We are entering a new phase of history. It is assuredly not the "end of history,"1 a silly notion based on a series of mistaken assumptions (that the death of communism means the definitive triumph of Western liberalism, the end of ideology, and the coming of a "boring" era of material concerns and unheroic squabbles); it is a period in which the discrepancy between the formal organization of the world into states and the realities of power, which do not resemble those of any past international system, will create formidable contradictions and difficulties.

Miles Kahler indicates why even the shift from traditional goals and tools to economic ones is not likely to lead to peace and quiet. First, there is a huge array of possible "traditional" quarrels, in a world where there is at least still one ideology of violent conflict-Islamic fundamentalism-and where the disappearance or decay of secular ideologies leaves nationalism, over much of the planet, as the only glue of loyalty. The Arab-Israeli conflict, Kashmir and Cyprus are daily reminders of gloomy forms of permanence. Evidence of the declining utility of force for the superpowers and for other major actors, such as the nations of Western Europe and Japan, may not deter those for whom passion overruns cost-benefit analysis, and those for whom force seems the only alternative to despair, humiliation, or destruction. If one remembers that the increased economic capabilities of smaller states, alluded to by Joseph Nye in his latest book,2 allow them to buy or build formidable modern arsenals and to make themselves largely independent of arms shipments by fickle superpowers-and if one believes, as Robert W. Tucker and I do, that the latter, no longer chasing each other all over the world, may play less of a moderating role in such regional conflicts now that their potential as triggers of a superpower collision has vanished-there is then no reason to expect that the traditional arena of world politics will be empty or boring-except, perhaps, strangely and happily enough, in Europe, prophets of recurrent doom notwithstanding.3

Second, the realm of interdependence will also breed conflicts that could be serious. Among the advanced countries, the different strategies chosen by the main players in the quest for market shares and wealth may become incompatible if they lead to permanent imbalances. This is already the message of the so-called revisionists who point out that the Japanese brand of neomercantilism-which subordinates the interests of consumers to those of producers, entails a deliberate and long-term strategy aimed at gaining the lead in advanced technologies, and results in a "continued displacement of industrial sectors and the shift of technological capability toward Japan"4-may not be reconcilable with America's consumer orientation, lack of industrial policy and lesser "ability to adapt quickly to changing circumstances."5 Conflicts over trade and industrial policy ultimately involve as stakes both the power of states, since wealth is a component of power (even though the uses of economic power are often constrained or capable of boomeranging), and the fate of labor at home. Without the restraining force exerted by the Cold War and by the need of West Europeans and Japanese for American protection, such conflicts could become acute.

The potential for trouble, not between the "North" and "South," but between the advanced countries and certain groups of less-developed ones, is equally serious. It is often said that the poorer among the latter cannot cause much harm, whatever they do. This may be true, in cases other than oil, if harm is defined in purely economic terms. But radical anti-Western ideologies could turn fiercely against the institutions and agents of Western capitalism; also, the weakness and heterogeneity of some of these states and the pressure of increasing populations, may well lead to violent regional conflicts, as well as to formidable quarrels over immigration and refuge to and expulsions from the richer countries. Two of the problems that have become urgent, drugs and the environment, could all too easily lead to confrontations between advanced states eager to protect their health and their future, and states such as those of South America that need to cultivate drugs, or to forgo strict protection of the environment, in order to develop.

Third, the conflicts between state and people must be taken seriously, too-not only because popular or populist attacks on ill-constituted states and unacceptable governments, or governmental attempts to divert such attacks, could lead to interstate troubles, but also because the victory of "people power" is neither a guarantee of moderate behavior abroad nor at all guaranteed. Popular victories can trample over minority rights and create nationalist explosions. Conversely, democratic revolutions may wilt if the winners get bogged down in party squabbles and parochial issues, or else caught between the "demands" of the world business civilization and domestic discontent, and replaced by authoritarian or military rulers. This, in turn, may be bad, both for regional peace and for the cause of human rights.

II

It is not possible for Americans to walk away from these problems simply because none of them concentrates the mind and creates a danger for our physical security comparable to the Soviet threat. The role of the United States will have to be quite different from that of the past forty years, and the reasons Tucker gives for rejecting both a policy defined in traditional balance of power terms and a mission of world policeman are compelling. However, an American total retreat toward domestic reform would be a serious moral and political mistake, comparable to the return to isolationism in 1919-1920. Indeed, the scope of American involvements abroad (however much the end of the Cold War may allow us to reduce them)-"ethnic empathy toward various parts of the world, popular sympathies for the underdog,"6 and the pressure of interests affected by the global economy-make such a full retrenchment unlikely.

On the other hand, the changes in power that have been stressed in the current discussion limit the ability of the United States to set the rules and to provide the solutions. As John Zysman noted in a recent article,7 the shift from military to economic influence hurts the United States, insofar as others depend less on American military technology, and in the economic realm a United States deep in debt is far from the free giant it was after the war; our ability to extract foreign policy gains from economic power has dropped, and we depend increasingly on foreign sources for important products and technologies. The various failures of American policy have their roots in the place that is the real locus of America's decline: not imperial overstretch, nor any catastrophic fall in aggregate figures of material resources, but the domestic components of power-low savings; insufficient productive investments, especially in leading sectors; the obsession of business with short-term profits; a poor system of technical education; and, above all, a failing capacity to mobilize tangible and intangible resources, which results from the bad state of American infrastructure (especially urban), popular resistance to taxation and a lack of leadership.

The United States, after a decade of celebration of its ability to deal with the world's problems by its own means, finds itself in a bind. The three principles that have guided its foreign policy-American exceptionalism, anticommunism and world economic liberalism-are of little help, because others are less receptive, or because "victory" has made anticommunism irrelevant, or because the market itself is the problem (as in U.S.-Japanese relations) or provides no answers (as in ecological matters). Persisting with the trade and budget deficits increases American dependence on creditors; eliminating those deficits would require either measures that would disrupt the world economy (protectionism) or decisions that would bring about a complete and painful reorientation of American fiscal and industrial policy. If U.S. statesmen do not address the domestic issues that deeply worry the people but that, in the absence of leadership, leave it adrift, America's ability to affect world affairs positively will decline further, and we will find ourselves on a road comparable to that on which the Soviet Union is now skidding. However, if the United States addresses its internal problems, the resources it will need to raise will not be available for external purposes. America faces a heavy bill, the product of the weaknesses of its own unregulated and often uncalculating economic systems, of those of its decentralized and byzantine political system, and of the Cold War.

The tensions, contradictions and conflicts described here will therefore not be manageable unless we find the methods and found the institutions of planetary governance that are now indispensable. Laissez-faire and the invisible hand are not capable of resolving such issues as population growth and movements, the environment's destruction, famines and epidemics and the distributional effects (among and within states) of the "business civilization." It is of course true that the demands of the people and the short lives of democratic governments make multilateral cooperation difficult, but they also make it necessary. At this stage, the states remain the only legitimate public authorities and mobilizers of public resources, but the problems they face-those I have just mentioned, but also those of "megascience" and large-scale technology, discussed by Kenneth H. Keller-demand cooperative solutions. Moreover, the very dynamism of the world economy and its restless reallocation of wealth and power require the same kind of political control at the global level that the "political realm" of authority, the state, provides at the country level; and that control, too, can come, so far, only from a pooling of state efforts.

It is therefore, to use Richard N. Gardner's terms, for a "comeback of liberal internationalism" that one must plead.8 Each person may have his or her own favorite blueprint, but the main directions are clear. Among the advanced countries (including-or rather, and also-the Soviet Union), the main tasks will be, first, the establishment of a new security system in Europe, which will probably be a mix of a much-reformed NATO no longer dominated by the United States, a Western European defense organization, and an organization set by the Conference on Security and Cooperation in Europe; second, an agreement among the main suppliers of arms and advanced technologies to restrict such sales drastically, to strengthen the nuclear nonproliferation regime, and to establish regional arms limitation and conflict resolution regimes; third, a deal to redistribute power-now still largely in the hands of the United States-among the main actors in the international financial and economic organizations, the United States, Japan, and the European Community.

The end of the Cold War and of the straitjacket of worldwide East-West security concerns should allow the advanced countries to concentrate their efforts on social, economic and political conditions in an increasingly diversified "South." Both ecological imperatives and the issue of the population pressure of the poor and the refugees require a set of bargains, thanks to which ample resources will, through multilateral assistance and with the participation of the leading private firms, be made available to the developing countries, in exchange for commitments on environmental protection, health care, energy efficiency, agricultural productivity and human rights. The demands on the resources of the richer states-caught between the needs and expectations of their own people and the fear of external chaos-will be both so large and so conflicting that organizations for regional and global cooperation will have to be strengthened, through guaranteed revenues, the creation of independent secretariats, and frequent high-level meetings.

What is proposed here is very much a halfway house: not a world government for which states and peoples are unprepared (and that the managers of the world business civilization would not like), but a new experiment in polycentric steering, in which the three major economic powers-plus the Soviet Union if it overcomes its problems, and perhaps China once it begins to turn its potential into effective power (something that would require drastic political changes)-would form a central steering group, and in which regional powers would play comparable roles in their areas. Nothing like this has ever been tried-but then, the hidden theme of this essay has been the advent of discontinuity in international affairs.

Two big question marks remain. First, will a development of multilateral diplomacy and institutions not merely add a layer to the three-the global market, the states, the people-that exist already, and simply add cooperative inefficiency to market inequities, state erosion and popular discontent? Will it help global unification or make for more fragmentation (including, now, among international and regional agencies)? The risk exists; the example of the European Community shows that where the will can be found, the danger can be overcome. Second, will the United States be willing to commit itself, and sufficient resources, to such a path? The answer could be yes, on two conditions: if adequate leadership can at last be provided-leadership that would understand and explain that, as Kahler puts it, "unilateral American action is likely to be less effective, and the workings of an untrammeled market . . . less desirable than . . . international collaboration"; and if domestic reform to provide for the underpinnings of power is undertaken. Without such reform, popular turbulence and resentments against competitors will mount. To be sure, such reform will require fiscal sacrifices, and while it absorbs attention and funds, America's own contributions to the needs of others might remain limited. But none of America's problems at home or abroad can be solved if "people power" is equated with no new taxes; and in the immediate future, one of the welcome effects of the diffusion of power is the ability of Western Europe and Japan (already the largest donor of foreign aid) to play a larger role.

III

The world after the Cold War will not resemble any world of the past. From a "structural" point of view-the distribution of capabilities-it will be multipolar. But the poles will have different currencies of power-military (the Soviets), economic and financial (Japan and Germany), demographic (China and India), military and economic (the United States)-and different productivities of power-demographic power is more a liability than an asset, the utility of military might is reduced, only economic power is fully useful because it is the capacity to influence others by bringing them the very goods they crave. Moreover, each of these poles will be, at least to some extent, mired in a world economy that limits its freedom of action. What we do not know is what relations are going to develop among these actors, what institutional links they will set up to manage their relations with one another, and their relations with the rest of the world, in a context of vigilant, demanding and often turbulently mobilized masses. The fate of this new world will depend on the ability of the "poles" to cooperate enough in order to prevent or moderate conflicts, including regional ones, and to correct those imbalances of the world economy that would otherwise induce some states, or their publics, to pull away from or to disrupt the momentum of interdependence. Above all, it will depend on domestic currents that remain highly difficult to predict. Since foreign policy today is so largely shaped by domestic demands and expectations, the most dangerous remaining tension, and the most difficult to overcome, is that between the global dimension of the issues that foreign policy will have to deal with and the fact that political life remains, at best, limited to the horizons of the state and is, often, even challenging the unity, the borders and the effectiveness of the state.

The world is like a bus whose driver-the global economy-is not in full control of the engine and is himself out of control, in which children-the people-are tempted to step on either the brake or the gas pedal, and adults-the states-are worried passengers. A league of passengers may not be enough to keep the bus on the road, but there is no better solution yet.

2 See Joseph Nye, Bound to Lead (New York: Basic Books 1990), ch. 6.

5 Edson W. Spencer, "Japan as Competitor," Foreign Policy, Spring 1990, p. 165.

6 Charles W. Maynes, "America Without the Cold War," Foreign Policy, Spring 1990, p. 13.

7 "Redoubling the Bet," BRIE Working Paper, no. 38 (Berkeley: University of California, January 1990), p. 20.

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  • Stanley Hoffmann is Professor of Government, Harvard University. This article is adapted from the author's essay in Sea-Changes: American Foreign Policy in a World Transformed, published by the Council on Foreign Relations.
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