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Volume XVI, No 4, Winter 1999/2000
At the beginning of the new millennium, it is apparent that no state or alliance of states is soon likely to vie with the United States for hegemony as that term is traditionally understood. The suggestions, first widely advanced during the 1980s, when the great Japanese bull market coincided with Deng Xiaoping's moves to open the Chinese market to capitalism, that the twenty-first century would "belong" to Asia—"a Japanese head on a Chinese body" was the way one Latin American political leader put it—was only an extreme example of this kind of overheated prognostication. Today, when the Japanese economy is hobbled both by intractable structural economic constraints and the imminent prospect of a falling birth rate turning into a demographic meltdown, and when the political stability of China is very much in doubt, it is easy to look back with bewilderment at the triumphalist claims once so routinely made about Asia. And yet the current infatuation of at least some policymakers and analysts with the prospect that a united Europe will soon become a serious competitor to the United States is at least as questionable. Obviously, given its economic strengths, the comparative advantage that it (or at least its rentier class) is almost certain to derive from the fact that many European corporations have not yet benefited from the restructuring that has already taken place in America and the high educational levels of the core states of the European Union, it is possible that the Old Continent may indeed turn out to be the twenty-first-century colossus. But there are flaws in this scenario. For however determined Western Europeans are to go on imagining otherwise, the end of the Cold War means that Europe no longer ends at the Oder and at Trieste, and that its future is inseparable from that of the far less favored states of Eastern and Southeastern Europe, the western republics of the former Soviet Union, and the Russian Federation itself.
Back in 1993, I had coffee with one of Pablo Escobar's men. He's dead now (or at least pretending to be), so I suppose I can tell you his name was Juan Fernando Toro. As we sat in a corner restaurant in Medellín, Colombia, Toro was writing excitedly on a napkin. "Look! Now that the border is open to Venezuela, I can nearly double my profits! I can buy a kilo of cocaine—a good one, made with ether and acetone—for $1,200." He jotted a quick balance sheet on the napkin: Transport of a kilo of cocaine to New York on a small plane, $8,000. Sale price in New York, $18,000. Profit, $8,800.
"Now, I make a lot more money if I send that same kilo through Venezuela," Toro said, scribbling: Transport to Maracaibo or Caracas, $600. Shipment to New York, $2,000. Profit, $14,200. So, I was looking at one happy trafficker. It cost him $600 to send a kilogram of cocaine to Venezuela. But the shipping from Venezuela to the United States was only $2,000, instead of $8,000 from Colombia. To send dope directly from Colombia to the United States in a small plane cost a million dollars a trip. But drugs left Venezuela for the United States on regularly scheduled cargo ships and airliners, which were not strictly vetted by U.S. Customs officials. And Toro's profit per kilo jumped from $8,000 to $14,200.
Things were going to get even better, said Toro. César Galviria, who was then Colombia's president, was negotiating a free trade pact with Mexico and Venezuela. "Soon, I'll be able to ship through Mexico right to the U.S.!" Toro said with childlike enthusiasm.
I remember not believing him at the time. Colombian traffickers controlled cocaine distribution in the United States practically down to the street level. Why cut the Mexicans in? They were not better qualified to be traffickers; certainly they were no more ruthless than the Colombians. Unfortunately for him, Toro was killed by enemies of Pablo Escobar before he could prove his point. The rest of the infamous "Medellín cartel" was similarly dismembered, and so it was the Cali group of traffickers that went on to make the Mexican connection. Just months after the North American Free Trade Agreement (NAFTA) came into force, on January 1, 1994, 80 percent of the cocaine for the U.S. market was entering the country through Mexico, according to the U.S. Drug Enforcement Administration (DEA).
Then I understood Toro's strategy. It was not that Mexicans were better smugglers than the Colombians, nor that Mexican officials were more corrupt. In economic jargon, the Mexican
The start of Economic and Monetary Union (EMU) has produced a sea change in European affairs. After all, for 11 countries to voluntarily share their monetary policy is an unprecedented endeavor. And while some aspects of EMU are, by necessity, shrouded in uncertainty, the signs are that this gamble has paid off.
Let's be clear about this: EMU has been a success. The doomsayers got it wrong. It has boosted investment and innovation in the euro zone, strengthened cooperation among its participants on budgetary policies, facilitated progress toward the creation of an integrated European capital mar- ket, and advanced the broader process of economic reform.
Given the substantive importance of the issues involved, it is logical that EMU has, for some years now, been a hotly debated topic. Unfortunately, this active debate has largely ignored EMU's effects on the outside world. And yet, analyzing these external repercussions is vital. It is obvious that EMU is having a significant impact on monetary and financial policy, trade relations, and in the broader geostrategic sphere.
It is therefore imperative for both Europeans and Americans to think through the implications, both economic and political, of this bold project. This exercise should be based on the recognition that the start of EMU, on time, with as many as 11 countries, was never a foregone conclusion. Indeed, until early 1998 many seasoned observers—especially those in the English-speaking world —thought it would never happen, or would at least be postponed. But strategic commitment and political determination saw the project through.
The corollary of this emphasis on will- power is that EMU is the monetary equivalent of the romantics' blood pact. To the wider world, EMU often represents an act of European self-assertion even if its origins can clearly be located in intra-European considerations. Some, especially on the political right in the United States, seem disturbed or even opposed to EMU and warn of its possible detrimental effects for U.S.-European relations.1 However, if managed adroitly, EMU will promote, not obstruct, effective transatlantic cooperation. But before we can assess EMU's external implications, we must first establish what exactly has changed with the launch of the euro.
Iran's reformist President Mohammad Khatami is in a bind. He has been elected to office by a nation yearning for, and demanding political change. He is encumbered by a Soviet-style centrally planned economy in need of a fundamental overhaul. Yet he is faced with a political establishment full of conservative incumbents resisting significant reforms. Unlike much of Eastern Europe, which experienced the momentum of simultaneous political and economic change after the fall of communism, and unlike much of East Asia, which embraced market capitalism long before it attempted democratization, Iran has experienced a slow but steady transition toward democracy before there have been any real attempts to institute economic reforms. This puts Iran in a difficult position. Because it no longer has an autocratic leadership, as in East Asia, nor Eastern Europe's revolutionary momentum, it has not been able to undertake necessary economic reforms. But if it does not do so, there is little doubt that its economy will continue to deteriorate, inevitably generating political instability.
It is clear that continued regional stability and political reform in Iran are in the interest of the United States. The Clinton administration has recognized the positive political changes in Iran and has attempted to refashion its foreign policy accordingly. So when Khatami came to power, Washington began to make political overtures to Iran, hoping that President Khatami would respond. But the distribution of power in Iran suggests that any U.S. feelers will go unanswered. The United States is not able to support the reformists directly because "anti-American" conservatives are still powerful in Iran, and the U.S. government's backing would be detrimental to the reformist side in Iran's internal power struggle.
In formulating its Iran policy, therefore, the United States must consider not only what leeway Iran's reformist president has but also the country's economic structure and recent changes in its political economy. American policy should aim at strengthening the reformists in Iran without at the same time attempting any direct political involvement. It is in the interest of the United States to take the courageous yet logical next step in its Iran policy: without reestablishing political ties, the United States should lift the economic sanctions against Iran.
PROFILES
No member of George W. Bush's foreign policy team is more important than Condoleezza Rice. A member of the National Security Council during the first budding of the Bush dynasty, Rice went on to prove her management skills at Stanford University, where she has served as provost. Now she is seen as slated to become national security adviser or secretary of state in a Bush administration should George W. defeat the Democratic nominee for president in 2000. Even the conservative National Review, usually wary of Bush Republicans, as opposed to Reaganite ones, has swooned over Rice, declaring that she is headed for stardom.
For Republicans, Rice is something like the feminine version of Colin Powell. Tough, engaging, dynamic, and articulate, she is a foreign policy hawk, pro-choice, but also devoutly religious (in her words, "a pro-choice evangelical"). She has been carefully groomed by, among others, Brent Scowcroft, President Bush's national security adviser, to ascend the conservative escalator of success.
The intellectual who wants to counsel a powerful leader is a familiar character in history. In most societies, intellectuals-turned-counselors have incited wars or championed peace by gaining the ear of a leader they putatively serve. For such intellectuals, the chance to become the voice behind the throne exerts a magnetic pull. The lure of influence drew Seneca to Nero and Voltaire to Frederick the Great, and now it has drawn Leon Fuerth to presidential aspirant Al Gore. Fuerth is national security adviser to the vice president, and has been staff adviser to Gore on foreign policy since 1984. He has worked for Gore longer than anyone else—indeed, long enough to earn the privilege of addressing him as Al.
But unlike other intellectuals who have counseled other leaders, Fuerth has found that his boss is not a tabula rasa upon which he can impress his ideas. Rather, Gore listens to the cautious calculations of Fuerth and then marries that analysis to his own idealistic instincts. Gore's foreign policy—call it "pragmatic meliorism"—results from their dialogue.
REPORTAGE
RECONSIDERATIONS
Fifty miles across the Pearl River estuary from Hong Kong lies the ancient city of Macao. First settled by the Portuguese in the 1550s, it will be handed back to China on December 20, 1999. This small European enclave on the South China Sea played a small and long forgotten role in U.S. history; on July 3, 1844, the first Chinese-American treaty, known as the Treaty of Wang Xia, was negotiated and signed here. Two and a half years ago, the Chinese made much of the fact that their recuperation of sovereignty over Hong Kong marked the final abrogation of the 1842 Chinese-British Treaty of Nanjing, whereby China had ceded Hong Kong to Queen Victoria "in perpetuity" and was forced to pay $12 million for having "obliged" the British to wage war on them, as well as compensation to the tune of an additional $6 million for the cost of the opium seized from British merchants and destroyed by the Chinese authorities—the original casus belli of the "Opium War."
In contrast, the Treaty of Wang Xia was not punitive; and the United States—with its own anticolonial past strongly in mind—acquired the same "most favored nation" status in China that the British enjoyed, not by force of arms but by convincing the Chinese that it sought no unfair ad- vantage and, above all, did not seek territory.
In July 1844, Caleb Cushing, a congressman from Massachusetts and a forceful advocate for the China trade merchants of his state, and the Imperial commissioner Qiying met at the old Temple of Kun Iam, which today faces onto a busy avenue toward the center of the small peninsula on which Macao stands. At that time, the temple lay within the Chinese village of Wang Xia, just outside the seventeenth-century walls of Macao city but well inside the territory controlled by the Portuguese. Kun Iam, as she is known in Macao, is the Buddhist Kwan Yin, Goddess of Mercy and Queen of Heaven. The image of the goddess, dressed in the robes of a Chinese bride, is set above the altar table in the smoky inner third chamber of the temple, where, on a side wall, a long glass case contains the gold lacquer figures of 18 Chinese wise men, including Marco Polo—whose statuette has bulging round eyes, a largish nose, and a small curly beard intended to denote his European origin. Beyond the temple's maze of shrines, lies a garden with a round stone table, four simple granite stools, and a plaque written in Chinese that mark the spot where the treaty of "peace, amity, and commerce" was signed by Caleb Cushing and Qiying.
The Treaty of Wang Xia gave American cargo ships access to the five Chinese treaty ports, only recently forced open to foreigners as a result of the Opium War, and it also gave Americans the right to construct hospitals, churches, and cemeteries in China, a privilege the missionaries who served as Caleb Cushing's translators in Macao were especially anxious to obtain. The Imperial commissioner Qiying had been China's representative at the acrimonious Nanjing negotiations, and his large entourage of sol- diers, servants, officials, and advisors was lodged at the Temple of Kun Iam during the negotiations with Cushing.
The Treaty of Wang Xia, which governed the American relationship with China until 1905, committed the United States and China "to a perfect reciprocity" and was concluded with the utmost cordiality in less than two weeks. As Qiying wrote to Cushing when inviting him to take "fruit and tea" at the temple of Kun Iam: "This conduct is vastly different from that of the English taking and keeping possession of Hong Kong...."
The British officials based in Hong Kong had implied that the Chinese could not be trusted to police their own agreement since it was insinuated in London that they had signed one document with the British, but then published a different version for the use of their own customs officials. Cushing thought it "a harsh construction to suspect the Chinese of such an act." The problem, he thought, had more to do with the "want of care on the part of the English translators." Daniel Webster, the U.S. secretary of state, had given Cushing careful instructions: "You are a messenger of peace, sent by the greatest power of America to the greatest empire in Asia to offer respect and good will and to establish the means of friendly intercourse." It is a pity that no senior U.S. public official in recent decades has taken the short helicopter flight to Macao across the Pearl River estuary from Hong Kong and stopped by at the Kun Iam Temple. It would do no harm at all to think back to the Treaty of Wang Xia once in a while, or to the good will the United States could once count on, in its less bellicose days.
BOOKS
On the twentieth anniversary of the so-called normalization of relations between the United States and China, Secretary of State Madeleine K. Albright gave a toast at a reception held by the Chinese embassy in Washington. The Chinese ambassador had given an uncharacteristically warm toast to mark the occasion. But Albright used the opportunity to highlight the recent arrest of four democracy activists and stressed that Sino-American relations would never be truly normal until China started to respect human rights. According to another senior Clinton administration official, who had argued unsuccessfully against Albright making such a toast, dismay spread across the face of the Chinese ambassador and an opportunity to inject a positive note into the troubled relationship had been lost.
When I heard this story recently, I thought it reflected the peculiar character of Albright and her penchant for lecturing foreign dignitaries. Indeed, the anecdote was related to me by someone who viewed it as an undiplomatic moment for the nation's top diplomat. But after reading two new books by fellow journalists about the history of U.S.-China relations since President Richard Nixon's time, I realized that it was a quintessential moment in the history of the ties between the two nations. It reflected not only a split in the American policymaking establishment, but a vast cultural and political gap between Washington and Beijing.
About Face, by Los Angeles Times correspondent James Mann, and A Great Wall, by New York Times correspondent Patrick Tyler, both provide provocative accounts of just how peculiar the Sino-American relationship is.
The "new industries...work up...raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In the place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal interdependence of nations."
Parts of this passage may sound like a recent commentary on globalization. But the words are a century and a half old. They are from Karl Marx's Communist Manifesto, first published in 1848. And Marx, it should be remembered, unlike many critics of globalization today, was not unenthusiastic about capitalism's global reach. Thus he welcomed what he called the "social revolution" that British rule was bringing to India, "not so much through the brutal interference of the British tax-gatherer and the British soldier," as through the working of "English steam and English free trade." Even though "sickening as it must be to human feeling" to witness India's complex traditional social organizations disintegrate, Marx had no doubt that this "only social revolution ever heard of in Asia" would ultimately benefit India. "The day is not far distant," he wrote, enthusiastically, "when by a combination of railways and steam vessels, the distance between England and India, measured by time, will be shortened by eight days, and when that once fabulous country will thus be annexed to the Western world."
It is perhaps a sign of how much the effects of past waves of globalization have become a part of our everyday world that many contemporary commentaries on globalization are profoundly ahistorical, as if capitalism had never run roughshod over established political and cultural boundaries before. We have been told that globalization today is homogenizing the world—eliminating age-old differences between societies and cultures and ending national and international politics as we have known them. Yet many aspects of our twentieth century world bear the imprint of a number of earlier waves of globalization. After all, long before what is today being called globalization we had arrived at a world where it made sense to speak of a "world system" or a global political economy—a world that Marx, in the passage cited above, saw coming.
Economic production and consumption in distant parts of the globe have been connected for a long time. There is a familiar model of institutions of national governance everywhere—e.g., presidents and prime ministers, Western-style legal systems and military organizations—and a state-system premised on it has become universalized. Furthermore, cultural norms associated with words such as "modernization" and "democracy" have had global resonance for quite a while.
CODA