Your humble blogger has been busy at the U.S. Army War College's annual conference on The Future of American Landpower ... at which he's heard a lot about cyberattacks. So at the risk of violating one of my own maxims, I want to write one post about this whole cyber business. Because the more I apply my monkey brain to this, the more dubious I get about how it's being talked about, and I want to try to work my way through this. 

First, if we're living in a world where the director of national intelligence thinks it's the number-one threat out there ... well, let's face it, then it's not a very scary world, is it? I mean, if industrial espionage has replaced terrorism as the biggest national security threat facing the United States ... meh. I don't want there to be industrial espionage, but let's face it, this ain't the kind of Cold War-level threat that I hear bandied about so frequently. 

But, to be fair, I think concerns about "cyber" aren't just about the industrial stuff -- it's attacks on critical infrastructure and so forth. Except now we need to step back and ask under what circumstances such attacks would occur. There are terrorists of course -- which means that this is a old threat in a new domain. There are state actors -- which means that this is an even older threat in a new domain. Terrorists will most likely attempt such attacks when the opportunity arises. State actors presumably would not attempt such actions on a full-bore scale unless there were actual military hostilities. Cases like Stuxnet fall in between ... into espionage and covert action. 

So, can international norms about cyberattacks be negotiated? I know NATO is trying something like this with the Tallinn Manual, and I know the United States is insisting that the laws of war apply to cyberdomains. I suspect that this has a chance of working in regulating real world interstate military conflicts, because, with any shadow of the future, most states are prepared to obey most regimes most of the time. 

But let's face it -- most of the concerns about cyber aren't about what happens if a war breaks out. The concerns are about regulating such attacks during peacetime, which means this is about regulating intelligence-gathering, espionage, and covert actions. Now, let me just list below the number of international regimes that establish the rules, norms and procedures for regulating these kind of activities:

...

Nada. Zip. Nothing. Or, as one journal article more delicately put it, "espionage is curiously ill-defined under international law." 

That's because espionage can't really be regulated. For any agreement to function, violators have to be detected and punishment has to be enforced. In the world of espionage, however, revealing your ability to detect is in and of itself an intelligence reveal that states are deeply reluctant to do. 

So I don't think negotiations will work, and I sure as hell don't think smart sanctions will work either. Most of what concerns us about cyber falls under the espionage and covert action category, and that's never been regulated at the global level. 

What am I missing? Seriously, what -- because what I just blogged is highly subject to change. 

An out-of-control shadow banking system that's been barely reformed. A housing sector that's been booming but seems primed for a bust. And despite a recent election that seemed to make it clear who was in charge, gridlock and short-term thinking appear to be hobbling the country's political elite. 

I'm talking, of course, about ... China. Well, not me so much as Fitch Ratings, which has turned just a bit bearish on Chinese debt. Why did Fitch downgrade their debt?  

China's growth since the re-launch of market-based economic reform in 1992 has been globally as well as domestically transformative. However, the investment-led growth model faces tightening constraints as the share of investment in GDP approaches the level of domestic savings. The process of rebalancing the economy towards consumption could lead to the economy's performance becoming more volatile.

Some underlying structural weaknesses weigh on China's ratings. Average income at USD 5,988 in 2012 and the overall level of development remain well below 'A' medians despite China's phenomenal growth. Standards of governance lag 'A' range norms according to the World Bank's assessment framework....

Risks over China's financial stability have grown. Credit has grown significantly faster than GDP since 2009. China experienced the second-fastest expansion of credit in real terms, behind only Qatar, between end-2009 and end-June 2012. The stock of bank credit to the private sector was worth 135.7% of GDP at end-2012, the third-highest of any Fitch-rated emerging market.

Fitch believes total credit in the economy including various forms of "shadow banking" activity may have reached 198% of GDP at end-2012, up from 125% at end-2008. Only 55% of new social financing took the form of bank lending in the 12 months to February 2013, down from 76% in 2009. The proliferation of other forms of credit beyond bank lending is a source of growing risk from a financial stability perspective....

The ratings assume there is no significant deterioration of geopolitical risk, for example a conflict between China and Japan or an outbreak of war on the Korean peninsula.

Well, to be fair, despite daily headlines to the contrary, the chance of war breaking out on the Korean peninsula still seems pretty remote. Still, the Financial Times puts this downgrade in context: 

China has faced concerns over debt levels since 2009 when state-owned banks unleashed a surge of loans to power the economy through the global financial crisis. The credit wave succeeded in keeping Chinese growth on track, but it led to bubbly housing prices and also saddled local governments with mountains of loans that they are still struggling to repay.

Beijing has spent the past three years trying to manage these problems. It has waged a long campaign to rein in the real estate sector, raising mortgage downpayments and barring people from buying second homes in the hottest markets. Partly as a result, China recorded its lowest annual growth rate for a decade last year.

Reuters tells a similar tale on China's shadow banking system.   

China's banks are feeding unwanted assets into the country's "shadow banking system" on an unprecedented scale, reinforcing suspicions that bank balance sheets reflect only a fraction of the actual credit risk lurking in the financial system....

But the key question is no longer how much risk banks are carrying. Rather, it's how many risky loans have been shifted to the lightly regulated shadow banking institutions - mainly trust companies, brokerages and insurance companies.

The risk to the overall financial system is not clear, because of insufficient data about the quality of credit in the shadow banking sector.

To be fair to Chinese authorities, they're quite aware of what they're going through. Indeed, the entire China 2030 exercise, as well as last month's China Development Forum, is predicated on the notion that China's growth model needs to change. But as Martin Wolf notes in his column, as China enters "middle income trap" territory, there are significant problems with such reforms: 

First, if expected growth falls from over 10 to, say, 6 per cent, the needed rate of investment in productive capital will collapse: under a constant incremental capital output ratio the fall would be from 50 per cent to, say, 30 per cent of GDP. If swift, such a decline would cause a depression, all on its own.

Second, a big jump in credit has gone together with reliance on real estate and other investments with falling marginal returns. Partly for this reason, the decline in growth is likely to mean a rise in bad debts, not least on the investments made on the assumption that past growth would continue. The fragility of the financial system could increase very sharply, not least in the rapidly expanding “shadow banking” sector.

Third, since there is little reason to expect a decline in the household savings rate, sustaining the envisaged rise in consumption, relative to investment, demands a matching shift in incomes towards households and away from corporations, including state enterprises. This can happen: the growing labour shortage and a move towards higher interest rates might deliver it smoothly. But, even so, there is also a clear risk that the resulting decline in profits would accelerate a collapse in investment.

I'd add only two things at this point. First, as far as I'm concerned, one of the great mysteries in comparative political economy is why it's so bloody difficult for countries like Germany, Japan, and China to change their growth models. High-saving export-oriented economies don't change their ways all that much. To be fair, neither do low-saving, high import countries like the United States. This could be a "varieties of capitalism" story, but that seems ... inadequate as an explanation. 

Second, it's worth remembering that the conventional wisdom about China's government was that annual growth below eight percent a year would spell trouble for the government. The implicit contract over the past three decades was that the Chinese Communist Party would supply the growth in return for political quiescence. The end of high growth would imply that this social contract is in trouble.

Except that China's growth has been below that rate for the last two years and running. During that time, Beijing has weathered one major political scandal, a raft of minor political scandals, and a leadership transition without a hint of regime collapse. So while China's economy does seem to merit greater attention, I'm not sure that China's political economy will trigger the kinds of instability that have been predicted for so long. 

What do you think? 

Margaret Thatcher has passed away. I could try to talk about Thatcher's place as a world historical figure, but let's face it, there's going to be an orgy of columns on that very point over the next week or so -- anything I write on the topic would be second rate at best. I could write about my own memories of living in London during the late Thatcher era, but to be honest, that's not terribly interesting -- it's a tale of fading political popularity and really strident left-wing art. 

So, instead, consider the following two ways in which Thatcher has left a legacy in international relations theory:  

1) Diversionary war. There's a large literature in international relations on the notion of using war against a foreign adversary as a way to distract domestic opposition and/or bolster domestic support for a leader (see Chiozza and Goemans for the latest iteration of this literature). It's a little-known fact, but International Studies Association rules prohibit any paper on this topic from being published without a Thatcher reference.  

I kid, but only barely. The Falklands War represents the paradigmatic case of diversionary war theory for two reasons. First, almost every analysis of the conflicts attributes the Argentine junta's growing domestic unpopularity as a key cause of their decision to launch the conflict (though, of course, it's a bit more complicated than that). Second and more importantly, absent the Falklands War, Margaret Thatcher would be remembered as a failed one-term prime minister. Victory over the Argentines in the South Atlantic enabled Thatcher to win re-election.  

In truth, it's far from clear that diversionary war is all that common a practice (if it was, we'd be drowning in conflicts since 2008). The Falklands War, however, does provide the paradigmatic case.

2) The spread of ideas. It's fitting that the New York Times ran a story over the weekend about the boomlet in history about studying the growth of capitalism. Thatcher's role in advancing the spread of free-market ideas to other policymakers was crucial. To explain why free-market capitalism became the pre-eminent idea in economic policymaking over the past few decades, you have to look at Thatcher. She preceded Reagan, becoming the first leader in the developed world to try to change her country's variety of capitalism. Even after Reagan came to power, one could persuasively argue that Thatcher mattered more. As some international political economy scholars have noted, ideas and policies spread much faster when "supporter states" embrace them vigorously rather than reluctantly. Thatcher embraced capitalism with a near-religious fervor, acting as a vanguard for the rest of Europe on this front. For more on the role that Thatcher and her advisors played, see Yergin and Stanislaw's The Commanding Heights, or Jeffry Frieden's Global Capitalism. 

OK, readers, in what other areas of international relations and comparative politics did Margaret Thatcher leave her mark? 

Your humble blogger has been knee-deep in chairing, discussing, and attending International Studies Association panels all of which seem to have the word "diffusion" in the title and SOMEONE PLEASE MAKE IT STOP!!!

Now, naturally, with the global financial crisis and its aftermath there's been a lot of talk about debts and deficits. And with the defense sequester and what-not, there's been a lot of talk about rising levels of partisanship.  And I've come to the reluctant conclusion that a lot of this talk need to stop, like, right now. 

Here's the dirty truth about most international studies scholars: They know a fair amount about the high politics of international affairs and almost next to nothing about the rest of life. Of course, the rest of life does impinge on world politics, so there's some natural overlap. The problem starts when, in talking about non-IR stuff, we start to think that we have just as much expertise in these areas. Which we don't. At all. 

Last night I tweeted a query about what areas IR scholars should be quiet about and got way too many answers to fit in a blog post. So, here are five things about which I'd really like 99 percent of international relations scholars to shut the hell up:

1) Macroeconomic policy. Should the United States cut its deficit further? Are budget cuts, tax cuts, or tax increases necessary? How can the eurozone escape its current macroeconomic malaise? Most of us have no friggin' clue what the correct answers are for the United States, and that goes double for the euro zone. So unless you're actually publishing scholarly work on global macroeconomic policy, shut up.

2) The role of money in American politics. Foreign policy scholars are far too often shocked -- shocked!! -- when they see interest group politics at work. The Citizens United decision has only amplified this lament. The reaction to this is to either bemoan the general health of the American polity or to start developing simple theories that argue that money or lobbies explain everything about politics. Now I might not be the biggest fan of the American politics subfield, but I'm pretty sure they know more about this topic than we do. So shut up and read what they have to say.

3) Partisanship in the United States. Did you know that it's getting worse? And that it's paralyzing the U.S. government? And that it's getting worse? One of the natural biases of foreign policy scholars is to think in terms of a national interest, and then act appalled when there are different partisan conceptions of that term. Basically, what applies to #2 applies to this point as well.   

4) The Internet. As near as I can determine, when asked about this technology affects international politics, most scholars answer with some variation of "networks networks networks cyber cyber cyber." Some scholars do very good work on this subject. The rest of us should shut up for a spell and read them. 

5) Diffusion. Never again. Ever.   

What else, my dear readers, would you like to see less gabbing about from international affairs scholars? 

Blogging will be light for the rest of the week, as I'll be attending the International Studies Association annual meeting in San Francisco. 

If you're also attending but new to these things and therefore unsure of what the informal norms are about such events, check out Megan MacKenzie's indispensable ISA Guide to Newbie Graduate Students. Oh, and come attend the First Ever Official ISA Blogging Reception. I'll be there too, and I'm bringing my #TFC12 finalist flask with me!! 

My other piece of advice would be to read Rob Farley's provocative new PS: Political Science and Politics essay, "Complicating the Political Scientist as Blogger." Farley is responding to a 2011 essay by John Sides at the Monkey Cage, which offers what I would label the "standard" narrative about how blogging can be a help rather than a hindrance to good political science -- hell, I wrote something similar to it in 2008. 

Farley considers this standard narrative, ponders it for a second, and then puts all his chips into the middle and raises the stakes: 

Although I appreciate the effort to “just add blogging” to the discipline of political science, I worry that in making blogging safe, Sides gives away too much of what makes it interesting, influential, and fun. Specifically, I have two major objections to Sides’ characterization of blogging in political science. First, the article heralds an effort to discipline the political science blogosphere, establishing metrics for differentiating between “good” blogs that can contribute to (or at least should not be held against) a political science career, and “bad” blogs that do no one any good. In short, Sides’s article served both prescriptive and proscriptive purposes. Second, by emphasizing the “safe” elements of blogging, Sides has left winnings on the table; blogging could play a larger role in political science than he suggests.

Read the whole thing. I have, and I'm still sorting out how I think about it. On the one hand, I think Farley makes a really good point. There are ways in which the "standard" narrative leaves some things out. Let a thousand IR blogs bloom!

On the other hand ... well, I'm leery of advising junior faculty and grad students to throw caution into the wind and blog outside the box, as it were. Blogs are becoming more mainstream in international relations scholarship and political science, but I wouldn't describe them as truly mainstream just yet. So I have some residual caution. 

There's something else, however. If blogs are going to occupy a more central role in the field of political science, then they're inevitably going to be measured, assessed, evaluated, and quantified in any kind of professional assessment. That's what happens when people are hired or promoted in the academy. But for blogging, this is problematic, because the distribution of traffic and linkage in blogs is highly asymmetric. I worry that any kind of assessment will skew against the majority of blogs. More generally, I'm kinda dubious about the metrics we do have to measure blogs. This doesn't mean we shouldn't do it -- but I think we need to be aware of the risks going forward, and I think I'm less sanguine about them than Farley.   

Clearly, technology is changing the way we in IR scholarship do business. We're going to need to figure out what that means in the years ahead. 

Developing...

Zaki Laïdi has a fascinating op-ed in the Financial Times blasting the current state of global governance. It's fascinating because of the mix of not-entirely-accurate observation and breathtakingly naïve prescription. The good parts version:

In principle, the emergence of a multipolar world, in which the US is no longer the only very powerful country, should boost “multilateralism” – institutionalised co-operation among states in pursuit of shared objectives. It should boost efforts to achieve free trade via the World Trade Organisation, poverty reduction through the World Bank, and international security through the UN.

Yet the reality is different. Countries are seeking to extricate themselves from global agreements in order to extract concessions from partners on a bilateral basis or to protect national sovereignty.

Take the case of the WTO. A conflict between India and the US over agricultural subsidies derailed a final compromise in the summer of 2008. This would have – finally – concluded the Doha round of trade talks, which were launched in Qatar in 2001. Negotiations have stalled since the US-India spat. The main responsibility for this failure falls on the US, which believes the system of multilateral trade no longer offers the advantages it used to. The priority for the US is to secure access to markets through enhanced bilateralism. Hence the Obama administration’s drive to agree the trans-Pacific Partnership for Asia and, more recently, to conclude the Transatlantic Trade and Investment Partnership for Europe.

In each case, the strategic objective is to contain China’s rise by setting a high bar for regulatory standards. The novelty is that Europe, which has long defended multilateralism, is now succumbing to the temptation of bilateralism even while it remains completely incapable of assuming political responsibility for its trade policy...

It is important to understand that the collapse of multilateral trade we are witnessing today is far from being an isolated case. Climate talks since the 2009 Copenhagen conference have challenged the multilateralism heralded by the Kyoto protocol of 1997. The idea then was to move forward on the basis of a shared objective – the reduction of greenhouse gas emissions. Today countries only make commitments on climate change on the basis of a very narrow assessment of their national interests. The idea that shared commitments – rather than individual interests – shape behaviour is now dead....

Since the end of the cold war, Europeans have believed deeply in the existence of a global commons – and the declining importance of national sovereignty. The conduct of both the US and emerging countries suggests the opposite. Power politics is back. Multilateralism is dying.

OK, a few things here: 

1) It was a lot easier to take this "Europeans don't really believe in national interests anymore, we're so above all that, so the rest of the world should listen to us" guff prior to the Eurozone crisis. Watching Germany and other Northern European nations make sure that their national interest gets executed through EU institutions, however, makes this canard a bit harder to swallow. 

2) I hate to break it to Laïdi, but during the 1990s the Europeans could afford the luxury of believing in the growing power of multilateralism. That suited their beliefs and seemed to accord with the facts on a surface level. In point of fact, however, it was the growing power of the United States -- along with the strong support and coordination of its European allies -- that made multilateralism work. The idea that multilateralism should work better when power is more dispersed is an ... odd notion. 

3) If Laïdi is really gonna go there on trade, let's ask  blunt question -- exactly which jurisdiction triggered the explosion in bilateral free-trade agreements and preferential trade agreements?  Hold on, I'll wait ... but I bet everyone already knows the answer. 

4) As I've argued at length elsewhere, focusing on Doha and Copenhagen will lead to Laïdi's conclusions -- but those cases are not necessarily representative of global governance writ large. On a raft of other dimensions, the multilateral system has worked surprisingly well.

5) Finally, the real problem with  Laïdi's argument is that it fosters a spectacularly naïve narrative about how multilateral arrangements are created in the first place. This is hardly the first moment when great powers have created club-like arrangements in an effort to move the multilateral status quo. In fact, I'm pretty sure that some big books have been devoted to this topic.   

The reason the European Union has had success in pushing its version of global rules has little to do with its love of multilateralism and a lot to do with its market power and institutional capabilities. The sooner that European international relations commentators appreciate this, the better.

Am I missing anything? 

So the big push for World War Z is clearly afoot.  The second trailer for the film was released a week ago: 

So this trailer isn't all that different from the first trailer, which means my qualms about the film version of Max Brooks' masterpiece remain.  Still, that airplane sequence at the end was well executed, and offers some promise. 

But then we get to the Entertainment Weekly cover story -- out today -- about the long, laborious process of getting World War Z from page to screen.  It's a good article that details the myriad screenwriters involved, the location difficulties, and the reshoots.  One definitely gets the sense of how Brad Pitt warmed to the subject matter over time.  Hell, in the EW article he referenced All The President's Men as his template for the story -- which, if you've read World War Z, you know isn't the craziest comparison. 

Which is great, until we get to this long quote from Pitt at the end of the story explaining how the final version of the movie has changed from his original conception: 

At the time, I was really interested in a more political film, using the zombie trope as a kind of Trojan horse for asking, 'What would happen to sociopolitical lines if there was a pandemic like this? Who would be on top? Who would be the powerful countries and who would be the most vulnerable?

We wanted to really explore that, but it was just too much. We got bogged down in it; it was too much to explain. It gutted the fun of what these films are meant to be.

Excuse me, I need to go do this for a while:

Here's the thing -- the very reason that World War Z the book is better than every other zombie novel ever written is the global scope and the reasonably realistic take on the politics of a zombie apocalypse.  There is action galore in the book, but there's something more as well.  The politics that "bogged down" the movie?  That is the fun!  

Will I go see World War Z?  Probably out of sheer professional obligation.  But let's be clear -- based on the evidence to date, the odds seem very likely that the movie version of World War Z will be a garden-variety big-budget disaster flick.  It's not gonna be great. 

While Pitt plans a trilogy of films, methinks this World War Z would have worked even better as a miniseries  for HBO or FX.  Too bad.  Should some shameless huckster desire to procure the film version of Theories of International Politics and Zombies -- which is all about the politics -- then they should contact Princeton University Press. 

Am I missing anything? 

By now, readers have a pretty good idea of the thesis of my latest book topic: Contra the arguments of many, the system of global economic governance worked pretty well during the 2008 financial crisis, and it's continued to work "well enough" since 2008. 

Furthermore, American leadership is at least partly rsponsible for the system working. Despite bouts of partisan gridlock, the United States government still enacted a plethora of emergency rescue packages (via the 2008 Troubled Assets Relief Program), expansionary fiscal policies (via the 2009 American Recovery and Reinvestment Act, the payroll tax cut, and the extension of the Bush tax cuts), stress tests of large financial institutions, expansionary monetary policy (via interest rate cuts, three rounds of quantitative easing and Operation Twist), and financial regulatory reform (via Dodd-Frank). 

Another area where the U.S. has led the way is reforming IMF governance. Since 2006, the IMF has engaged in two rounds of quota reform so the distribution of power within the institution better reflects the actual distribution of power. A third round is planned for completion in 2014. As Ted Truman explains in this Peterson Institute of International Economics policy brief, U.S. leadership played a crucial role in these negotiations. 

So far, so good for my hypothesis. There's just one problem -- Congress has yet to ratify the last round of quota revisions. Since the reforms can't be enacted without U.S. approvial, this is a thing. According to Truman:

The United States bears substantial responsibility for the current situation. After 15 years in which US administrations of both political parties have pushed aggressively and imaginatively for governance changes in the IMF culminating with the central
US role in shaping the 2010 Seoul package, the United States has failed to implement that package. The rest of the world has been remarkably tolerant of the US delay in acting on the 2010 Seoul IMF reform package, but that patience is running out. US leadership and influence in the IMF is weakening, and thereby the influence of the institution itself. This is the principal reason why it is urgent to enact the pending IMF legislation.

From a US and global perspective there is only downside and no upside in further delay. Doing so would support the IMF as the central institution promoting global economic growth and financial stability, involve no true financial cost to the US taxpayer, and reinforce US leadership and influence in this crucial institution, positioning the United States to continue to lead in negotiating further IMF governance reforms.

Don't take Truman's word on this alone, however. As the Financial Times' Robin Harding reports, a lot of experts are starting to get antsy about the lack of congressional action: 

Almost 100 policy makers and academics have written to the US Congress urging the ratification of crucial reforms of the International Monetary Fund that international leaders agreed more than two years ago.

The signatories argue in an open letter, sent to House of Representatives and Senate leaders on Monday and seen by the Financial Times, that if the US does not sign up it will undermine its authority in negotiations at the G20 and other institutions that govern the world economy.

“Failure to act would diminish the role of the United States in international economic policy making and undermine US efforts to promote growth and financial stability,” the letter says.

Signatories include holders of the top international economic job at the US Treasury under Republican and Democratic administrations. They include Tim Adams, who worked for former president George W. Bush, and Jeffrey Shafer, who was part of the Clinton administration.

I'd say that it's a cruel irony that the United States is the brake on reforms spearheaded by ... the United States, except that by now, savvy readers know that this sort of thing is disturbingly common. 

Does it matter? Well, as much as I love to pooh-pooh the BRICS, they do share one genuine area of consensus -- they want more influence over global governance structures. If they don't get it, there will come a time when they will be both willing and able to set up institutions on their own -- like this one. Which would be a shame for two reasons. First, as a general rule of global economic governance, it's better to have great powers on the inside pissing out rather than the reverse. Second, the IMF has had some good mojo as of late, demonstrating renewed independence from Eurocrats and proposing some nifty policy ideas. 

If Congress stalls this quota reform measure that the executive branches from both parties have negotiated , they will be weakening a U.S.-friendly international institution and inviting potential rivals to set up or bolster alternatives. Which, if you think about, is a really stupid way to run U.S. foreign economic policy. 

More importantly to me, however, it would really f**k up one of my book's hypotheses. Congressional gridlock hasn't sabotaged too much in the way of American global leadership for the past give years. Blocking quota reform would be a pretty big deal, though. It would force me to revise a book chapter, and I really don't want to do that. 

So, in the name of political science, I humbly beseech Congress to pass the damn quota reform bill. 

[Uh, you really think that an appeal to political sciece is gonna work with this crew?!--ed.]  Uh ... in the name of preventing China and its allies from creating a New Anti-American World Order and threatening a global governance gap, I humbly beseech Congress to pass the damn quota reform bill.  [Much better!!--ed.]