Flashpoints across the planet are signaling the return of great-power conflicts of the kind many in the West imagined had been left behind generations ago. Russia’s invasion of Ukraine is stretching into its second year. A ferocious, deadly assault against Israel by Hamas has already claimed thousands of lives in the Jewish state and Gaza, and risks triggering a wider regional conflict with the Iranian regime. China’s appetite for Taiwan looms large, and menacing, across East Asia. Africa is once more a site of competition between East and West.

These developments have pitted liberals against so-called realists—who, in truth, are better described as  “restrainers.” Yet both schools misunderstand the nature of modern power politics and thus risk disserving the nation as it confronts this new age of great-power rivalry.

Liberals in the Wilsonian tradition straddle both political parties. They hope that power politics can be replaced by international law and international organization. And they tend to interpret great-power rivalries as part of a larger ideological confrontation between liberal democracies—the wave of the future—and authoritarian regimes—the relics of the past. Foreign-policy liberalism identifies the American interest with a larger group of nations, united by free trade and democratic government. As President Woodrow Wilson told Congress in his war message in 1917: “A steadfast concert for peace can never be maintained except by a partnership of democratic nations. … Only free peoples can hold their purpose and honor steady to a common end and prefer the interests of mankind to any narrow interest of their own.”

Meanwhile, restrainers, who often call themselves “realists,” tend to fall into three groups: leftists who see America as a force for evil in the world; libertarians who dream of a world of free trade and minimal military budgets; and socially conservative isolationists yearning to restore the kind of decentralized, localized, rural society whose destruction they attribute not to the dynamic of industrial modernization, but rather to the alleged conversion of the American “republic” into an “empire” during the sequence of major conflicts spanning the Civil War to the Cold War.

Start with the restraint camp. Many of these thinkers agree that the United States and perhaps the world would be better off if Washington unilaterally dissolved some or even most of its alliances and downsized its military. Some favor a minimally interventionist policy of “offshore balancing,” according to which the United States would wait until the very last minute, as in World War I and World War II, to “tip the balance” against aggressive would-be hegemons in Europe or Asia. Bottom line, for restrainers, US foreign policy should promote America’s narrow national interest, defined in terms of security from invasion or attack, rather than relative economic power or diplomatic influence.

“All of the members of the great-power bloc needn’t be liberal democracies.”

Neither liberals nor restrainers can justly claim the mantle of realism. A genuine realism rejects the idea that any countries can or should be altruistic armed charities that “prefer the interests of mankind to any narrow interest of their own.” At the same time, genuine realists reject a strategy of restraint that reduces the purpose of American military power to nothing more than protecting US territory from attack. For true realists, building and maintaining a defensible multinational military-economic bloc of its own is essential for a modern great power. But all of the members of the great-power bloc needn’t be liberal democracies, and the bloc needn’t practice free trade, either within itself or with the rest of the world.

The bloc is the informal modern version of an empire, a geopolitical and geoeconomic entity made up of a number of nominally independent states subordinated to a single great power.  Some blocs are flexible and informal, like China’s belt-and-road system of economic dependencies. Others are formalized, like the Washington-led NATO and the US-Mexico-Canada Agreement (the successor to NAFTA). Russia’s post-Soviet Collective Security Treaty Organization and Eurasian Economic Union are likewise formalized blocs, as is the European Union, led by its co-hegemons, Germany and France.

The term nation-state itself is baggy and loose to the point of being meaningless. The same word is used to describe India, China, and the United States, the three most populous countries in the world; small countries like Sweden, with its 10 million souls, 3 million fewer than the population of the Los Angeles metropolitan area; and tiny but formally independent countries like Tuvala, with its 11,000 inhabitants. With its 26 million people, the city of Shanghai alone is more populous than each EU member save for five—Germany, France, Italy, Spain, and Poland. The United States, with 332 million inhabitants in nearly 4 million square miles, isn’t the equivalent of a particular European country—it is the equivalent of the entire European Union, with its population of 448 million and 1.6 million square miles.

As well as differing radically in scale, the countries of the world are functionally specialized to various degrees. Some are manufacturing powerhouses like Japan, South Korea, and Germany. Some are specialized financial service centers like Britain and Switzerland. And others are commodity-exporting economies like Saudi Arabia, Australia, and Brazil. The smaller a country, the less diversified its economy can be, and the more dependent on exports and imports it is likely to be. The share of trade in the economy is much lower in the case of giant, relatively self-sufficient countries like China and the United States than in the case of Spain or Singapore.  This is because internal American trade between Texas and California is the equivalent of cross-border trade between post-Brexit Britain and France.

Countries are specialized militarily, as well as economically. Only a few countries have the combination of high productivity, diversified manufacturing, and large population that defines a great power in the modern world. Great powers like the United States specialize in providing security for allies and clients, which, in turn, spend less on their own defense than they might if they were strategically independent, rather than subordinate to their protector. This seems irrational to many of today’s “realists,” who assume that all countries always seek to maximize their independence and relative power. Why should Washington extend unilateral security guarantees to rich countries in East Asia and Eastern Europe and the Middle East? China or Russia or Iran isn’t going to invade and occupy Florida or California. Why doesn’t Germany spend more on its military, to become less dependent on America? The answer to these questions is that both sides are satisfied with the unequal arrangement, though there may be complaints, as in any marriage. The great power gets deferential protectorates that don’t threaten it and don’t augment the economic or military strength of great-power rivals; the protectorates, as free-riders, can spend money on things other than their militaries.

Members of the restraint school frequently quote President George Washington, in his 1796 Farewell Address, drafted by Alexander Hamilton: “The nation which indulges toward another an habitual hatred or an habitual fondness is in some degree a slave.” But realists ignore the passage in the address where Washington noted that with a common federal union, the American states

will avoid the necessity of those overgrown military establishments, which, under any form of government, are inauspicious to liberty, and which are to be regarded as particularly hostile to republican liberty. In this sense it is, that your Union ought to be considered as a main prop of your liberty, and that the love of the one ought to endear to you the preservation of the other.

In other words, thanks to military and industrial economies of scale, a bigger military alliance can enjoy lower overhead costs for defense than it is possible for smaller independent units to have on their own. These military-industrial cost savings are the necessary, though not sufficient, condition for a less militarized society, limited regimentation of the economy, and more individual liberty. What is true of federal nation-states like the United States can be true of shared security blocs of various kinds—hegemonic alliances or imperial federations or multinational commonwealths. This explains why it is rational for policymakers in Sweden and Finland, frightened by the Kremlin, to seek American protection by applying for membership in NATO, rather than separately arming themselves to the teeth at greater cost.

No US official of the left, right, or center who takes part in formulating foreign policy would agree with taking apart America’s system of military alliances and economic blocs. While Trump reportedly speculated about pulling out of NATO, as president, he followed in the footsteps of his predecessors going back to Richard Nixon in insisting that the Europeans pay more of their fair share of the trans-Atlantic alliance; likewise, he wanted Japan to buy more American goods but not to abrogate the US-Japan security treaty.

For Washington’s bipartisan elite, US foreign policy is made not in the narrowly defined interest of the American nation-state, but in the interest of the American bloc or alliance system, ranged from Okinawa to (now) Ukraine. Just as British foreign policy up to a few decades after 1945 was imperial and commonwealth foreign policy, not the foreign policy of the home islands considered by themselves in isolation, so US foreign policy today seeks to preserve and strengthen and sometimes expand the Pax Americana inherited from the world wars and the Cold War. From this perspective, the preservation of the American bloc as a whole is the foremost US interest in foreign policy. No bloc or empire lasts forever. But in the foreseeable future, restrainers who advocate a policy of radical retrenchment—in which Washington dissolves NATO and abrogates its formal alliances with Japan and South Korea and its informal alliance with Taiwan—will continue to be ignored by US leaders of both parties.

Restrainers, then, go wrong when they want to jettison the foreign allies and bases that the United States has accumulated since 1945—or since the Spanish-American War in 1898. Which brings us to the liberals and their ideological siblings, the neoconservatives. Unlike restrainers, liberals and neocons have nothing against an American-led bloc. But they favor the wrong kind of bloc—a league of democracies that in theory could expand to include the whole planet.

The only difference between neoconservatives and liberals is that neocons want to establish an ever-expanding democratic bloc under US hegemony through unilateral American wars of regime change to topple autocracies, while liberals are drawn to the idea of a transnational and post-national federation along the lines of the European Union. (This explains why so many liberal Atlanticists experienced shock and grief over Brexit; the European Union as the model for the post-national human future was supposed to expand and never contract.)

The neocons fail to see that the United States, despite its many economic advantages and global military reach, isn’t powerful or rich enough to create a unipolar world by brute force and diplomatic intimidation, given the long-term rise of China and India and their resistance to foreign domination. At most, Washington, at the head of its bloc, can aspire to be primus inter pares in a world of multiple blocs. In light of this, far from intimidating Beijing and Moscow, the US wars of choice against feeble regimes from Libya to Iraq and two decades of failed nation-building in Afghanistan must have delighted policymakers in Beijing and Moscow—by diverting and draining limited American strength.

For their part, neoliberal proponents of the free-market Washington Consensus of the 1990s and 2000s failed to foresee that post-Cold War globalization, by enabling Chinese mercantilism and multinational corporate labor arbitrage, would dangerously deindustrialize America, undermining the long-term basis of US military power: a large and diverse manufacturing base.

“Econ 101 models describing an 18th-century agrarian arcadia simply don’t apply to these realities.”

Wilsonian liberals and many libertarian restrainers support free trade as the norm. But in today’s industrial civilization, sound American grand strategy must integrate geopolitics with what Edward Luttwak calls “geoeconomics,” defined as a combination of “the logic of conflict” and the “grammar of commerce.” Free-market, Econ 101 models describing an 18th-century agrarian arcadia simply don’t apply to these realities. Premodern agrarian land empires were simple affairs. The conquerors of old who could seize more farmland and farm workers could raise more in-kind tribute or cash taxes, enabling them to equip and pay more warriors in order to obtain yet more farmland and farm workers.

The logic of industrial imperialism, beginning in the early-modern period with the mercantilist colonial empires of the Netherlands, France, and Britain, has been radically different. The basis of wealth and power in the industrial era consists of advanced dual-use manufacturing, not farmland and farm workers. Unlike agrarian empires, which relied on extensive growth alone, industrial-era empires and blocs rely on both external and internal growth. Increasing-returns manufacturing industries benefit from economies of scale; the larger the scale of production, the lower the marginal cost. And the larger the home market, national or imperial, the easier it is to reap the benefits of economies of scale.

In the age of formal industrial imperialism and colonialism from the mercantilist era to the first half of the 20th century, coercive colonialism—in the form of formal annexation or bullying weak trading partners into submitting to “unequal treaties”—ensured that the consumers in the colonies would be allowed to purchase only the high-value-added manufactures of the metropole. Free trade makes sense for a modern industrial great power only as long as it has an unmatchable lead in high-value-added, dual-use manufacturing, like Britain after 1846 or the United States after 1945. Conversely, as other great military-industrial powers rise to challenge it, the liberal hegemon should abandon free trade and adopt strategic protectionism again, to hold its own in a multipolar world. Britain should have abandoned free trade for strategic trade by the 1890s, in the face of the rise of protectionist America and Germany. And the United States should have abandoned free trade for strategic trade in the 1970s, in the face of often-unfair competition from Japan, South Korea, Taiwan, and West Germany, even before the rise of neo-mercantilist China. In both Britain and America, the political influence of financial interests and overseas investors—the City of London, Wall Street—blocked measures to combat industrial decline.

Eras of relatively free trade have been brief blips in history, associated with the temporary hegemony of a manufacturing superpower like mid-19th-century Britain and the mid-20th-century United States. Most of the time, rising powers need to practice strategic import substitution to create their own industrial bases.  Declining powers should return to strategic import substitution or adopt reciprocal trade policies to prevent their deindustrialization, whether by great power competitors or their own greedy and disloyal corporations and capitalists.

The more national and regional centers of manufacturing power that a great-power bloc or alliance contains, the more productive and secure it will be. In his 1967 memoirs, the celebrated American foreign-policy practitioner and strategist George Kennan argued that the purpose of the Cold War strategy of containment should be to exclude the Soviet Union from 4 of the 5 industrialized regions in which “the sinews of modern military strength could be produced in quantity”—the United States, Britain, the Franco-German Rhineland, and Japan. The goal of containment wasn’t merely to deny the Soviets access to German and Japanese industrial resources by deterring Soviet invasion and occupation. It was also to use a common allied embargo to prevent the Soviet Union from adding German and Japanese manufacturing capacity to its own through peaceful trade. The weapon that was most essential to the victory of America’s Cold War alliance system wasn’t the atomic bomb but the Coordinating Committee for Multilateral Export Controls, which starved the USSR of access to Western markets, technology, and investment. During the first Cold War, America fought proxy wars against the Soviet bloc in Korea and Vietnam, peripheral areas of no intrinsic strategic interest to the United States, in part to reassure Japan and West Germany of American credibility as a protector, to discourage them from drifting into neutrality between the blocs.

Today, the list of industrial cores would be the same—the United States, Britain, the Rhineland, Japan, and post-Soviet Russia—with the addition of China, and, perhaps in time, India. To the geopolitical “strategy of denial” described by Elbridge Colby, the United States should add a geoeconomic “strategy of denial” that discourages America’s major industrial allies from indirectly strengthening China through trade, investment, and technology transfer.

The United States can suffer losses and retreat from exposed positions in the periphery and quickly recover, as it did in Vietnam and recently in Afghanistan. But because of their military-industrial potential, Japan and Germany, now reunited, remain the most important protectorates of the United States. In Asia, the United States has confirmed its military ties with Japan, because a weak, easily intimidated Japan could be bullied by the Middle Kingdom into adding to China’s strength as a technological tributary state. Meanwhile, the role of Germany, the most important industrial powerhouse in Europe, is indirectly at stake in the war in Ukraine.

Before the war escalated in 2022, Germany’s leadership sought to hedge its bets by relying on American military protection, Chinese markets for German goods, and Russian energy imports. That juggling act has failed. Judging by Berlin’s unequivocal, American-style backing for Israel in the Gaza war, and by the Germans’ earlier silence about the question of who blew up the Nord Stream pipeline for Russian gas, a project long opposed by Washington, Germany appears to have sided decisively with the United States. Germany has implicitly agreed to continue to be a semi-sovereign American protectorate, embedded in the NATO alliance and the  EU economic bloc, both of which are expanding to the east.

Some contemporary Germans and other Europeans complain about “vassalization” under American suzerainty. But Konrad Adenauer made the right choice early in the Cold War in rejecting a weak, neutral, united Germany subject to Russian intimidation, in favor of a partial West Germany firmly integrated into the American-led Atlantic alliance. From a self-interested American perspective, it is better for Germany and its neighbors to remain within a consolidated trans-Atlantic bloc than for a geopolitically independent Germany to try to play all sides against each other, or—worse yet—for Europe as a whole to fragment into a chessboard for multiple outside powers, with some countries tilting toward the United States and others tilting toward the People’s Republic of China.

American policymakers have drastically underestimated the actual military power and industrial capacity of China and Russia. The “deficit hawks” of the Peter G. Peterson Institute claim that the U.S. spends more on defense than the next 10 military powers combined. But they rely on misleading market-exchange rates. When the more reliable measure of purchasing power parity is used, as Michael Kofman and Peter Connolly point out, “spending by Russia and China is roughly equal to US defense expenditures, with Russia representing a much larger share than previously recognized.”

And even this may underestimate the military potential of the informal Sino-Russian bloc, according to the French economist Jacques Sapir. Much of what is measured as part of United States and Western European GDP is “paper wealth”—inflated real-estate and stock values, for example. When economic activities irrelevant to military production, civilian manufacturing, mining and processing are excluded, the productive economies of the U.S. and Europe are smaller, and those of China and Russia larger, than they seem.

Merely to maintain and consolidate its European and Asian alliance system, Washington will need to spend more on defense and domestic defense-critical manufacturing and infrastructure and R&D. At the same time, the aging of the American population, by raising the costs of Social Security and Medicare, among other programs, will require higher taxes, more borrowing, or both.

Can America afford both guns and butter? Of course it can. The proxy wars in Korea and Vietnam came with a terrible price in foreign and American lives. But the US economy flourished during the Korean War, when defense spending as a share of GDP rose to 11.3 percent, the Vietnam War (8.6 percent), and the latter stages of the first Cold War (5.7 percent).

Restrainers are right that the appropriate level of spending on unnecessary wars like the US invasion of Iraq is zero. But they are mistaken when they, like deficit hawks, warn of imminent American bankruptcy. The Republican Party has become a lobby for lowering taxes on its rich donors, while both Hillary Clinton in 2016 and Joe Biden in 2020 promised to spare their professional-class supporters by not raising taxes on any households making less than $200,000 (Clinton) or $400,000 (Biden). The real threat to American military power and domestic entitlements alike is political, in the form of bipartisan taxophobia.

In US Foreign Policy: Shield of the Republic (1943), Walter Lippmann wrote: “Foreign policy consists in bringing into balance, with a comfortable surplus of power in reserve, the nation’s commitments and the nation’s power.” Under Trump and now President Biden, the outlines of a post-post-Cold war American grand strategy to reconcile American commitments to American power can be seen. No longer chasing the ignis fatuus of unipolarity, Washington will accept the reality of a multipolar world. At the same time, rather than waste blood and treasure on peripheral wars of regime change, the United States will seek to maintain or expand its Cold War-vintage trilateral bloc, anchored in Europe and littoral East Asia. Rejecting indiscriminate free trade, Washington will try to use strategic industrial policies and embargoes to partly re-industrialize the US homeland, maintain economic integration with its European and East-Asian allies, and minimize Chinese access to the markets, technologies, and finance of the nations of the American bloc. This emergent, and genuinely realist, grand strategy will be too interventionist for restrainers, too non-interventionist for neoconservatives, and too protectionist for neoliberals.

In the longer run, the pattern of world politics is likely to resemble George Orwell’s summary of James Burnham’s theory in The Managerial Revolution, in Orwell’s essay “Second Thoughts on James Burnham,” published May 1946:

The new ‘managerial’ societies will not consist of a patchwork of small, independent states, but of great super-states grouped round the main industrial centers in Europe, Asia, and America. These super-states will fight among themselves for possession of the remaining uncaptured portions of the earth, but will probably be unable to conquer one another completely. Internally, each society will be hierarchical, with an aristocracy of talent at the top and a mass of semi-slaves at the bottom.

In the absence of a global empire or the collapse of industrial civilization, world politics for centuries or millennia to come may take the form of shifting alliances among great-power blocs, like Oceania, Eastasia, and Eurasia in Orwell’s 1984, with periods of cold war alternating with periods of détente. That fate is probably inescapable. Whether human society in the future consists mostly of “a mass of semi-slaves” depends on whether the wage-earning majorities in particular countries, by means of disciplined mass-membership institutions like political parties, labor unions, and religious organizations, are able to exercise countervailing power to restrain the “aristocracy of talent at the top.”

Michael Lind is a columnist for Compact. He is also a columnist for Tablet and the author, most recently, of Hell to Pay: How the Suppression of Wages Is Destroying America.

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