The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning.

Is There Room for Compromise with Socialism?

by Ludwig von Mises

Private ownership of the means of production (market economy or capitalism) and public ownership of the means of production (socialism or communism or "planning") can be neatly distinguished. Each of these two systems of society's economic organization is open to a precise and unambiguous description and definition. They can never be confounded with one another; they cannot be mixed or combined; no gradual transition leads from one of them to the other; their obversion is contradictory. With regard to the same factors of production, there can only exist private control or public control.

If in the frame of a system of social cooperation only some means of production are subject to public ownership while the rest are controlled by private individuals, this does not make for a mixed system combining socialism and private ownership. The system remains a market society, provided the socialized sector does not become entirely separated from the nonsocialized sector and lead a strictly autarkic existence. (In this latter case there are two systems independently coexisting side by side — a capitalist and a socialist.)

Publicly owned enterprises, operating within a system in which there are privately owned enterprises and a market, and socialized countries, exchanging goods and services with nonsocialist countries, are integrated into a system of market economy. They are subject to the law of the market and have the opportunity of resorting to economic calculation.

If one considers the idea of placing by the side of these two systems or between them a third system of human cooperation under the division of labor, one can always start only from the notion of the market economy, never from that of socialism. The notion of socialism with its rigid monism and centralism that vests the power to choose and to act in one will exclusively does not allow of any compromise or concession; this construction is not amenable to any adjustment or alteration.

But it is different with the scheme of the market economy. Here the dualism of the market and the government's power of coercion and compulsion suggests various ideas. Is it really peremptory or expedient, people ask, that the government keep itself out of the market? Should it not be a task of government to interfere and to correct the operation of the market? Is it necessary to put up with the alternative of capitalism or socialism? Are there not perhaps still other realizable systems of social organization which are neither communism nor pure and unhampered market economy?

Thus people have contrived a variety of third solutions, of systems which, it is claimed, are as far from socialism as they are from capitalism. Their authors allege that these systems are nonsocialist because they aim to preserve private ownership of the means of production and that they are not capitalistic because they eliminate the "deficiencies" of the market economy.

For a scientific treatment of the problems involved, which by necessity is neutral with regard to all value judgments and therefore does not condemn any features of capitalism as faulty, detrimental, or unjust, this emotional recommendation of interventionism is of no avail. The task of economics is to analyze and to search for truth. It is not called upon to praise or to disapprove from any standard of preconceived postulates and prejudices. With regard to interventionism it has only one question to ask and to answer: How does it work?

The Intervention

There are two patterns for the realization of socialism.

The first pattern (we may call it the Lenin or the Russian pattern) is purely bureaucratic. All plants, shops, and farms are formally nationalized (verstaatlicht); they are departments of the government operated by civil servants. Every unit of the apparatus of production stands in the same relation to the superior central organization as does a post office to the office of the postmaster general.

The second pattern (we may call it the Hindenburg or German pattern) nominally and seemingly preserves private ownership of the means of production and keeps the appearance of ordinary markets, prices, wages, and interest rates. There are, however, no longer entrepreneurs, but only shop managers (Betriebsführer in the terminology of the Nazi legislation).

These shop managers are seemingly instrumental in the conduct of the enterprises entrusted to them; they buy and sell, hire and discharge workers and remunerate their services, contract debts and pay interest and amortization. But in all their activities they are bound to obey unconditionally the orders issued by the government's supreme office of production management.

This office (the Reichswirtschaftsministerium in Nazi Germany) tells the shop managers what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. It assigns every worker to his job and fixes his wages. It decrees to whom and on what terms the capitalists must entrust their funds. Market exchange is merely a sham. All the wages, prices, and interest rates are fixed by the government; they are wages, prices, and interest rates in appearance only; in fact they are merely quantitative terms in the government's orders determining each citizen's job, income, consumption, and standard of living.

The government directs all production activities. The shop managers are subject to the government, not to the consumers' demand and the market's price structure. This is socialism under the outward guise of the terminology of capitalism. Some labels of the capitalistic market economy are retained, but they signify something entirely different from what they mean in the market economy.

It is necessary to point out this fact in order to prevent a confusion of socialism and interventionism. The system of interventionism or of the hampered market economy differs from the German pattern of socialism by the very fact that it is still a market economy. The authority interferes with the operation of the market economy, but does not want to eliminate the market altogether. It wants production and consumption to develop along lines different from those prescribed by an unhampered market, and it wants to achieve its aim by injecting into the working of the market orders, commands, and prohibitions for whose enforcement the police power and its apparatus of violent compulsion and coercion stand ready.

But these are isolated acts of intervention. It is not the aim of the government to combine them into an integrated system which determines all prices, wages, and interest rates and thus places full control of production and consumption into the hands of the authorities.

The system of the hampered market economy or interventionism aims at preserving the dualism of the distinct spheres of government activities on the one hand and economic freedom under the market system on the other hand. What characterizes it as such is the fact that the government does not limit its activities to the preservation of private ownership of the means of production and its protection against violent encroachments. The government interferes with the operation of business by means of orders and prohibitions.

The intervention is a decree issued, directly or indirectly, by the authority in charge of the administrative apparatus of coercion and compulsion which forces the entrepreneurs and capitalists to employ some of the factors of production in a way different from what they would have resorted to if they were only obeying the dictates of the market. Such a decree can be either an order to do something or an order not to do something.

It is not required that the decree be issued directly by the established and generally recognized authority itself. It may happen that some other agencies arrogate to themselves the power to issue such orders or prohibitions and to enforce them by an apparatus of violent coercion and oppression of their own. If the recognized government tolerates such procedures or even supports them by the employment of its governmental police apparatus, matters stand as if the government itself had acted. If the government is opposed to other agencies' violent action, but does not succeed in suppressing it by means of its own armed forces, although it would like to suppress it, anarchy results.

It is important to remember that government interference always means either violent action or the threat of such action. Government is in the last resort the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.

This article is excerpted from Human Action (1949). An MP3 audio file of this article, narrated by Jeff Riggenbach, is available for download.

No further comment necessary

A Dire Warning

This environment is rife with moral hazard.

The Financially Driven Erosion of Scientific Integrity

By Bill Frezza

All else being equal, if you pay for something bad, you will get more of it. If you punish something good, you will get less of it. These basic rules of economics apply as much to junk science and scientific integrity as they do to junk food and political candor.

Science and the scientific method are the jewels in the crown of Western civilization. The ascertainment of facts, construction of reproducible experiments, development of falsifiable theories, impartial training and meritocratic advancement of practitioners, and - most importantly - integrity of the publication process by which a well established body of truth can be confidently assembled all underpin the respect accorded to science by the citizenry. In modern times, this respect translates into tax dollars.

Unfortunately, today those tax dollars are corrupting the process. Unprecedented billions are doled out by unaccountable federal and state bureaucracies run by and for the benefit of a closed guild of practitioners. This has created a moral hazard to scientific integrity no less threatening than the moral hazard to financial integrity that recently destroyed our banking system.

According to a report in Nature Reviews Drug Discovery, nearly two-thirds of the experimental results published in peer-reviewed journals could not be reproduced in Bayer's labs. The latest special issue of Science is devoted to the growing problem of irreproducibility. The Wall Street Journal reports that Amgen, Pfizer, and others have abandoned research programs after spending hundreds of millions pursuing academic research that could never be replicated.

And, of course, there is the heated controversy over claims of impending doom made by climate scientists, each trying to out-sensationalize the other as they bid for taxpayer money to fund their research. Declaring an active area of investigation "settled," demonizing critics, and promoting unfalsifiable theories may qualify as topics of study within political science, but they are alien to the scientific method. This kind of behavior imperils not just the scientific community. When translated into international policy, it imperils the entire global economy.

Exactly what is going on here? To find out, we must analyze the motivations and behaviors that lead scientific investigators first to job security and academic freedom and, sometimes, onward to fame and fortune.

Tenured faculty at our research universities sit at the pinnacle of the scientific community, acting as Principal Investigators (PIs) on government-supported research projects. To become a PI, one must serve an undetermined number of years as an indentured apprentice, first as a graduate student and then as a post-doc. Pleasing one's PI is the key to graduation, publication, and advancement.

The lion's share of actual laboratory work is done by these apprentices. PIs preside over the process. They formulate theories, as they try to become the first to plant a flag in virgin research territory. Well-funded PIs assign apprentices to conduct experiments that will confirm their theories, sometimes assigning multiple teams to work on the same project in parallel. They write grant applications seeking to expand their domain along with the number of apprentices they can support. And they put their names on all the papers that come out of their fiefdoms, acting as gatekeepers in the process.

Fame goes to those that publish first, not necessarily those that do the best, most thorough, or most reproducible science. Grants go to those with the most fame. The work of PIs who publish novel work in prestigious journals may be peer-reviewed, but it is rarely replicated by their fellow PIs.

For some PIs, life gets even better. Thanks to the Bayh-Dole Act of 1980, PIs can patent the results of their work even if it was supported with tax dollars. The benefit to society is that both venture capital and industry investments can be attracted to translate breakthroughs into the market that might otherwise languish in academia if they were unprotectable.

The downside is that some peripatetic PIs make a specialty of dashing about planting broad and vague patent land mines. These PIs may never reduce a single idea to practice, but the mines they plant sit and wait to extract tribute from future entrepreneurs who do. Either way, personal fortunes can be made.

This environment is rife with moral hazard.

While outright data fabrication does occur, it is rare. The bigger threat to scientific integrity is the temptation to cherry pick results as they are produced by a Darwinian horde of apprentices clamoring for admission into the guild. Failed experiments never get reported, the definition of failure sometimes including results that call a PI's pet theories into question. Confirmation bias pervades the process much more so than in industry since the consequences of spending billions drilling a dry hole are severe.

But what are the consequences for publishing a paper with irreproducible results? What becomes of tenured PIs whose junk science leads us down blind alleys, polluting the literature while precipitating hundreds of millions of dollars in someone else's losses?

They write another grant application.

Searching for utopia

Europe's Predicament Is Similar to Ours

By Robert Samuelson

We Americans fool ourselves if we ignore the parallels between Europe's problems and our own. It's reassuring to think them separate, and the fixation on the euro - Europe's common currency - buttresses that mind-set. But Europe's turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created. It's ultimately a crisis of the welfare state, which has grown too large to be easily supported economically. People can't live with it - and can't live without it. The American predicament is little different.

Government expansion was one of the 20th century's great transformations. Wealthy nations adopted programs for education, health care, unemployment insurance, old-age assistance, public housing and income redistribution. "Public spending for these activities had been almost nonexistent at the beginning of the 20th century," writes economist Vito Tanzi in his book "Government versus Markets."

The numbers - to those who don't know them - are astonishing. In 1870, all government spending was 7.3 percent of national income in the United States, 9.4 percent in Britain, 10 percent in Germany and 12.6 percent in France. By 2007, the figures were 36.6 percent for the United States, 44.6 percent for Britain, 43.9 percent for Germany and 52.6 percent for France. Military costs once dominated budgets; now, social spending does.

"Survival of the fittest" no longer sufficed. Europeans have never liked markets as much as Americans do. In the 1880s, German Chancellor Bismarck created health, old-age and accident insurance - landmarks regarded as originating the welfare state. The Great Depression discredited capitalism, and after World War II, communists and socialists enjoyed strong support in part because they "had formed the backbone of wartime resistance movements," writes Barry Eichengreen in "The European Economy Since 1945."

To flourish, the welfare state requires favorable economics and demographics: rapid economic growth to pay for social benefits and young populations to support the old. Both economics and demographics have moved adversely.

The great expansion of Europe's welfare states started in the 1950s and 1960s, when annual economic growth for its rich nations averaged 4.5 percent compared with a historical rate since 1820 of 2.1 percent, notes Eichengreen. This sort of growth, it was assumed, would continue indefinitely. Not so. From 1973 to 2000, growth settled back to 2.1 percent. More recently, it's been lower.

Demographics shifted, too. In 2000, Italy's 65-and-over population was already 18 percent of the total; in 2010, it was 21 percent, and the projection for 2050 is 34 percent. Figures for the European Union's 27 countries are 16 percent, 18 percent and 29 percent.

Until the financial crisis, the welfare state existed in a shaky equilibrium with sluggish economic growth. The crisis destroyed that equilibrium. Economic growth slowed. Debt - already high - rose. Government bonds once considered ultra-safe became risky.

Switch to the United States. Broadly speaking, the story is similar. The great expansion of America's welfare state (though we avoid that term) occurred in the 1960s and 1970s with the creation of Medicare, Medicaid and food stamps. In 1960, 26 percent of federal spending represented payments for individuals; in 2010, the figure was 66 percent. Economic growth in the 1950s and 1960s averaged about 4 percent; from 2000 to 2007, the average was 2.4 percent. Our elderly population was 13 percent in 2010; the 2050 estimate is 20 percent.

What separates the United States and Europe is that (so far) we haven't suffered a backlash from bond markets. Despite high and rising U.S. government debt, Treasury securities still fetch low interest rates, about 2 percent on 10-year bonds. Will that last? It's true that cutting spending too quickly might threaten a fragile economic recovery. But President Obama and Congress can't be accused of making this mistake. They do little and excel at blaming each other.

The modern welfare state has reached a historic reckoning. As a political institution, it hasn't adapted to change. Politics and economics are at loggerheads. Vast populations in Europe and America expect promised benefits and, understandably, resent any hint that they will be cut. Elected politicians respond accordingly. But the resulting inertia poses an economic threat, one already realized in Europe. As deficits or taxes rise, the risk is that economic instability will increase, growth will decline, or both. Paying promised benefits becomes harder. Or austerity becomes unavoidable.

The paradox is that the welfare state, designed to improve security and dampen social conflict, now looms as an engine for insecurity, conflict and disappointment. Facing the hard questions of finding a sustainable balance between individual protections and better economic growth, the Europeans have spent years dawdling. The parallel with our situation is all too obvious.

Who’s more deluded

Britain vs Iran: the politics of nostalgia

Iranian students who think Britain’s still an imperial threat, or British ministers who fantasise that Iran is EVIL?

by Tim Black

Yes, a US spy-drone really was shot down over the weekend, to the barely disguised glee of the Iranian authorities on the one hand, and the ‘we wondered where it had got to’ embarrassment of the US on the other. And yes, a student stage-army really did break into the British Embassy in Tehran last week and smash a portrait of the British head of state, Elizabeth II, much to the manufactured glee of a few hundred Iranian protesters and manufactured outrage of the British foreign secretary, William Hague.

Yet despite the contemporary reality of the stand-off, it appears a little too rich in political nostalgia. It’s as if both sides are desperate to fight old battles, desperate to reinvent older certainties in the midst of so much contemporary uncertainty.

So, the ransacking of the British Embassy has been eagerly compared by some commentators to the 1979 storming of the US Embassy in Tehran, when supporters of Ayatollah Khomeini held US staff in captivity for 444 days. Likewise, Britain’s response to the embassy attack, with Hague puffing his tiny chest out and ‘expelling’ Iranian diplomats from London, seemed like an excited attempt to pose once again as an important player on the world stage.

On the part of the Iranian state, the whiff of wilful historical re-enactment is also difficult to dispel. ‘Death to Britain’ was reportedly one of the chants in the Iranian parliament last week, following the announcement of further Western sanctions against Iran. As the BBC’s John Simpson reports: ‘The speaker of the Iranian parliament, Ali Ardashir Larijani, said the attack on the embassy was Britain’s fault for interfering in Iran’s affairs and trying to dominate it over the decades.’

If Hague and Co would like to imagine Britain as an important world power, it seems their Iranian counterparts are only too happy to help out. The attack on the British Embassy, allegedly encouraged by parts of the Iranian regime, can be seen then as an attempt to reinvent Britain as the imperial enemy of yore. This is not 2011 anymore, when Britain’s impotence in the Middle East has been apparent throughout the tumult in Egypt, Syria and elsewhere. It is 1913, when Britain really was confident enough a power to draw up a contract which made Iran’s oil fields British property. Or perhaps it’s 1919, when still-imperial Britain annexed the Iranian treasury and army. Or even the 1950s, when the decision of Iran’s democratically elected leader Mohammed Mossadegh to nationalise the oil industry and rid Iran of Anglo influence prompted Britain and the US effectively to engineer Mossadegh’s downfall.

So although Britain has not been an imperial power proper for at least 50 years, parts of the Iranian state, beset by considerable internal problems both economic and political, are only too keen to portray it as such. On both sides of this stand-off, then, there is mutual gain. The West, with Britain to the fore, can act tough and moral towards that one-time pivot in then-President George W Bush’s ‘axis of evil’; and conservative elements in Iran, striving to hang on to and justify their power, can act tough and moral towards various sizes of Satan.

Of course, this current, barely diplomatic dispute has occurred within the broader narrative of the West’s recently revamped crusade to rid the world of nuclear weapons. And, like the current stand-off, this broader narrative has provided Western leaders with the chance to pose as forces for good, as leaders with moral purpose. Indeed, in April 2009, US president Barack Obama announced to the world that it was his ‘agenda to seek the goal of a world without nuclear weapons’. This, he said, was a ‘moral responsibility’.

The current Western antagonism towards Iran stems from the attempt to exercise this ‘moral responsibility’. Not that Iran actually has a nuclear weapon. The problem, it seems, is that the Iranian government might be trying to manufacture one. As Patrick Hayes reported on spiked recently, this was the dubious finding of the West’s weapons inspectorate last month. The International Atomic Energy Agency (IAEA) reported that Iran had supposedly carried out tests ‘relevant to the development of a nuclear device’. That the IAEA did so on the basis of intelligence which ends in 2003, that it relied on documents that the Israelis conveniently found on a laptop, and that the claim itself that the explosion chamber supposedly used for nuclear testing was disputed by a former IAEA chief inspector… all this was disregarded by the US, Britain and Europe in their rush to fight the good fight against the mad, bad and dangerous of Iran.

So, on 17 November, the UN issued a resolution urging Iran to ‘comply with all of its obligations under international law’ and to ‘cooperate with states seeking to bring to justice all those who participated in the planning, sponsoring, organisation and attempted execution of the plot’. That wasn’t enough for the US, Canada and UK which, a week later, announced a new raft of economic sanctions against Iran, effectively freezing Iranian assets abroad and refusing to do business with Iranian banks. And then last week, the EU, with the UK and France leading the charge of the morally light brigade, declared further measures to deal with the none-too-obvious threat of Iran, namely freezing assets of Iranian companies and individuals, and implementing travel bans.

While some commentators appear to be keen to re-enact a bit of history of their own, viewing the current round of moral posturing and rusty sabre rattling as a replay of the run-up to the Iraq War, this use of nuclear-weapon ownership to demarcate morally responsible nations from the morally irresponsible and immature hordes actually has its own distinct post-colonial function. It allows, under the conditions of the 1968 Nuclear Non-Proliferation Treaty, the West, or at least the permanent members of the UN Security Council (America, Russia, China, France and Britain), to continue to divide the world up between the civilised and uncivilised. It’s just that the mode in which this divide is expressed is no longer racial, but moral: there are some nations mature and responsible enough to possess nuclear weapons, and some, such as Iran, which are not.

This is no doubt why of the 22,000 nuclear warheads estimated to be knocking around the world, Russia has 12,000, the US 9,400, France 300, China 240 and Britain 185, with Israel, Pakistan and India sharing somewhere in the region of 250. Iran, the dread enemy of the month, the current threat to world peace, has precisely… none. And the only country actually to have used a nuclear weapon against people? That remains the ‘moral responsibility’ of the US when it bombed Hiroshima and Nagasaki in 1945.

The phoney battle with Iran does have a contemporary reality, then. But it is not the one of current historical fantasy; it is the reality of the West’s purpose-seeking leaders. Befuddled before the economic crises gripping the developed world, the chance to pose, on the basis of nuclear-weapon ownership, as the righteous guardians of world peace has proven too alluring. Iran is not the Iran of 1979 in this historic re-enactment. It is merely the token opponent in Western leaders’ desperate struggle for moral authority.

Quote of the day

Paragraph of the Year

From Reihan Salam:

To really learn from the Chinese, and to enjoy such staggering growth rates, we should go about things differently: let’s have a Maoist insurrection followed by a civil war that lasts for several years. Then let’s destroy most of the wealth in the country, and drive out millions of our most enterprising and educated citizens by launching systematic terror campaigns during which millions of others will die in violence or of starvation. Next, let’s have a modest economic opening in coastal regions: impoverished citizens will be allowed to launch small-scale township and village enterprises and components will be assembled in a handful of cities by our stunted descendants. Then let’s severely curb those township and village enterprises because they represent a potential political threat and invite large foreign multinationals and state-owned enterprises [let's not forget those!] to work our population to the bone at artificially suppressed wage rates, threatening those who complain with serious reprisals up to and including death. Let us also initiate a population control policy designed to improve our dependency ratio for a few decades. As large numbers of workers shift from low-value agricultural work to manufacturing, we will experience … rapid growth! Mind you, getting from here to there will involve destroying an enormous swathe of our present-day GDP. And that sectoral shift from rural to urban work will run out of gas pretty fast, as will the population control policy that will guarantee rapid aging.

There’s nothing I find more annoying than people who talk about how we need to learn from China’s “success.”  I’m all for learning from other countries, but can we please focus on actual success stories (Denmark, Switzerland, Singapore) and not a country that is much poorer than Mexico.

Something has to give

Guess Which Country Has Debt Of Nearly 1000% Of GDP...

Congo has had a bad time with the modern world

A Non-Election In A Non-Country

WALTER RUSSELL MEAD

Welcome to the “Democratic Republic” of the Congo, called the world’s least developed country in the United Nations. (Eat your heart out, Afghanistan.) Elections here are a joke, and not a funny one. The most recent presidential and parliamentary vote is currently being counted, but early reports sound familiar: The incumbent president is accused of rigging the vote and intimidating the opposition; an opposition leader claims an early victory without evidence; deaths are reported on all sides of the political divide; and even the UN, despairing, left the management of the election to an ally of the current president.

Even worse? The ballots have too many names on them, making the ballot cards themselves too bulky to fit through the slot of the plastic tub meant to collect votes. 15,000 people are running for Parliament, eleven for president.

Joseph Kabila, the DRC’s current president

That was the story from central Africa during this week’s Congolese elections. The vote, scheduled to begin and end on one day, had to be extended because many polling stations, deep in the bush, were late in receiving ballot cards. The NYT reports:

Joseph Kabila, 40, Congo’s president for the last 10 years, is incredibly unpopular in many parts of the country, especially the innumerable slums that dominate Kinshasa, the capital.But all signs point to him trying to hold onto power, at all costs.His soldiers have already killed several opposition supporters, including up to nine this weekend during an election-related fracas. United Nations officials and other election observers say Mr. Kabila’s men are stuffing ballot boxes, intimidating voters and bribing people to vote for the president…Corrupt politicians and businessmen permeate the highest levels of society. In every indicator measuring democracy and prosperity in countries around the world, Congo ranks at or near the bottom.

“Organize” is the wrong verb to describe the process of preparing this election. Many polling stations were deep in the countryside; election monitors reported some citizens walking for days to cast their vote. As the Guardian reports:

Some 35m ballot papers printed in South Africa and 186,000 ballot boxes made in China have to be distributed to 63,000 polling stations in a country two thirds the size of western Europe. There is minimal transport infrastructure, but they will do whatever it takes: using foreign helicopters, dugout canoes and boxes balanced on heads carried along bush paths.

The sheer waste of resources involved in shipping ballots by helicopter to people who can barely read for an election that will be rigged is a fascinating testimony to the power of ideology over reality in the do-gooding world of the international development bureaucracy, but an expensively fraudulent election is hardly the most costly or the most disastrous intervention that well-intentioned bureaucrats have imposed on Africa in sixty years of serially flawed “development” initiatives.  But to believe that this process will lead to an effective democratic government in the DRC is as misguided though perhaps as touching as the belief of certain New Guinea tribes that by building fake landing strips and hangars they could lure more cargo rich airplanes out of the skies when the end of World War Two terminated Allied use of New Guinea as a transshipment route for the war effort.  No doubt the “development professionals” and NGO staff earning high five and low six figure salaries feel competent and fulfilled as they bustle pointlessly about, shuffling and counting papers; no doubt that many a memo will be written and many a report produced by people who think they are accomplishing something; no doubt the New Guinea tribes thought hard about the best places to put the fake landing strips.

(One purpose of serious educational reform in the western world would be to reduce the number of professionally credentialed people who can’t tell the difference between pointless make-work and displacement activity on the one hand and on the other, actual progress on making the world a better place.  Far too many college kids think that working for a “development” NGO is a way to change the world.)

King Leopold II of Belgium (1835-1909)

Congo has had a bad time with the modern world. The despicable Belgian monarch King Leopold II ruled Congo as a personal fiefdom and inspired Joseph Conrad’s masterpiece Heart of Darkness; George Washington Williams, an African-American writer helped expose his grotesque misrule and force the king — who today would likely be indicted for crimes against humanity — to give up personal control of the colony.  Things have not gotten all that much better in the last 100 years.  The Belgians who succeeded Leopold misgoverned the country about as badly as any Europeans misgoverned anything in the 20th century.  When they left, ethnic internal conflicts, the discovery of vast mineral wealth, and Cold War tensions produced some of the worst governments and bloodiest wars of the era.  Of all the places where the US tolerated and even supported despotic, murderous, corrupt and incompetent rulers in the interests of containing Soviet influence, Congo perhaps had it worst.  After the Cold War the eastern part of the country got caught up in the genocidal Hutu-Tutsi conflict; the chaotic power vacuum in mineral rich eastern Congo drew in mercenaries and arms from all over the region as various African governments sought control over strategic terrain or important mineral deposits.

The central government has never really run the whole country. Much of the country lacks access to basic services. In one of the more depressing illustrations of the unfulfilled dreams of modern Congo, in 2006 the country’s experimental nuclear reactor outside Kinshasa was “protected” by a rusting chain link fence filled with holes, an open front gate, a “security guard” clad in a tracksuit, and a single key giving access to a few bars of highly enriched uranium, two of which vanished in the 1970s.

Congo today is mostly devoid of hope for progress. Millions have died to keep this shambolic country going. Breaking it up along regional or ethnic lines would challenge the fragile unity of other African multi-ethnic states, perhaps plunging this part of the continent into wider conflict. But holding it together may just be a different route to the same destination.

Rebuilding that “shining city on a hill”

The End of the American Era

By Stephen M. Walt [2]

THE UNITED States has been the dominant world power since 1945, and U.S. leaders have long sought to preserve that privileged position. They understood, as did most Americans, that primacy brought important benefits. It made other states less likely to threaten America or its vital interests directly. By dampening great-power competition and giving Washington the capacity to shape regional balances of power, primacy contributed to a more tranquil international environment. That tranquility fostered global prosperity; investors and traders operate with greater confidence when there is less danger of war. Primacy also gave the United States the ability to work for positive ends: promoting human rights and slowing the spread of weapons of mass destruction. It may be lonely at the top, but Americans have found the view compelling.

When a state stands alone at the pinnacle of power, however, there is nowhere to go but down. And so Americans have repeatedly worried about the possibility of decline—even when the prospect was remote. Back in 1950, National Security Council Report 68 warned that Soviet acquisition of atomic weapons heralded an irreversible shift in geopolitical momentum in Moscow’s favor. A few years later, Sputnik’s launch led many to fear that Soviet premier Nikita S. Khrushchev’s pledge to “bury” Western capitalism might just come true. President John F. Kennedy reportedly believed the USSR would eventually be wealthier than the United States, and Richard Nixon famously opined that America was becoming a “pitiful, helpless giant.” Over the next decade or so, defeat in Indochina and persistent economic problems led prominent academics to produce books with titles like America as an Ordinary Country and After Hegemony.¹ Far-fetched concerns about Soviet dominance helped propel Ronald Reagan to the presidency and were used to justify a major military buildup in the early 1980s. The fear of imminent decline, it seems, has been with us ever since the United States reached the zenith of global power.

Debates about decline took on new life with the publication of Paul Kennedy’s best-selling Rise and Fall of the Great Powers, which famously argued that America was in danger of “imperial overstretch.” Kennedy believed Great Britain returned to the unseemly ranks of mediocrity because it spent too much money defending far-flung interests and fighting costly wars, and he warned that the United States was headed down a similar path. Joseph Nye challenged Kennedy’s pessimism inBound to Lead: The Changing Nature of American Power, which sold fewer copies but offered a more accurate near-term forecast. Nye emphasized America’s unusual strengths, arguing it was destined to be the leading world power for many years to come.

Since then, a host of books and articles—from Charles Krauthammer’s “The Unipolar Moment,” G. John Ikenberry’s Liberal Leviathan and Niall Ferguson’sColossus to Fareed Zakaria’s The Post-American World (to name but a few)—have debated how long American dominance could possibly last. Even Osama bin Laden eventually got in on the act, proclaiming the wars in Iraq and Afghanistan fatal blows to American power and a vindication of al-Qaeda’s campaign of terror.

Yet for all the ink that has been spilled on the durability of American primacy, the protagonists have mostly asked the wrong question. The issue has never been whether the United States was about to imitate Britain’s fall from the ranks of the great powers or suffer some other form of catastrophic decline. The real question was always whether what one might term the “American Era”was nearing its end. Specifically, might the United States remain the strongest global power but be unable to exercise the same influence it once enjoyed? If that is the case—and I believe it is—then Washington must devise a grand strategy that acknowledges this new reality but still uses America’s enduring assets to advance the national interest.

THE AMERICAN Era began immediately after World War II. Europe may have been the center of international politics for over three centuries, but two destructive world wars decimated these great powers. The State Department’s Policy Planning Staff declared in 1947 that “preponderant power must be the object of U.S. policy,” and its willingness to openly acknowledge this goal speaks volumes about the imbalance of power in America’s favor. International-relations scholars commonly speak of this moment as a transition from a multipolar to a bipolar world, but Cold War bipolarity was decidedly lopsided from the start.

In 1945, for example, the U.S. economy produced roughly half of gross world product, and the United States was a major creditor nation with a positive trade balance. It had the world’s largest navy and air force, an industrial base second to none, sole possession of atomic weapons and a globe-circling array of military bases. By supporting decolonization and backing European reconstruction through the Marshall Plan, Washington also enjoyed considerable goodwill in most of the developed and developing world.

Most importantly, the United States was in a remarkably favorable geopolitical position. There were no other great powers in the Western Hemisphere, so Americans did not have to worry about foreign invasion. Our Soviet rival had a much smaller and less efficient economy. Its military might, concentrated on ground forces, never approached the global reach of U.S. power-projection capabilities. The other major power centers were all located on or near the Eurasian landmass—close to the Soviet Union and far from the United States—which made even former rivals like Germany and Japan eager for U.S. protection from the Russian bear. Thus, as the Cold War proceeded, the United States amassed a strong and loyal set of allies while the USSR led an alliance of comparatively weak and reluctant partners. In short, even before the Soviet Union collapsed, America’s overall position was about as favorable as any great power’s in modern history.

What did the United States do with these impressive advantages? In the decades after World War II, it created and led a political, security and economic order in virtually every part of the globe, except for the sphere that was directly controlled by the Soviet Union and its Communist clients. Not only did the United States bring most of the world into institutions that were largely made in America (the UN, the World Bank, the IMF, and the General Agreement on Tariffs and Trade), for decades it retained the dominant influence in these arrangements.

In Europe, the Marshall Plan revitalized local economies, covert U.S. intervention helped ensure that Communist parties did not gain power, and NATO secured the peace and deterred Soviet military pressure. The position of supreme allied commander was always reserved for a U.S. officer, and no significant European security initiative took place without American support and approval. (The main exception, which supports the general point, was the ill-fated Anglo-French-Israeli attack on Egypt during the Suez crisis of 1956, an adventure that collapsed in the face of strong U.S. opposition.) The United States built an equally durable security order in Asia through bilateral treaties with Japan, South Korea, Australia, New Zealand, the Philippines and several others, and it incorporated each of these countries into an increasingly liberal world economy. In the Middle East, Washington helped establish and defend Israel but also forged close security ties with Saudi Arabia, Jordan, the shah of Iran and several smaller Gulf states. America continued to exercise a position of hegemony in the Western Hemisphere, using various tools to oust leftist governments in Guatemala, the Dominican Republic, Chile and Nicaragua. In Africa, not seen as a vital arena, America did just enough to ensure that its modest interests there were protected.

To be sure, the United States did not exert total control over events in the various regional orders it created. It could not prevent the revolution in Cuba in 1959 or Iran in 1979, it failed to keep France from leaving NATO’s integrated military command structure in 1966, and it did not stop Israel, India, North Korea and Pakistan from acquiring nuclear weapons. But the United States retained enormous influence in each of these regions, especially on major issues.

Furthermore, although the U.S. position was sometimes challenged—the loss in Vietnam being the most obvious example—America’s overall standing was never in danger. The U.S. alliance system in Asia held firm despite defeat in Indochina, and during the 1970s, Beijing formed a tacit partnership with Washington. Moreover, China eventually abandoned Marxism-Leninism as a governing ideology, forswore world revolution and voluntarily entered the structure of institutions that the United States had previously created. Similarly, Tehran became an adversary once the clerical regime took over, but America’s overall position in the Middle East was not shaken. Oil continued to flow out of the Persian Gulf, Israel became increasingly secure and prosperous, and key Soviet allies like Egypt eventually abandoned Moscow and sided with the United States. Despite occasional setbacks, the essential features of the American Era remained firmly in place.

Needless to say, it is highly unusual for a country with only 5 percent of the world’s population to be able to organize favorable political, economic and security orders in almost every corner of the globe and to sustain them for decades. Yet that is in fact what the United States did from 1945 to 1990. And it did so while enjoying a half century of economic growth that was nearly unmatched in modern history.