I feel privileged to join you today – to celebrate the success of the Heidelberg Center for American Studies – a fine new institution in a great old university. Not always an easy combination. All honor to those who have made it succeed.
Perhaps it is particularly appropriate that someone should be here from my own university, Johns Hopkins is sometimes called the first German university in America. Founded in 1876, it was our first research university on the German model – the first to offer the Ph.D. degree.
My own school within Johns Hopkins – the Nitze School of Advanced International Studies (SAIS), together with its Bologna Center, has been laboring in transatlantic studies for over sixty years. We are heartened and flattered to find such distinguished new company. My colleagues at SAIS join me in sending you our warmest greetings and congratulations.
One of the greatest advantages of “area studies” is that it more or less demands an interdisciplinary approach. If you want to make sense of what goes on in a country or a region, economics cannot be separated from politics, nor politics from history and philosophy, nor from sociology, literature, art or music. Music, for example: Can any account of the forming of a German nation state in the 19th century be complete without considering the ideas and influence of Richard Wagner? Would Italians have created a nation state without Verdi?
Obviously, no one can master all these dimensions, their linkages, and their distinctive disciplines. One does what one can. But it does help to start with an approach that is sensitive to the interconnectedness of things. A holistic approach is compelled to be more open to the richness and complexity of human affairs. It encourages a more active, less easily satisfied curiosity, perhaps also a greater humility.
Historically, this interdisciplinary approach to history, the very idea of a culture, has been a particular German specialty, associated with the flood-tide of German Romanticism and Philosophical Idealism – with its accompanying politics of liberal nationalism. These ideas form a tradition rich with insight and creativity. Leery as we are of the excesses of nationalism, we should not forget how wonderfully open and generous this early German nationalism was. Think of Herder. His basic message to Germans was: Preserve and honor your own culture, the better to respect and enjoy the cultures of your neighbors. Herder saw “European” culture not as a beautifully manicured lawn but as richly diverse flower-garden, where every nation was its own plant, with its own distinctive flowers, and its own inalienable right to bloom. Herder was, we might say, the first Gaullist good European. He was himself a prodigious and loving student of other cultures – Hebrew, Slavic, Norse, Ancient Greek.
Romanticism, together with its omnivorous curiosity and sympathy, also brought with it a particularly dynamic form of political imagination – a magical capacity for transforming the present into the future, without losing the past. This capacity for creative continuity was a great gift to the moral and political imagination of the West. In our own world, constantly driven to rediscover and redefine itself, we urgently need to regain that Romantic imagination: So that we can continue becoming something new, as indeed we must, without ceasing to be what we have been before. So that we can not only understand, honor and adapt our own traditions, but enter with sympathy into those of our global neighbors, and thereby become more open and sensitive to a broader range of human feeling and experience.
This omnivorous, holistic approach, of course, is not very “academic.” Academic disciplines have a tendency to see less, in order to understand it better – to construct, a priori, a limited but coherent vision of reality, and exclude whatever doesn’t fit within it, to achieve rational clarity by using abstractions to censor reality. Of course, this narrowing of focus is essential to any academic discipline, but has many dangers and should always be challenged.
Otherwise imaginations imprison themselves in a house of abstractions, with windows and doors closed. Communication with other houses gradually diminishes. People grow deaf to each other. What they do not understand, they dislike. Worse, they grow afraid of each other. Something like that, unfortunately, is what has been happening to our transatlantic relationship. Today’s transatlantic difficulties are not merely an unusually heavy load of particular conflicts and grievances. They reflect something more fundamental: basic differences in the way we look at the world. To start with my side of the Atlantic:
Since the collapse of the Soviet Union, the American political imagination has been bemused by a “unipolar” vision of world order – a global system of interrelated states with one clearly dominant “superpower.” America’s power is seen as radically superior to that of any other country, or combination of countries, and fated to remain so for the foreseeable future.
This vision of unipolar power comes in two dimensions, economic and military. The economic was the work of the Clinton administration. The mid-1990’s saw an unprecedented boom, built on high consumption, low saving, heavy investment in new technologies, and fuelled by huge inflows of foreign capital. For the first time since World War II, America’s productivity growth began regularly outpacing that of Europe and Japan. Unemployment was at near-record lows and inflation scarcely visible. When Clinton left office in 2000, the federal budget was pointed toward a large surplus. So much success naturally served to reinforce America’s self-image as the avatar of liberal globalization. True, the U.S. continued to run a large, and growing, external or current account deficit. America’s economy was continuing to absorb – consume and invest – substantially more than it produced. That external deficit had to be financed by an equivalent inflow of foreign capital. In the 1990’s, that seemed not to be a problem. Private foreign investors, attracted above all by the technology boom, regularly flooded the U.S. with more than enough capital to cover the external deficit. Rather than worry about their deficit, Americans could congratulate themselves on the attractiveness of their huge and fast-expanding economy. And although the debts kept growing rapidly, the GDP grew still faster.
This unipolar economic vision has had, all along, its military twin – the U.S. as the only global superpower. Developing this side of the unipolar vision has been the specialty of the Bush administration. Never in modern history, we like to say, has one nation been so militarily predominant as the U.S. is today. American conventional forces, enabled by satellites, now have something analogous to the “shock and awe” achieved by the German Blitzkrieg in the early days of World War II. “Transforming” the American military into such a force has had great aesthetic and intellectual appeal. Having such military predominance has gradually encouraged a geopolitical ambition that corresponds with it. Global hegemony has begun to seem an obligation imposed by history. The power to dominate creates the duty to dominate.
As current events remind us, America’s unipolar visions have lately been having severe encounters with reality. Recent years have, for example, produced severe shocks to our military expectations. Our military transformation to “net centric warfare” seems not compatible with the requirements of our unipolar global role. The invasion of Iraq, however brilliantly executed at the outset, seems in the end to have replaced a rogue state that was being successfully contained with a failed state that requires an indefinite and bloody occupation. Failed states, societies in chaos, obsessed with their grievances, are natural breeding grounds for global terrorism, to which we feel ourselves highly vulnerable.
Of course, we argue that terrorism is an illegitimate form of military power. We should not be surprised if the argument carries little weight with the terrorists themselves. Terrorism is the asymmetric populist weapon, the natural recourse of the weak and dispossessed of this world. Against terrorism our large and spectacularly expensive military establishment is of limited use. It is trained and equipped to attack other military establishments that cooperate by meeting us head-on. But our enemies do not always cooperate. They refuse to fight the wars for which we are so lavishly prepared and they are not. Instead they turn to terrorism – the form of warfare that suits their weakness and mocks our strength.
The U.S. is also vulnerable at the other end of the military spectrum – the realm of strategic nuclear weapons. These, like terrorism, produce highly asymmetrical results. As with terrorism, a perverse military logic works against the U.S. The more America’s overweening military power threatens smaller countries with forcible regime change, the more they seek asymmetric weapons to deter us. As they can no longer fight, toe to toe, against our conventional military power, their options are terrorism on the one hand and nuclear weapons or weapons of mass destruction on the other.
Meanwhile, it is no secret that many of our military leaders feel the U.S. to be already dangerously overstretched. The greater our military victories, it almost seems, the weaker we have grown. In Iraq and Afghanistan, the U.S. has defeated two undoubtedly evil regimes. But, by itself, the U.S. lacks the military power, as well as the political and moral authority, to bring either victory to a tolerable conclusion. To do so will require the military, political and economic assistance of many countries. To enlist those resources requires legitimacy from a genuine consensus in the international community. Under such circumstances, a militarized foreign policy, scorning allies and global institutions, is not very promising.
Well, if the evolution of military power belies a Pax Americana, what about the evolution of economic power? Is the world economy “unipolar?” Recent events and long-term trends suggest otherwise. In 2001, the feverish stock market bubbled and collapsed. The administration and the Congress reacted with substantial tax cuts and, after the atrocities of 9/11, with security spending approaching a Cold War scale. Big fiscal deficits returned, while the big external deficits continued growing. Private foreign investment, however, fell sharply and the dollar with it.
Today, the principal financiers of America’s big external deficit are Japan and China. [Figures] In effect, their central banks finance their own national exports to America. Japan, rich and stagnant, has done this for decades and may well continue. But sooner or later, China, still a very poor country, with a huge internal market of its own to develop, seems likely to find a more satisfactory use of its savings than subsidizing America’s consumption. Without its big Chinese subsidy, the dollar would fall and presumably America’s foreign consumption would falter. This might help to revive manufacturing in America, but also implies a painful drop in living standards. Certainly, the assumption of unlimited resources, implicit in the vision of the unipolar superpower, would be more difficult to sustain. A major breakdown in the world’s financial system could very well follow.
Longer term trends in the world economy also seem in disharmony with the unipolar vision. Respectable projections see the Chinese GDP overtaking the American in a few decades. Nothing, of course, guarantees China’s continuing rapid growth. As has happened so often over the past two centuries, war and revolution may come to rob this gifted people of the fruits of their labor and talent. But if China does collapse, the rest of the world is unlikely to escape unscathed. China could, however, continue growing rapidly for a long time. There is still a huge reserve of Chinese labor to draw on, plus an enormous gap between Chinese and Western wages. China, moreover, has a phenomenal savings rate – some estimate roughly 60% of GDP. China is also becoming a major technological and scientific power in its own right.
China’s continuing success will undoubtedly shake things up in the world. Not only will its GDP eventually overtake that of the U.S., and the EU and perhaps go well beyond either, but its competitive prowess also gravely threatens Western living standards. So what? The postwar rise of Japan and Asia’s “Little Tigers” also disturbed many Western interests. But the competitive adjustments made everyone better off in the end. Why should China’s rise, or India’s for that matter, have different effects?
The answer is that both introduce an unprecedented problem of scale. The earlier rising Asian economies – South Korea, Taiwan, Hong Kong, Thailand, Singapore or Malaysia – had populations of middle-sized or small European states. Even Japan’s population is smaller than that of France and Germany combined. As competition drove Japanese and Western wages toward a common average, the pressure on Japanese wages to go up was much greater than on Western wages to go down. Bringing the huge populations of China and India into the global workforce will have a different impact. The new global average for wages will have a long way to fall from current Western standards.
Naturally, Western workforces will fight to insulate themselves to preserve their living standards and their welfare systems. Under the circumstances, wide-scale protectionism seems a likely political imperative. A world evolving in this way implies not a closely integrated and U.S. dominated world economy but one more segmented and politically regulated. National economies relatively compatible with one another will perhaps group into large blocs, perhaps each around a dominant or common currency, or a relatively stable monetary union. Ideally, these blocs will remain reasonably open to each other. But the occasions for severe conflict – both within countries and among them – will be very great. In short, today’s unfolding trends do not necessarily promise either abundance or peace. Instead, they point to a harsh confrontation between Asian growth and Western prosperity. Compared to these global adjustments coming upon us in this new century, the problems of the last century – absorbing a rising Germany and America – seem comparatively trivial.
Well, what is the upshot of all this analysis? The answer seems simple. Neither economically nor militarily is the world unipolar, nor is it moving in that direction. It is therefore difficult not to regard the whole American unipolar perspective on the future as a serious historic misperception, leading to dangerously dysfunctional policies. If catastrophe is to be avoided in this new century, as the global system grows more plural, and inherently more conflictual, the world’s great powers, rising and declining, must learn to conciliate each others’ reasonable dreams, and develop machinery to anticipate problems before they grow unmanageable. The most promising model is unlikely to be unipolar America’s hegemonic fantasy. But if we are lucky, perhaps it will be something like the currently unfashionable dreams of the European Union.
This brings me to Europe’s vision of the post-Soviet global system. Many Europeans would deny having anything so grandiose as a global vision. Unlike many Americans, who dream of a world that is American, Europeans dream only of Maastricht and Copenhagen – a “Europe that is European.” But this is hardly a trivial ambition. With their EU, European states have been creating a new political formula – a Union of nation states. It is not a federation, or even a federation in the making, but rather an association of free states, increasing their real sovereign power by cooperating. Together, they achieve national aims that they could never hope to achieve alone.
Europe’s Union is a great advance over traditional state systems. It is a community that enables rather than diminishes national sovereignty. It enriches national identity by adding a regional identity. In each of its members, it supplies a kind of institutionalized super-ego to discipline national power, to transform interstate relations from a zero-sum game to one of mutual gain. At the same time, it provides the machinery for elaborating, achieving and protecting national interests in a world of neighbors. In short, the Union becomes a vital element in the constitutional structure of each of its members. It embodies a political technology of great promise, not only in Europe but elsewhere across the globe.
The benefits are great as well for the United States. America’s hyperactive power abroad threatens its own constitutional balance at home. So much military power and financial wealth, combined with an enthusiastically imperial mindset among America’s political elites, threatens to overwhelm the country’s old-fashioned system of national checks and balances. Surely, that is one of the most compelling lessons of the Iraq war. A global super power, it seems, requires a global dimension to its constitution. The more powerful the U.S. becomes, the more a friendly but strong Europe becomes essential not only to limit, refine and reinforce American power in the world, but also to contain it at home. A strong cohesive European Union, with a mind of its own, would itself go a long way toward ending American daydreams of a unipolar world.
In short, Europe and the U.S. have become part of each others’ constitutional balance. The U.S. needs a strong Europe – to preserve its own sanity. Europe, to be sure, also needs the U.S. There would never have been a European confederacy without strong American support. The U.S. was Europe’s silent partner, a guarantor against Europe’s Bad Old Times returning. If Europe and America are to regain their interest and regard for each other, that vital Cold War relationship now urgently needs redefining.
If we fail, as we failed in the Iraq war, we shall end up defeating each other. Instead of a united and balanced West, there will be an overextended and hysterical America and a fragmented and embittered Europe. Given the enormous problems of global adjustment that lie ahead, the West needs to stop failing – to rise to its own great creative political traditions, to put its own house in order. Only thus can we meet the demands of the rest of the world with imagination and generosity.
It is critical, of course, that Europe’s model be saved in Europe itself. Enlarged Europe now faces a fundamental existential crisis. Failure is no longer unthinkable. On the one hand, the challenge is organizational: how to embrace so many diverse countries without losing coherence and direction. On the other hand, the challenge is social and economic: how to preserve the welfare state in a global economy with China and India. Each challenge is also a dilemma. The promise of enlargement has proved the most effective way to stabilize former communist countries, and induce them to rapid and effective transformation toward constitutional governments and market economies. But while enlargement has brought great benefits to Central and Eastern Europe, it has also seriously weakened the EU itself. Some formula needs to be found to restore the EU’s cohesion and direction.
Reforming Europe’s welfare state poses a similar dilemma. Continental Europe’s communitarian state may be a great advance over the more primitive capitalism so vaunted these days in Britain and America. But Europe’s civilized economic model now has to compete within radically more competitive global markets. It needs to reconcile its humane social values with greater economic efficiency. And it will have to use political power to protect its prosperity and its social values, but without destroying its competitive vitality, or its democracy. Here, having the EU should greatly strengthen Europe’s hand.
Protection within an internally liberal but large and diverse bloc risks far less collateral damage to competitiveness than protection on a national scale. Arguably, a new vocation for protectionism may prove the key to restoring the EU to popular favor. So far, more liberalization has been the primary direction of at least the EU’s declaratory policy. But while the “Lisbon Goals” are, no doubt, a necessary and worthy effort to upgrade European labor, as we have seen in the French and Dutch referenda, an EU linked to further liberalization seems not to be a winning proposition politically. Nor, taken alone, does such a policy seem likely to be a practical economic success. Continental Europe’s productivity is already very high. In other words, protectionism seems an inevitable component of any successful European adaptation to the new globalism.
Can a protectionist EU reconcile its needs with those of China? After all, China, too, has a right to grow and blossom. China is itself a huge and rapidly expanding market, with particular opportunities for Western industries. Europe cannot afford to lose those opportunities, to cut itself off from the most dynamic parts of the world economy.
Finding a balance through these conflicting aims and values poses a great intellectual and practical challenge. Europe and America will both need to rejuvenate their creative imaginations, to draw on their deeper reserves of philosophy and history. That is why Europe’s rich postwar experience in supranational institution building is so important for the world, as well as for itself.
You, of course, are the heirs of that experience. It is yours – to use well, or use badly. It begins to look as if your generation is fated to live in one of those historic moments that will either be a great success or a terrible failure. For better or worse, Americans know they cannot hide from shaping history. Europeans must know this too. To play its own proper role, Europe must grow into a more balanced and rounded power, with the collective means – military as well as economic – to make its weight felt more effectively. As Europe grows more assertive and effective, more confident of what its own rich experience has to offer the world, Europe and America should begin to regain their old intimacy. Our imaginations will once more be able to speak freely to each other – to enrich and strengthen one another. Meanwhile, we can hope that our great educational institutions, like yours and mine, have helped to prepare your generation, on both sides of the Atlantic, for the great trials ahead. We can hope that your visions of the future are balanced and humane – and that they do justice to the best of our own past.