Topic: Foreign Policy and National Security

Understanding When China Can (and Can’t) Wield Economic Influence

China Flag SmokestacksAs China grows more economically powerful there is growing concern about how it will convert its economic power into strategic influence. In its 2016 annual report, the U.S.-China Economic and Security Review Commission recommends closer scrutiny of Chinese economic practices and advocates creating a panel to prevent China’s state-owned enterprises from gaining “effective control” over U.S. companies. Fear of China’s commercial influence has recently spread to Hollywood as well, with recent purchases of film studios and theater chains by China’s Dalian Wanda leading to a torrent of commentary warning against Beijing’s nefarious long-term intentions.

The idea that China can easily convert its economic clout into influence is attractive and intuitive given the government’s important role in the economy. In Chinese Economic Statecraft: Commercial Actors, Grand Strategy, and State Control, William J. Norris, a professor at Texas A&M University’s Bush School of Government and Public Service, casts a skeptical eye on this assumption. Norris came to the Cato Institute recently to discuss his theory of economic statecraft and shed light on the complex domestic factors that help or hinder China from using commercial actors to achieve strategic goals. (Full disclosure, as a student at Texas A&M I spent several months as Norris’s research assistant while he worked on the book.) Using a theoretical model rooted in principal-agent theory applied to several case studies, Norris is able to show that China’s political leadership and commercial actors are not always on the same page.  

Economic statecraft is the intentional manipulation of economic interaction to produce or affect some sort of strategic end. Norris finds that effective economic statecraft requires state control over commercial actors and state unity across different sectors of government. While the Chinese government may have nominal control over its state-owned enterprises, it can be very difficult to get local officials in sync with provincial or national-level officials, which impedes the effective execution of economic statecraft. In some of Norris’s case studies Chinese commercial actors made decisions with little direction or oversight from state officials that had unintended strategic effects down the road.

The most important take-away from Norris’s book is, “economic statecraft is not an easy lever of national power for [China] to wield. To be effective, many factors need to align.” China’s economy makes it easier for the government to use its companies in strategic ways, but even in the Chinese system there are numerous factors that make it difficult to use commercial actors to achieve strategic goals. While Beijing has used commercial actors to achieve strategic goals, not every move by a Chinese state-owned enterprise is a strategic master stroke designed to maximize China’s power or undermine the United States. In order to better identify the real cases of Chinese economic statecraft, it would be prudent for analysts to apply the model in Norris’s book. 

Fidel Castro, the Worst of the Worst

Fidel Castro died, finally. His life was consequential, but his death was anti-climactic. The world has been expecting Castro’s demise for at least 10 years when he handed power to his brother Raul because of illness, and Cubans have been waiting far longer. But like Cuban communism, Castro seemingly refused to die, even when his ideas long ago failed to inspire widespread enthusiasm, and indeed led his country to ruin and generated resignation, fear and rejection among Cubans who had to live under the only totalitarian system this hemisphere has ever seen.

Six years ago, Cuban dissident Yoani Sanchez captured the mindset that results from being forced to live according to what most Cubans considered a discredited ideology when she wrote: “Fidel Castro, fortunately, will never return.” To the vast majority of Cubans, Castro, or at least the appeal of his ideas, was already dead.

When I first visited Cuba in 2002 for a series of official and non-official meetings, it became clear to me that nobody there, except maybe two people, believed in communism. The level of cynicism was high, apparently reminiscent of the final years of Soviet socialism, and it was extensive. I met nobody who was pleased with the current state of affairs. That has not changed, though for a time Chavista Venezuela came to the rescue with oil subsidies and other support that are now unreliable with the failure of Venezuela’s own socialist experiment.

There will always be some nostalgia and belief in the region about the legend of Castro being a crusader for the poor and a champion of social equality, but fortunately, the Cuban model in today’s Latin America holds little to no appeal. And the crude reality of Castro’s legacy is more widely recognized than ever before. As the Peruvian establishment newspaper El Comercio noted, Castro was “simply, the bloodiest, most repressive and longest-lasting dictator of Latin America.” And although the authoritarian system he set up has not yet been defeated, his death marks a symbolic endpoint in the worst excesses of 20th century repression in the region.

Fidel Castro represented the worst of the worst of Latin America’s centralizing tradition. In the region’s history, nobody had so much control over so many aspects of people’s lives for so long a period as he did. He achieved it through sheer intolerance and cruelty. From the beginning of the revolution, he did not hesitate to imprison and execute his closest allies, “friends” and even children when it served his purposes. People will debate for a long time how many millions of lives he disrupted, how many thousands of political dissidents he imprisoned, and for how many tens or hundreds of thousands of lives lost he is responsible. But he was a master of deceit and a cunning manipulator of public opinion; in person, he was a “snake charmer” in the words of Peruvian novelist Mario Vargas Llosa. As Yale Professor Carlos Eire notes, “His lies were beautiful and so appealing.”

Here too, he was the most talented of Latin American dictators. Castro justified the worst crimes through the supposed achievement of the greater good—national sovereignty, universal health care and education, social equality, the fight against imperialism, etc. Never mind that the reality was quite different. With all its problems, Cuba, the most developed country in Latin America before the revolution, became relatively less developed and even more dependent on outside powers after the revolution, first on the Soviet Union, then on Venezuela. And if we are to believe Cuba’s official figures, plenty of countries around the world and in Latin America showed equal or greater gains in social development indicators without having to sacrifice civil, political or economic liberties. The extent of control that the communist nomenclatura has over others in society represents an inequality of power that Cuba had never before seen.

Castro knew that much of the outside world would overlook that reality and buy into official myths. He didn’t always lie. The use of moral equivalence in argumentation, or the old trick of suggesting that criticism of the new regime was the same as support for the old status quo went a long way. Castro knew that the world was imperfect and turned Cuba into the focal point of what Latin America had long been: a place where outsiders could project their vision of utopia or express dissatisfaction with the many things wrong in their own societies. In this way, the revolution became useful to intellectuals, journalists, activists, and countless others around the world. In this way also, Castro’s cynicism about the downtrodden, world peace or whatnot was unmatched. As my colleague Juan Carlos Hidalgo notes, just three years ago the regime hosted a summit of Latin American leaders, which called on the region to strengthen human rights and democracy.

How the future will unfold in Cuba is unpredictable, but we can expect its military dictatorship to remain in control in the short term and probably longer. The regime has been preparing for Fidel’s death for the past decade and its repression has increased over the past year. Without Fidel, though, there may be less fear to experiment with change. Whatever change comes about, however, will be undertaken by a regime intent on maintaining power. It will be a task that will be harder and harder for anybody to control.

Castro’s death gives us the opportunity to do as my friend Javier Fernandez-Lasquetty suggests, and pay homage to the millions of Cubans who have suffered under the tyranny he imposed, including writers like Heberto Padilla and Guillermo Cabrera Infante, activists like the Ladies in White or the late Oswaldo Paya, journalists and intellectuals like Antonio Rodiles, and the many, many Cuban dissenters who continue to face despotism with dignity. The world is a better place because of them.

Donald Trump and the Future of U.S. Policy in Syria

Discussion of President-elect Trump’s approach toward Russia, and what that means for U.S. policy in the Syrian civil war, is heating up. Last week, Senator John McCain warned Trump that “the price of another ‘reset’ would be complicity in Putin and Assad’s butchery of the Syrian people.”

Donald Trump doesn’t necessarily see it that way. During the campaign, he tangled with his running-mate Mike Pence over Syria, and late last week Trump admitted that he “had an opposite view of many people regarding Syria,” and suggested that he would withdraw support for anti-Assad rebels, and focus on fighting ISIS.

Although he sometimes speaks derisively of regime-change wars and nation building, Donald Trump is hardly an anti-war dove and there are reasons to believe that his administration will be quite hawkish. At a minimum, he is likely to be receiving advice from many establishment voices who have been urging the U.S. government to play a much more active role in the Syrian civil war.

The president-elect should go out of his way to consider other perspectives. President Obama was caught between wanting to see Bashar al-Assad’s regime overthrown, but not wanting to see violent extremists take its place (for example, Jabhat Fatah al-Sham, formerly known as Jabhat al-Nusra). Unsurprisingly, the Obama administration’s efforts to arm the few factions that cleared the vetting process were an abject failure.

Despite the anxiety surrounding the election, and the expectations that Hillary Clinton would have substantially increased U.S. military intervention globally, the great irony is that Clinton’s foreign policy vis-à-vis Russia and Syria might not have been all that different from Trump’s. Clinton’s so-called smart power would have struggled to find the moderate elements capable of prevailing in the Syrian civil war, and would have struggled to keep them alive once found. She, too, might have dropped the demand that Assad and his followers evacuate the country, and tacitly worked with Russia to target the very worst extremists, including ISIS, a group that poses a threat not merely to Assad, but to many others around the world.

Clinton also would have confronted a skeptical Congress, reflecting the sentiments of a skeptical public. As I note over at The Skeptics, “Some in Congress have pushed back against the executive branch’s occasional zeal for intervention in Syria,” and that is likely to continue. Recall that:

In the late summer and fall of 2013, members of Congress were flooded with phone calls urging them to block U.S. military action there. Obama got the message too, and backed away from his ill-advised red line that would have entailed direct U.S. military action in the civil war.

But the Obama administration continued to funnel money to some anti-Assad rebels. Since then, a few in Congress have tried to cut off funds for the so-called “Syrian Train and Equip” program. An amendment to the Defense Appropriations Bill sponsored by Reps. Tulsi Gabbard (D-HI) and Austin Scott (R-GA) garnered 135 votes from both Republicans and Democrats, despite opposition from party leaders and the White House. It is reasonable to believe that a similar effort would fare even better in the post-election environment.

You can read the whole thing here.

The Demise of Anti-War Liberals?

During the post-World War II period, opposition to U.S. militarism and involvement in dubious military conflicts has usually been stronger on the political left than the right.  Left-wing, anti-war sentiment reached its peak during the Vietnam War, when groups opposed to that conflict could sometimes mobilize tens of thousands of demonstrators.  Opposition to subsequent U.S. military crusades was less robust, but even as late as the Iraq War, there were sizable anti-war demonstrations in the streets.

There have been warning signs for some time, though, that opposition to unnecessary armed conflicts has lost its appeal to much of the political left.  For one thing, there was always a partisan bias to anti-war movements.  Even during the heyday of resistance to the Vietnam War, the criticism became more intense after Republican Richard Nixon took over the White House than it had been when Democrat Lyndon Johnson occupied the Oval Office.  The bias was even more apparent in later decades.  There was far more criticism of Republican George H.W. Bush’s Persian Gulf War than there was of Democrat Bill Clinton’s wars in Bosnia and Kosovo.  Indeed, a distressing number of prominent liberals found reasons to praise Clinton’s military crusades in the Balkans.

The partisan factor has grown even more intense in the twenty-first century.  Left-wing groups mounted a fairly serious effort to thwart Republican George W. Bush’s invasion of Iraq.  But when Democrat Barack Obama greatly escalated U.S. military involvement in Afghanistan and led a NATO assault to remove Libya’s Muammar Qaddafi from power, the reaction was very different.  Except for a few hard-left organizations, such as Code Pink, the sounds coming from the usual supposed anti-war liberal quarters were those of crickets.  Likewise, there has been little push-back to Obama’s gradual return of the U.S. military presence in Iraq or the entanglement of the U.S. military in Syria.

How President Trump Can Fix Veterans’ Benefits Once And For All

Another Veterans Day brought another round of lamentations about the Department of Veterans Affairs and promises to fix it.

President-elect Donald Trump promised to do so throughout the campaign. Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, is skeptical. Veterans are “used to big promises and disappointing results,” he says. “Fixing the VA might be one of the biggest challenges for President Trump. Every president says they’re going to do it, yet we’ve still got a VA with backlogs and massive problems.”

If Trump tries to fix the VA the same way other presidents have, he will fail. But there is a way he can succeed.

Trump’s predecessors failed because they tried to work within a model of top-down, centralized economic planning. The Veterans Health Administration is America’s only purely government-run health system. Its closest analogue is probably the United Kingdom’s National Health Service. The VHA even produces the same results as the NHS: chronic shortages and long waits for care alongside idle and wasted resources, instances of horrific care, and often good care, you know, if you can get it.

Presidents can and have fixed such problems temporarily by moving resources from here to there, or investing in some new system. It never lasts, though. The VHA is a socialist enterprise. Unlike a market system, it has no price mechanism or competitive pressures that automatically fix such problems when they re-emerge. And not only do they always re-emerge, Congress usually takes forever to get off its duff. If Trump retains the VA’s basic structure, he will join a long line of presidents who have failed our nation’s veterans.

How to Privatize the VA 

Trump can distinguish himself from other presidents by working with Congress to create a system of veterans benefits that fixes problems automatically. Here’s how.

First, the federal government should increase military pay sufficient to enable workers to purchase–from private insurers at actuarially fair rates–a package of life, disability, and health benefits equivalent to what the VA provides. Benefits would kick in as soon as they leave active duty and cover veterans’ service-related disabilities or illnesses for life.

Second, having privatized the insurance component of veterans benefits, the federal government should then privatize the delivery component. It should incorporate the VHA as a private company and issue shares to active-duty personnel and veterans based on length of service or other criteria.

You read that right. Military personnel and veterans would literally own the VHA, including its many hospitals and other facilities. Privatizing the VA would both increase the pay of active-duty personnel, and create a massive wealth transfer to active-duty personnel and veterans. Veterans would be able to receive medical care from health systems owned and operated by veterans, for veterans.

Third, the federal government should give current veterans vouchers to purchase insurance and medical care from the insurers and health systems of their choice, including the new veteran-owned and -operated systems.

Privatization Means Better Benefits for Veterans 

Privatization would improve the quality of veterans’ benefits immeasurably.

The federal government promises veterans’ benefits to military personnel once they leave active duty. Only it’s not an explicit promise. And Congress doesn’t fund it. As a result, Congress can–and does–renege on that commitment.

The Enemy Gets a Vote

Resolute Desk

In the week since election night, foreign policy watchers (myself included) have rushed to speculate about the effects that President Trump’s administration will have on the world. The most dramatic effect is the potential upending of the international order that the United States built after World War II. Of course, at this point it is impossible to determine whether or not such a consequence will come to pass, but it deserves consideration.

Baked into the idea that Trump will tear down the international order is the assumption that Hillary Clinton would have maintained the order if she was president. Jeffrey A. Stacey argued as much in Foreign Affairs when he wrote, “The world’s challenges require a determined use of U.S. leadership, not isolationism. And in the areas where Obama’s restraint has failed, the more activist Hillary Clinton Doctrine…could likely prevail.” However, the idea that the United States can influence events through “leadership” ignores the fact that in foreign policy the enemy gets a vote. In other words, the growing relative power of America’s adversaries will still pose a challenge to the international order, regardless of what actions the United States takes or who sits in the Oval Office.

America’s ability to rein in the bad behavior of other states has diminished, not because the United States is in decline, but rather because the power of our adversaries has grown. In East Asia, for example, the two most important challenges to the security status quo are North Korea’s nuclear weapons program and China’s improving conventional military capabilities. Both developments threaten the regional order in East Asia, and resist American attempts to stop them. Multilateral and bilateral sanctions efforts have failed to stop North Korea’s nuclear weapons program, which has come a long way with minimal external assistance.

China’s growing military power enables more assertive behavior in the South and East China Seas, despite displays of resolve by the United States and its allies. While many have criticized the Obama administration for not doing more against China, the simple fact is that as its military grows strong it becomes harder to deter China from using it. Beyond East Asia, after years of neglect following the Cold War, the Russian military is fielding new capabilities and pushing back against NATO expansion to countries along its border.

The growing relative power of America’s adversaries does not make the president obsolete, but the individual behind the Resolute desk is not omnipotent. They cannot always prevent changes in the balance of power or maintain the international order by dialing up the “leadership” they demonstrate. We don’t know what impact Donald Trump will have on the world, but the threats America faces would exist regardless of who won the election. The assumption that Hillary Clinton would be able to prevent negative outcomes through greater leadership on the international stage disregards the growing power and agency of America’s challengers. 

Trump and NATO—Redefining the U.S. Role

Throughout the 2016 presidential election, Donald Trump’s attitude toward NATO has engendered significant consternation throughout both Europe and the U.S. foreign policy establishment. Although the president-elect has not explicitly advocated pulling out of the NATO, he has suggested that the United States should rethink its involvement since the United States continues to bear a disproportionate share of the defense burden within the alliance. The incoming administration could thus be poised to conduct the sort of “agonizing reappraisal” that John Foster Dulles threatened 63 years ago. Although a complete withdrawal from NATO would be unwise, the time to redefine the United States’ role in the alliance may have arrived.

Critics have attempted to undermine Trump’s intimation that he might refrain from defending NATO allies such as Estonia by suggesting that the United States is treaty-bound to do so. The day after Trump’s election, Jens Stoltenberg, NATO’s Secretary General, insisted that “NATO’s security guarantee is a treaty commitment…All allies have made a solemn commitment to defend each other. This is something absolutely unconditioned.” But that is only true to a certain extent. Article V of the North Atlantic Treaty stipulates that in the event of an attack against a NATO member state, each ally “will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.” The key phrase “as it deems necessary” gives the United States a great deal of latitude.

Were the North Atlantic Council to invoke Article V in response to a Russian incursion into Estonia, for instance, the United States could fulfill its treaty obligations in any number of ways. The Pentagon could certainly deploy the U.S. military to combat Russian forces directly. On the other hand, the United States could restrict its role to the provision of military equipment and logistical support to its European allies. To borrow a phrase from Franklin D. Roosevelt, the United States could serve as the great arsenal of NATO.