet Union drove discussions of nuclear strategy out of the think tanks and government offices and into the streets. No doubt previous treatment of this vital question had been held in too closed a circle, but street demonstrations are not the best way for a nation or an alliance to determine strategic choices.

Administration officials have tended to dismiss as insignificant the damage that was done to America’s alliances. Secretary Shultz argues, for example, that "our key alliances are more united than ever before." But such official assessments derive too much comfort from recent electoral victories of conservative forces in Britain and in West Germany. In recent months the domestic positions of those alliance leaders most supportive of Reagan’s America have shown signs of weakness. The president of France and the prime ministers of Britain and West Germany have all been in and out of political trouble. Were Britain’s Labourites or Germany’s Social Democrats to come to power, for the first time in the postwar period major governments in NATO might no longer share the U.S. approach to the role of nuclear weapons in the defense of the West. While few victors in any democratic country implement their campaign promises to the letter, they cannot ignore them altogether. It is inevitable that the change in public attitudes in Europe toward nuclear weapons will, over time, affect government policy.

Nor was the damage done by undisciplined rhetoric confined to alliance nations. In the Middle East, the Reagan Administration’s initial, almost total rhetorical identification with a right-wing Israeli government probably encouraged Israel to believe it would enjoy American support during the disastrous Israeli invasion of Lebanon. In southern Africa, its initial stance of seeming indifference to the plight of the black majority probably motivated right-wing elements within the South African government to undermine American efforts to reach a diplomatic solution to that region’s problems. In Asia, Vice President George Bush’s public endorsement of the "democratic" record of the Marcos regime probably encouraged that regime to dig in its heels and resist pressure for reform, with the result that Filipino society now faces a major political crisis. In Central America, the Reagan Administration’s early denunciation of the Carter human rights policy undoubtedly gave heart to the extreme right wing in that region and delayed efforts to arrive at a political settlement.

The consequences of these developments will trouble U.S. policymakers for years. Moreover, in various parts of the world, particularly in center-left groups, there is a mounting alienation from the United States—during 1985 this was especially evident in South Africa, the Middle East and the Philippines—that is certain to disadvantage U.S. diplomacy in succeeding administrations.

Ironically, the area of policy that seems to have been affected least is the area that many predicted would be affected most: U.S.-Soviet relations. The Reagan rhetoric condemning the Soviet Union as the "focus of evil" and consigning its current regime to the "ash heap of history" greatly angered the Soviet leadership, which, overlooking the calumny it often directs toward Washington, began to denounce the American government bitterly and to compare the contemporary international scene to the years leading up to World War II. But the margin for maneuver in U.S.-Soviet relations is so narrow that each capital struggles to prevent an emotional response to the other side’s words from pushing policy too far from its established course.

Indeed, two powerful forces for continuity from administration to administration in U.S.-Soviet relations remain the enduring divergence between the national interests of the two superpowers on the one hand and, on the other, mounting domestic pressures—primarily political in the United States and primarily economic in the Soviet Union—for some form of accommodation, however limited. Together these two forces make it difficult for any administration to go too far, either in a policy of accommodation with the Soviet Union or in a policy of confrontation.

Yet, too much can be made—and was made by administration supporters—of the apparent stability in U.S.-Soviet relations during Reagan’s first term. Even if the automatic stabilizers in the relationship are stronger than they have been in earlier great-power relationships, there is no guarantee that these stabilizers will always work or that, in a crisis, they will be sufficiently strong to ensure that emotion will not begin to overpower reason within the leadership circle of either side. History is replete with examples of governments embarking on a course recognized at the time as having a high risk of bringing on a regime’s, a country’s or even a whole people’s ultimate ruin. Japan’s plunge into World War II is the most recent example.

Nevertheless, if through angry words damage was done to the U.S.-Soviet relationship in Reagan’s first term, the main victim was the prospect for any sustained departure from the unfruitful course of that relationship in recent years. The political consensus for compromise in both capitals, already feeble, was probably further weakened by the rhetoric. When Secretary Shultz visited Moscow in early November 1985 to try to pre-cook the agenda for the meeting between Reagan and Gorbachev later in the month, he was surprised to learn that the new Soviet leader believed that the policy of the Reagan Administration was driven by deep and overriding anti-Soviet impulses. The early words of the Reagan Administration had cut deeper than many realized. Over time, the summit process may even reinforce this harsh Soviet impression because the contrast between an affable President and an unchanging U.S. policy may seem to the Soviets final proof that the President is the captive of anti-Soviet individuals and forces.

III

Defense spending is the other area where everyone concedes the Reagan Administration has wrought great change. Excluding inflation, the 1985 defense budget approved by the Congress was 51 percent higher than five years earlier. Meanwhile, financial commitments for domestic programs (excluding social security and interest on the national debt) declined 30 percent. There has been an extraordinary $330 billion in cumulative real growth in the American defense effort since 1980.

The effects of this massive shift in spending priorities have been profound but unexpected. There is mounting concern in Congress and among experts that the country is receiving too little for its defense money. The response of America’s defense industries to this financial cornucopia has too often been not to improve production but to increase prices. Observers are stunned to find that after such a huge financial commitment the Reagan Administration has ended up with essentially the same force structure it inherited from the Carter Administration.

There is also growing public resistance to a continuation of current policies. When Reagan took office he enjoyed a virtual national consensus that defense spending should be increased. Because the Administration overexploited this consensus, it has now lost it. In December 1985, Congress passed, and the Administration was forced to accept, legislation cosponsored by Senators Phil Gramm (R-Tex.) and Warren Rudman (R-N.H.) that will, barring executive-legislative agreement to reduce the budget deficit, impose a balanced budget on the country by 1991 through equal reductions in civilian and defense spending. A major share of civilian spending, namely social security, interest on the national debt and several programs for the poor, is excluded from the formula. The Reagan revolution in defense spending has spawned a counterrevolution that might never have taken place had administration officials, flushed with victory, not been so unwilling to moderate their demands in 1981 and 1982.

The most important change in the defense field, however, may turn out to lie not in the shifting fortunes of the defense budget but in some of its new directions. With the President’s Strategic Defense Initiative, an administration has proposed a fundamental shift in America’s military strategy for the first time since the introduction of the strategic missile. From reliance on the offensive capability to strike the Soviet Union with devastating retaliation under all circumstances, including a Soviet first strike, the Administration envisions moving with SDI toward reliance on a defensive capability that limits or excludes damage to the American heartland from a Soviet nuclear attack.

Announced before it was clear that there was an adequate scientific basis for progress in the near term, the proposal has thrown into question American adherence to the Anti-Ballistic Missile Treaty and threatens to spark a new, enormously expensive cycle in the arms competition between the United States and the Soviet Union. This action alone should establish the right of the Reagan Administration to contend that it is quite different from earlier administrations and that it is bringing about a major shift in America’s international position. Regrettably, its commitment to SDI is less likely to restore American invulnerability than to ensure American insolvency, as the cost may approach one trillion dollars.

IV

Careful consideration of the effects and nature of changes wrought by the Reagan Administration in rhetoric and defense alone should cause analysts to reassess the facile conclusion that this administration is more or less like any other. But when changes in other areas are also considered, then the case seems persuasive that many earlier assessments understate the Reagan record of change, a record that merits more sober evaluation in terms of the benefits or costs it has brought to the American people. In addition to rhetoric and defense, significant policy shifts have occurred in five other areas.

Arms Control. The Nixon, Ford and Carter Administrations were able to resolve every compliance problem with the Soviet Union to their satisfaction through discussions in the Standing Consultative Commission in Geneva. The Reagan Administration has been more anxious to reap the domestic benefits of denouncing possible Soviet violations, even at the cost of undermining the arms control process, than to gain the diplomatic benefit of negotiating with the Soviets to bring intentional or unintentional violations to an end; it is the first administration since the SALT process began to pursue compliance issues in a spirit that has led to a total impasse with the Soviet Union. The Administration has issued a new interpretation of the Anti-Ballistic Missile Treaty that the chief negotiator of that treaty, Gerard Smith, states would radically undercut the treaty’s purposes by permitting unlimited testing and development of space-based systems. The Administration has actively opposed the opening of negotiations with the Soviet Union on antisatellite weapons and has vigorously denounced the December 1985 decision of Congress to end funding for the antisatellite weapons program unless the President certifies that the Soviet Union has also conducted tests against an object in space. The Reagan Administration has opposed negotiations on the Comprehensive Test Ban Treaty; it is the first administration to take this position.

Economics. The Reagan Administration has gone much further than any postwar administration in disregarding the impact of U.S. economic decisions on the fate of other nations. The Administration’s laissez-faire approach to exchange rates and international interest-rate differentials drained capital from the rest of the world, drove the value of the dollar to levels that priced American exports out of many world markets, turned the United States into a debtor country for the first time since 1914, and raised the debt burden to the developing countries to a point that now seems to threaten the stability of the entire international financial structure.

As Charles F. Kindleberger pointed out in his presidential address to the American Economics Association, the United States has lost its appetite for providing the world with "international economic public goods." Regrettably, past experience suggests that when the world’s largest economic power ceases to play this role, global economic setbacks have a tendency to become global economic crises.

Third World Policy. The Reagan Administration has consistently stressed instruments of force in its policy toward the Third World. Total U.S. foreign aid nearly doubled between 1981 and 1985 to reach a level of $19.2 billion. But the portion of the aid budget devoted to security concerns rose from roughly half of the fiscal year 1981 foreign aid budget to more than two-thirds of the FY 1985 budget. The Administration plans to raise this portion further, to more than 70 percent, by FY 1988. The Administration has used military force in Grenada and Lebanon and against Libya. It has threatened the use of military force against Iran, Nicaragua and Syria. It has conducted menacing military maneuvers near Cuba and Nicaragua.

Although the records are necessarily classified, it is well known that the Central Intelligence Agency has received a sharp increase in funding during the Reagan Administration. The agency has helped to plan or direct the mining of the harbors of Nicaragua, the writing of pamphlets that appear to condone the assassination of Nicaraguan officials, the raising of private funds for the counterrevolutionary forces in Nicaragua after congressional prohibitions blocked official funding, and the general management of an effort that every observer outside the government believes is designed to topple the Sandinista regime, a congressional prohibition against this step notwithstanding. The attitude of the Administration toward the issue of CIA accountability is suggested by a speech given by CIA Director William Casey in October 1984 before the Association of Former Intelligence Officers. He contended: "With few exceptions, the highly publicized charges made against the CIA during the mid-seventies turned out to be false." As his predecessor, Stansfield Turner, has acknowledged, the statement is "both inaccurate and dangerous," because it leads to the conclusion that oversight is not necessary.

International Institutions. The Administration has withdrawn from UNESCO and declared it will no longer follow a policy of automatic compliance with the decisions of the International Court of Justice. It has threatened to withdraw from the Food and Agricultural Organization, the International Atomic Energy Agency and the U.N. Conference on Trade and Development. It has repudiated the earlier understanding among major donors that the seventh replenishment of funds for the World Bank’s International Development Association would be at a level at least equal in real terms to that of the last replenishment. By limiting the U.S. contribution to no more than $2.25 billion over three years, the Administration forced a 40-percent cut in real terms in the bank’s funds for soft loans. The Administration has refused to sign the Law of the Sea Treaty laboriously negotiated on a bipartisan basis over the course of four administrations. It has refused to continue contributions to the U.N. Fund for Population Activities, and it cast the lone vote against a World Health Organization code of conduct regarding the manufacture and distribution of infant milk formula. Furthermore, it is the first administration in postwar history to fail to defend international institutions against congressional pressures, which have now resulted in the Kassebaum Amendment that unilaterally reduces the mandated U.S. contribution to the United Nations from 25 percent of the budget to 20 percent unless the General Assembly adopts a form of weighted voting on financial issues—a step that requires amendment of the U.N. Charter. Even more extreme measures seem likely to pass through the Congress this year.

This record is extraordinary. The Reagan Administration has brought major shifts in U.S. foreign policy that will have profound consequences for years to come. It is not true that the foreign policy of this administration differs from that of its predecessors only in image and not in substance.

V

What impact has this very significant degree of change had on America’s position in the world? Administration critics, when they are fair, have to acknowledge that the short-run damage to America’s standing in the world has been far less than they predicted. Like the economists who have been telling the public for five years that the Reagan economic program would lead to grave economic difficulties, foreign policy analysts have similarly been predicting difficulties. Rising concern over global debt problems and recent troubles in South Africa and the Philippines suggest that both groups of critics may turn out to be right in the long run, but both have been embarrassed in the short run because events have not immediately borne out their concerns.

Thus the West Europeans accepted the Administration’s rough rhetoric, cruise missiles, and strategic surprises with grumbling compliance. Yet open anger over trade differences, barely suppressed disagreement about American policy in the Middle East or Central America, and the growing estrangement of the younger West European generation from a more confident, sometimes overbearing America preclude general acceptance of the Reagan Administration’s optimism. It is also true, however, that U.S.-European relations at the end of 1985 were far better than the foreign policy community outside the government feared would be the case.

The same point can be made about other areas of the world. The Administration’s negotiating tactics did not lead to an agreement with the Soviet Union in the field of arms control but the Soviet Union, after a brief period of refusing to negotiate with the Administration, did agree to reopen arms control talks with the United States. Both the Arabs and the Africans were angry with administration positions toward such sensitive issues as the legality of Israeli settlements on the West Bank (they are "not illegal") or the process of change inside South Africa (P. W. Botha is a "reformer"). The Latin Americans strongly disagreed with U.S. policy toward Central America. But the Arabs, Africans and Latin Americans remained eager to reengage the United States diplomatically in the problems of their region whenever the Administration appeared willing to do so. In other words, the diplomatic costs to the United States of its undiplomatic behavior seemed small, at least in the near term.

Why was this the case? There are three plausible answers. One, given by many neoconservatives, is that previous administrations overestimated the ability of other states to defy a determined United States. As pointed out by the editor of The National Interest, a new journal that brings together both conservatives and neoconservatives, the latter put an enormous emphasis on the importance of "will" in confronting and changing the world. The weakness of this explanation is that neoconservatives themselves have bitterly condemned the Reagan Administration for a supposed lack of will regarding such issues as U.S. policy toward Poland and U.S. military policy in Lebanon.

A second explanation might be that the Administration benefited politically from what was a disastrous economic climate for most of the globe. During the first term of the Reagan Administration, the developing countries of Latin America and Africa were subjected to severe economic shock as the Reagan economic program drove international interest rates to historic levels and threatened their ability to repay their debts. They were therefore in no position to pressure the United States on political issues. They had to reserve their diplomatic capital for efforts to secure economic assistance that might enable them to make it through this difficult period. Europe was hardly in a better position. Traumatized by its inability to expand the size of the labor market as it faced a growing number of new job entrants and worried that it was falling behind Japan and the United States in the promising fields of high technology, Western Europe in the early 1980s was more in a mood to learn rather than instruct. In any event, it felt that it could not afford to offend the United States politically. In the Middle East, the Arab oil producers, unable to negotiate equitable production shares in a declining market, steadily lost power and influence during Reagan’s first term.

A third explanation could be that foreign governments have decided to wait out the Reagan Administration to see if its policy innovations endure; only when that is clearly the case will they make permanent adjustments of their own. Thus moderate Arab states will not radically alter their policies—perhaps, like Syria, by turning to the Soviet Union—until it is clear that neither this administration nor its successor is likely to give the Middle East peace process greater emphasis than it has. The Soviets, the Latins and the Africans know that there are powerful currents in the American body politic that wish to give greater emphasis to arms control negotiations or to compromise in Central America or to more vigorous pressures against South Africa. Only if it is clear that the succeeding administration will adopt policies similar to the Reagan Administration’s (and can successfully manage or disregard the resulting pressures) will foreign governments begin taking decisions that will affect American foreign policy for years to come.

VI

Whatever the reason for foreign quiescence, President Reagan started his second term in an unusually strong position diplomatically. In his inaugural address, he claimed that the United States was "poised for greatness." Many foreign leaders agreed that his administration was poised for considerable accomplishment and reacted accordingly. In January the American and Soviet foreign ministers met in Geneva to establish a framework for arms control negotiations. The same month, the prime minister of Japan visited the United States to discuss with the President measures to open up Japanese markets. On January 30 Cuban leader Fidel Castro proposed in an interview several measures to improve U.S.-Cuban relations. In February the British prime minister visited Washington to begin discussions that, by the end of 1985, would lead to British participation in SDI. That same month, Yasir Arafat and King Hussein of Jordan hammered out a common approach to the Middle East peace process. In short, in virtually every area of the globe steps were being taken to capitalize on President Reagan’s reelection and the new prospects that victory offered for American diplomacy.

But by the year’s mid-point, in the wake of unexpected events, presidential misstatements and administration disarray, diplomatic momentum had been lost. The Administration began to react to events rather than to take advantage of them. And a sense of lost opportunities grew.

A simple list of the unexpected events over the course of the year gives some idea of the extent to which they robbed the Administration of a promising beginning in its second term. The day of President Reagan’s inauguration, Soviet officials acknowledged during a visit to France that Soviet leader Konstantin Chernenko was ill. Immediately world attention shifted for several weeks from Washington to Moscow as the process of succession in the Kremlin began to unfold. When Mikhail S. Gorbachev was selected to succeed Chernenko in early March, events in Moscow continued to hold world attention as the new leader moved with unexpected speed to consolidate his position, within a few weeks naming five new members to the Politburo. To the West’s dismay, he also showed a sophistication in dealing with the outside world not seen in a Soviet leader since Lenin himself.

In late May the spotlight seemed to return to Washington. But the President lost the initiative by becoming embroiled in the Bitburg affair. For weeks the main issue before the Administration was how the President could both carry through on his determination to visit a German military cemetery that contained graves of SS troops and mollify the domestic outrage, which moved beyond Jewish groups into the veterans organizations and political figures in both parties.

Scarcely had the Administration extricated itself from that self-inflicted political disaster than Shi‘ite gunmen on June 14 seized a Trans World Airlines Boeing 727 with 153 passengers aboard and forced it to land in Beirut. They dominated world headlines through the rest of the month. Only two months before, Israel had moved 1,100 Lebanese prisoners to Israel over U.S. objections that the transfer violated the Geneva conventions. The fate of the two groups being held became linked informally; and although the Administration overall handled the crisis skillfully, some bruising public disagreements between cabinet members in Israel and the United States prolonged the crisis unnecessarily.

Again the Administration prepared to resume diplomacy as usual when, on July 13, the President underwent an operation for the removal of an intestinal polyp that was found to be cancerous. The President demonstrated remarkable recuperative powers for a man of his age. Nevertheless, by the time he returned to a full work load, there were new surprises to drive his administration on the defensive.

Throughout 1985 black unrest in South Africa had been spreading and by summer it seemed clear that there would have to be a major adjustment in the policy of the South African government to contain the situation. Although members of the South African cabinet raised worldwide expectations of a major shift toward moderation, particularly in an early August meeting in Vienna between South African Foreign Minister Roelof F. "Pik" Botha and then U.S. National Security Advisor Robert McFarlane, South African President P. W. Botha stunned the world on August 15 by rejecting all calls for significant reform, thereby plunging his country into a major political crisis. The Reagan Administration soon faced a crisis of its own: the President was able to ward off congressionally mandated sanctions against South Africa only by proclaiming them on his own.

Within a few weeks another crisis broke over the heads of the Administration: the seizure on the high seas of the Italian liner, Achille Lauro, with 14 American passengers. By the time that crisis was over, the Administration had begun to prepare for the November summit between the President and the leader of the Soviet Union. But here as well the Administration seemed to remain on the defensive. At first with his crushing electoral victory in 1984, the President appeared determined to create a more coherent administration team. He overruled the hard right in its determination to move Jeane Kirkpatrick from the United Nations into the White House as national security advisor. And he appeared to back Secretary of State Shultz’ effort to gain greater control of the Administration’s foreign policy machinery through personnel changes. But Mr. Shultz failed in his bid for policy dominance, and throughout the year the disagreements between the Departments of State and Defense grew more pronounced on a host of issues—the use of force, arms control and strategy for the summit. Robert McFarlane assumed a larger policy role for a time, but then resigned from the Administration in December; his departure was for many a concrete sign of the President’s continuing failure to manage effectively the various national security agencies of the federal government.

VII

Against this backdrop, it is remarkable that the Reagan Administration finished 1985 in as strong a position as it did. Its recovery toward the end of the year is the result of two factors: first, the rest of the world probably sees the Reagan Administration as having brought about more change in U.S. foreign policy than many American foreign policy analysts see. Foreigners are impressed with the fact that in a crisis President Reagan continues to get his way. They may or may not like his foreign policy ways but, the missteps of 1985 aside, they see the Reagan Administration as still in control of the United States even if it is not always in control of itself. And any administration in control of the United States remains poised if not for greatness then at least for action, whether purposeful or destructive. It is necessary therefore to continue to take this administration seriously.

Second, in yet another demonstration of the decisive impact of U.S.-Soviet relations on the rest of the foreign policy agenda, the reasonably successful summit with General Secretary Gorbachev returned to President Reagan the aura of a man once again in charge of events. In fact, it is too early to judge the real accomplishments of the summit. If the President cannot compromise on SDI or Gorbachev cannot change his position, it is difficult to see how the coming summits can lead to anything but a public announcement that the arms control process has broken down. But at a personal level, the President’s achievement is undeniable. He used his considerable charm to establish a personal relationship, despite the language barrier, with the leader of the other superpower.

As 1986 approaches, therefore, the big question in American foreign policy remains: what will the Reagan Administration do with the power it has accumulated through electoral victory at home and negative diplomacy abroad? At this point the Reagan Administration is like an athlete who has been training for five years but never entered a race. No one knows why he will not participate. Perhaps he fears his competitors will cheat. Or his trainers may believe that he is less strong than his fine appearance would suggest. What is clear is that power accumulated but never used for positive purposes is power wasted. Historians may well conclude that the Reagan Administration enhanced America’s influence but failed to advance its interests. In the coming months, the following issues seem particularly critical.

In arms control, the diplomatic window for an agreement is now open. A problem that has troubled the U.S.-Soviet relationship from the beginning has been the issue of parity. As Averell Harriman, the American ambassador in Moscow in 1945, reported to the State Department, American possession of the atomic bomb virtually doomed any possibility of a less conflictive relationship between East and West until Soviet science closed the U.S.-U.S.S.R. knowledge gap and Soviet industry closed the military gap.

Most objective observers believe that after 40 years of arms competition the two sides have finally moved into a position of rough parity. The stage is therefore set for significant arms control negotiations, provided the Administration is willing to accept the domestic costs of striving for an agreement (and the Soviets themselves are willing to compromise). But just as this level of parity has been reached, it is threatened by two developments, one old and one new. The first is the relentless march of technology and the second is the proliferating systems of the smaller nuclear powers.

Technology has always promised but has never delivered a decisive and lasting military advance to one superpower or the other. SDI holds out to some the intoxicating promise of a return to the 1950s, when the American heartland was secure from nuclear attack and the American deterrent in Europe allegedly had greater credibility because of that heartland invulnerability. It seems to be an iron law of the arms race that any important new weapon that can be built will be built, even if there are clear-eyed senior officials who warn beforehand that deployment may not serve the long-run interests of the state once the other side acquires the same technology or takes compensatory actions. Warnings about the ultimate impact of the hydrogen bomb, which now threatens the very existence of mankind, or the multiple independently targetable reentry vehicle, which rendered U.S. land-based missiles vulnerable to first-strike attack, went unheeded. Similar prophecies about the consequences of a cruise missile age or a vigorous SDI program are also likely to go unheeded. Nikita Khrushchev’s memoirs reveal that the Soviet leadership resembles the U.S. leadership at least in one respect: both have been more willing to accept the undesirable diplomatic consequences of continuing the race than the unpleasant domestic consequences of working to contain it.

There is also the looming problem of the nuclear arsenals of the small nuclear powers. These states are now engaged in arms modernization programs that will radically increase their collective destructive power from a few hundred to more than 1,000 nuclear warheads. In the case of France and Britain alone, when the modernization program is complete, each British and French missile-firing submarine will have the capacity to attack all major cities in the Soviet Union. Each British or French submarine commander will have under his control more destructive power than any enemy the Russian people have faced in their history. Meanwhile, China is also engaged in a major modernization effort.

No one can expect the smaller nuclear powers to forego their modernization plans when the nuclear arsenals of the superpowers remain so enormous. But if these plans are carried out, the world will face a unique conceptual problem for the first time since 1945. It is well known that two powers negotiating an arms control treaty can establish parity at any point between zero and infinity. But if there is a third party involved in the negotiations, there emerges the difficult problem of compensation for the negotiating party that most fears that the other two will band together against it. The Americans and the Soviets can deal with this problem while the third-party arsenals remain relatively small. But as they mount in numbers, so will the difficulties the Americans and Soviets face in hammering out an agreement that both can sign. The window of diplomatic opportunity for the superpowers in the field of arms control will not remain open very much longer.

On the subject of regional conflicts, the Reagan Administration will also have to face up to some difficult choices regarding the role of the Soviet Union in world affairs. Ronald Reagan came to office determined to roll back what he and his supporters saw as a red tide moving through the Third World. And in 1985 the pressure on the Administration and within it to take more decisive action increased significantly. The repeal in 1985 of the Clark Amendment, which barred the executive branch from undertaking covert operations in Angola, opened up a struggle over whether to provide covert or overt U.S. assistance to the rebel forces of Jonas Savimbi, the leader of the National Union for the Total Independence of Angola (UNITA). The passage of legislation during the year to provide financial assistance to the non-communist resistance in Kampuchea marked another milestone. The Congress also authorized in 1985 direct "humanitarian" aid to the resistance forces struggling to overthrow the government of Nicaragua. In Afghanistan the United States has begun providing third-country weapons to the guerrillas.

In none of these cases, however, is U.S. aid likely to be great enough to be decisive. If these conflicts are to be resolved, they will have to be resolved diplomatically. The Administration throughout 1985 has in fact engaged in diplomatic exchanges with the Soviet Union about various regional disputes around the world. Yet these exchanges have been remarkably sterile and are likely to remain so until the Administration confronts a basic conceptual problem governing U.S.-Soviet relations: Americans have not reached a consensus regarding the role that they are willing to see the Soviet Union assume in world affairs. In the past, when ideology did not play such a large role in world affairs, great powers in danger of a direct clash over peripheral areas and wishing to avoid war could resort to one of three tools: condominium, spheres of influence or rules of the road. For very special reasons each of these approaches creates problems for the United States.

America’s allies are vehemently opposed to a condominium, which they believe could only be established at their expense. Nor is the Third World, now armed to the teeth with the latest weaponry, likely to accept a condominium without exacting a price.

The American people are opposed to spheres of influence because of the implications for Eastern Europe, to which a large number of Americans trace their origins. Only one president has been willing to try to improve U.S.-Soviet relations through a cold-blooded recognition of spheres of influence. And Franklin Delano Roosevelt told Stalin privately that he could not reveal his own views to the American people because he feared the impact of the Polish vote on the 1944 election. Nothing in the intervening years suggests that the American people would permit an administration to turn to this time-tested tool of preventing conflict among great states. Indeed, the latest authoritative pronouncement on this issue came from the Kissinger Commission on Central America, which formally declared spheres of influence as "un-American."

There remain rules of the road, which the Nixon Administration tried to develop in the early 1970s. But this approach also suffers from deficiencies. Did the Soviet Union follow the rules of the road in the 1973 Middle East war? The evidence is mixed. Who violated them in Angola where each superpower launched a covert operation to place in power a faction tied to itself? The problem in each case is that there is no mechanism to establish authoritatively who is respecting the rules or violating them.

It may be that any lasting improvement in U.S.-Soviet relations will require the use of all three tools. On a few issues like nonproliferation, a condominium may be appropriate. In Eastern Europe and Central America more formal recognition of spheres of influence might prove stabilizing, provided that such a development took place in the context of greater permissiveness by each superpower toward political experimentation within its sphere. America’s concern in Eastern Europe should not be that the Soviet Union is the dominant power—that is a geographical reality—but that the people of the area do not enjoy a sufficient degree of freedom. And perhaps if the rules are few, limited and unambiguous—no superpower troops or military advisers in black Africa, for example—rules of the road might have a more positive impact today than they did in the early 1970s.

Engaging in anything more than a polemical discussion with the Soviets about regional issues, however, will exact a domestic price. Yet in virtually every regional conflict—from the Middle East to Central America to Southeast Asia—it is difficult to see progress going beyond a certain stage without some understanding between the United States and the Soviet Union about their respective roles in the area.

As for the economy, the crisis facing the Reagan Administration at the end of 1985 is daunting. For the last several years the big debt story has been the Third World’s inability to repay the enormous loans it had received from banks in the Western industrialized countries. In 1985 this debt crisis has been joined by others. The American agricultural sector is facing a credit crisis that resembles that of the Great Depression. A General Accounting Office study in October revealed that 42 percent of all U.S. savings institutions were insolvent or had dangerously low net worth. On November 8, the Federal Deposit Insurance Corporation reported the one-hundredth failure this year of an insured bank. In all of 1983 only 45 failed, and in 1984, 78 went under.

Meanwhile, the United States faces an unprecedented trade and international payments crisis. The high value of the dollar has sucked in imports and helped create a trade deficit of $123 billion in 1984, which is expected to reach $140 billion in 1985. The high interest rates have pulled in foreign capital that has been used to finance the enormous budget deficit that the Administration will not finance by raising taxes or compromising on defense spending. At current rates, U.S. indebtedness could rise about $500 million by the end of the decade, according to the president of the Federal Reserve Bank of New York. In coming years Americans will have to use an increasing share of their export earnings to pay for the interest on this large foreign debt. Perhaps the coming budget showdown mandated by the Gramm-Rudman legislation will force some essential compromises.

To his credit, the new secretary of the treasury, James Baker, in 1985 took two critical first steps in dealing with the crisis. In September the top economic officials from France, Japan, the United Kingdom, the United States and West Germany agreed to work in concert to drive down the value of the dollar; by the end of the year they had had some success. In October, Baker proposed his $29-billion plan to help the developing countries through their debt crisis. The Baker plan would require $9 billion in general-purpose loans from the international financial institutions, primarily the World Bank; the private banks would be expected to advance the other $20 billion.

Most observers believe these measures are inadequate. But adequate measures, like progress on arms control or agreement with the Soviet Union on Third World conflict, will exact a high domestic price. An adequate world debt reform package will severely test the President’s leadership skills. Yet failure to take adequate steps may exact another price. During the period 1929 through 1933, when many developing countries faced an economic crisis no worse than that now confronting many of them, there were more than 50 revolutions in Latin America alone. Thus far the economic squeeze in Latin America has served to drive the military to give way to civilian governments. But the tide can turn in the other direction.

VIII

A problem in evaluating any administration’s foreign policy is what time frame to use. Most administrations are more interested in the electorate’s judgment than history’s. Each administration is tempted to claim credit for maintaining stability when in fact its policies may have planted the seeds for large-scale failure that will only come to light in future administrations. One reason, for example, that U.S. options seem so limited in the 1980s in such crisis areas as the Persian Gulf, Central America, southern Africa or the Philippines is that many of the key turning points occurred in the early 1970s and were not understood or acted upon then.

Thus it was the Nixon Administration that encouraged the Shah of Iran to assume the role of regional gendarme, squandering Iran’s treasure and polarizing its politics. That same administration took the view, in National Security Study Memorandum 39, that in Africa the "whites are here to stay" (including in Portuguese Africa) and that the United States "through selective relaxation of our stance toward the white regimes" could "encourage some modification of their current racial and colonial policies." Elsewhere, the Nixon Administration showed little interest in the early 1970s when José Napoleón Duarte won a fair election in El Salvador only to have the military steal it away, or when Ferdinand Marcos moved to establish a dictatorship in the former American colony of the Philippines.

In retrospect, all were disastrous decisions by an administration that many prematurely argued was able to show real artistry in most aspects of foreign policy. An Iran that devoted its fabulous oil wealth to domestic concerns instead of massive arms purchases might have weathered the storm that soon overtook it. A southern African policy that took into account the fragility of Portugal’s African empire might have adopted different policies toward the liberation movements soon to succeed in Angola and Mozambique. If the United States had spent the 1970s working to build more democratic governments in El Salvador and the Philippines, the political geography of both areas might now be considerably more promising. Subsequent administrations share responsibility for setbacks because, with the exception of Carter’s effort to establish closer ties with the black majority in South Africa, they basically accepted the policy lines the Nixon Administration had bequeathed them. But the turning points came in these critical years of the early 1970s.

On the basis of its first five years, the Reagan presidency is likely to go down in history as an administration that could win elections but lost opportunities. It is likely to be judged as having assumed a major and unnecessary responsibility for a new and financially exhausting chapter in the arms race, increased turmoil in the Middle East and southern Africa and lasting damage to the postwar financial and trading system.

When President Reagan assumed the duties of his office, one of his first acts was to hang a picture of Calvin Coolidge in the White House. It may turn out to be his most symbolic act. Coolidge, by ignoring problems, immeasurably increased the difficulties faced by his successor, Herbert Hoover. Unless he now uses positively the power he has accumulated, Ronald Reagan is likely to pass on a similar legacy to his successor.

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