My recent post on the overstatement of American decline has probably been my most popular single non-zombie item since moving the blog to Foreign Policy.  It has also attracted some useful observations on Michael Beckley's International Security essay in particular -- see Phil Arena and Erik Voeten for some trenchant criticisms. 

My FP co-blogger Steve Walt has also weighed in, however, arguing that obsessing about the Sino-American comparison misses some larger points about the decline of American influence: 

The United States remains very powerful -- especially when compared with some putative opponents like Iran -- but its capacity to lead security and economic orders in every corner of the world has been diminished by failures in Iraq (and eventually, Afghanistan), by the burden of debt accumulated over the past decade, by the economic melt-down in 2007-2008, and by the emergence of somewhat stronger and independent actors in Brazil, Turkey, India, and elsewhere. One might also point to eroding national infrastructure and an educational system that impresses hardly anyone. Moreover, five decades of misguided policies have badly tarnished America's image in many parts of the world, and especially in the Middle East and Central Asia. The erosion of authoritarian rule in the Arab world will force new governments to pay more attention to popular sentiment -- which is generally hostile to the broad thrust of U.S. policy in the region -- and the United States will be less able to rely on close relations with tame monarchs or military dictators henceforth. If it the United States remains far and away the world's strongest state, its ability to get its way in world affairs is declining.

All this may seem like a hair-splitting, but there's an important issue at stake. Posing the question in the usual way ("Is the U.S. Still #1?", "Who's bigger?", "Is China Catching Up?" etc.,) focuses attention primarily on bilateral comparisons and distracts us from thinking about the broader environment in which both the United States and China will have to operate. The danger, of course, is that repeated assurances that America is still on top will encourage foreign policy mandarins to believe that they can continue to make the same blunders they have in the recent past, and discourage them from making the strategic choices that will preserve U.S. primacy, enhance U.S. influence, and incidentally, produce a healthier society here at home.

I disagree with Steve on multiple points here, so let's be thorough and go through them one at at time. 

First, I'd argue that developing accurate assessments about the power balance between China and the United States is actually super-important.  Miserceptions about a rising China or a declining United States can lead to a) toxic political rhetoric in Washington, which leads to b) rhetorical blowback, which leads to c) stupid foreign policy miscalculations.  As I wrote about a year ago: 

Exaggerating Chinese power has consequences. Inside the Beltway, attitudes about American hegemony have shifted from complacency to panic. Fearful politicians representing scared voters have an incentive to scapegoat or lash out against a rising power -- to the detriment of all. Hysteria about Chinese power also provokes confusion and anger in China as Beijing is being asked to accept a burden it is not yet prepared to shoulder. China, after all, ranks 89th in the 2010 U.N. Human Development Index just behind Turkmenistan and the Dominican Republic (the United States is fourth). Treating Beijing as more powerful than it is feeds Chinese bravado and insecurity at the same time. That is almost as dangerous a political cocktail as fear and panic.

The discussion of China in the GOP presidential campaign, as well as Obama's mercantilist State of the Union address, strongly suggest that political assessments and political rhetoric about Chinese power need a strong jolt of sobriety.  Walt is concerned that an overestimation of American power will lead to stupid foreign policy decisions, but I'd wager that an overestimation of Chinese power would lead to equally stupid foreign policy decisions. 

As for Walt's assertions about the decline of American influence... well, I must take issue with several of them.  First, the notion that the United States was able to exercise power more easily during the Cold War seems a bit off.  As Robert Kagan points out in The New Republic:

And of course it is true that the United States is not able to get what it wants much of the time. But then it never could. Much of today’s impressions about declining American influence are based on a nostalgic fallacy: that there was once a time when the United States could shape the whole world to suit its desires, and could get other nations to do what it wanted them to do, and, as the political scientist Stephen M. Walt put it, “manage the politics, economics and security arrangements for nearly the entire globe.”

If we are to gauge America’s relative position today, it is important to recognize that this image of the past is an illusion. There never was such a time. We tend to think back on the early years of the Cold War as a moment of complete American global dominance. They were nothing of the sort. The United States did accomplish extraordinary things in that era: the Marshall Plan, the NATO alliance, the United Nations, and the Bretton Woods economic system all shaped the world we know today. Yet for every great achievement in the early Cold War, there was at least one equally monumental setback.

During the Truman years, there was the triumph of the Communist Revolution in China in 1949, which American officials regarded as a disaster for American interests in the region and which did indeed prove costly; if nothing else, it was a major factor in spurring North Korea to attack the South in 1950. But as Dean Acheson concluded, “the ominous result of the civil war in China” had proved “beyond the control of the ... United States,” the product of “forces which this country tried to influence but could not.” A year later came the unanticipated and unprepared-for North Korean attack on South Korea, and America’s intervention, which, after more than 35,000 American dead and almost 100,000 wounded, left the situation almost exactly as it had been before the war. In 1949, there came perhaps the worst news of all: the Soviet acquisition of the atomic bomb and the end of the nuclear monopoly on which American military strategy and defense budgeting had been predicated.

Kagan's essay is getting some attention in high places, so I'll be very curious to hear Walt's take on it. 

It Walt overestimates America's influence during the Cold War, he also underestimates American influence now.  The funny thing about the "stronger and independent actors in Brazil, Turkey, India, and elsewhere" is that they're siding with the United States on multiple important issues.  Coordination between Turkey and the United States on the Arab Spring has increased over time, and their policy positions on Iran are converging more than diverging.  Brazil has turned a cold shoulder to Iran and has been warier about China's currency manipulation and rising influence in Latin America.  India seems perfectly comfortable to be a partner in America's Pacific Rim pivot, as are Australia, Japan and South Korea. 

This is perfectly consistent with Walt's own balance-of-threat theory, by the way.  The actors that seem to be generating the most anxiety among the rising developing countries are the ones that seem to be exhibiting the most aggressive regional intentions -- namely, China and Iran.  Indeed, even countries with strong historical resentments against the United States are now trying to find creative ways to bind themselves to Washington.  Will these countries always march in lockstep with the United States?  Of course not -- but as Walt would surely acknowledge, America's NATO allies were not always on the same page with the United States on myriad Cold War issues. 

It seems that Walt's primary concern is that without better domestic policies, the United States might fritter away its great power advantages.  I'm sympathetic to that argument -- I'd also take the bold position that I'd like to see improvements in American education and infrastructure as well.  One of the points I was making in my original post, however was that even absent grand initiatives from Washington, the United States economy was finding ways to heal itself.  Indeed, compared to either Europe or China, one could argue that the United States has adjusted to the post-2008 environment the best.  This is not so much praise for Washington as an indictment of rigidities in Brussels and Beijing.  Still, power and influence are relative measures, and I see little evidence to support Walt's pessimism. 

Am I missing anything? 

Let's consider and contrast American foreign policy towards Russia and China over the past few years.

With Russia, the Obama administration announced a much-ballyhooed "reset" with the goal of improving bilateral relations.  In an effort to advance that goal, the administration reworked missile defense system plans in eastern Europe, creating political headaches for governments in the region to make Moscow happy.  The administration took great pains to endorse a Russian proposal on Iran's nuclear program.  The administration signed a fresh new arms control treaty and then expended a decent amount of political capital to get NewSTART ratified.  Washington conducted some serious behind-the-scenes diplomacy to get Russia into into the WTO.  Most recently, the administration appointed a chief architect of the "reset" policy as ambassador to Russia.   

With China, the Obama administration (after some idle G-2 talk) has been far more aggressive.  The administration has "pivoted" it's foreign policy resources toward the Pacific Rim, with the not-so-subtle signal that China is the focus of this pivot.  Washington has poked its nose into the South China Sea dispute, and recently announced a decision to station troops in Australia.  It pushed forward a framework trade agreement that pointedly does not include China, while simultaneously calling on that country to let its currency appreciate.  The State Department has reached out to one of China's longstanding allies in an effort to coax the nascent democratization in that country into something more long-lasting.  This is simply part of a larger theme in which Washington is seemingly bear-hugging any significant country that is concerned about Beijing.  The U.S. ambassador to China, when not becoming an online sensation among ordinary Chinese, is busy criticizing Beijing's human rights record. 

So, to sum up:  the Obama administration has made it something of a priority to improve relations with Russia, while at the same time investing serious amounts of diplomatic capital into various frameworks and initiatives that hedge against a rising China. 

Now compare and contrast how Moscow and Beijing are thinking about Washington this week.  In Beijing: 

China and the United States should cooperate more closely to defuse international crises and ensure friction does not overwhelm shared interests, China's likely next president, Xi Jinping, said on Monday, setting an upbeat tone for his impending visit to Washington.

"No matter what changes affect the international situation, our commitment to developing the Sino-U.S. cooperative partnership should never waver in the face of passing developments," Vice President Xi told a meeting in Beijing.

"In dealing with major and sensitive issues that concern each side's core interests, we must certainly abide by a spirit of mutual respect and handle them prudently, and by no means can we let relations again suffer major interference and ructions."

Xi's mood-setting speech did not unveil new policies or give the precise date for his U.S. visit. But he stressed Beijing's desire for steady relations for his visit and his accession to running the world's second biggest economy after America's.

And now Moscow:

Russia's foreign minister, Sergey V. Lavrov, warned Wednesday that outside encouragement of antigovernment uprisings in the Middle East and North Africa could lead to “a very big war that will cause suffering not only to countries in the region, but also to states far beyond its boundaries.”

Mr. Lavrov’s annual news conference was largely devoted to a critique of Western policies in Iran and Syria, which he said could lead to a spiral of violence.

His remarks came on the heels of a report on state-controlled television that accused the American ambassador to Russia, Michael McFaul, who has been in Moscow for less than a week, of working to provoke a revolution here. Prime Minister Vladimir V. Putin, at an impromptu meeting with prominent editors, also unleashed an attack on the liberal radio station Ekho Moskvy, which he said was serving American interests.

Now, it's possible to find other news stories that suggest China might not be handling all aspects of the bilateral relationship with equal aplomb, and its possible that these Russian statements contain more bluster than bite.  Still, stepping back, the larger narrative does seem to be that Russia has adopted an angrier and more belligerent posture toward American foreign policy in recent months, while China has responded with more aplomb. 

Why?  I don't know if there's an easy and accurate explanation.  Some neoconservatives might proffer that authoritarians only respond positively to strength, and therefore Russia feels more emboldened than China.  I seriously doubt that this is about bandwagoning.  Similarly, it could be argued that Russia is more domestically insecure than China, what with the recent protests and all.  Again, I seriously doubt this, as it's not like China hasn't experienced some domestic hiccups as well this year.

There are two more compelling explanations, but I honestly don't know if they work either.  The first is that Russia and China have different diplomatic styles.  Russian diplomats are far more comfortable with being blunt in their assessments of American intentions and actions, whereas Chinese diplomats are more comfortable laying low and not making as much of a public fuss.  Furthermore, China has moved down the learning curve, recognizing that its 2009-10 policy of "pissing off as many countries as possible" didn't turn out so well.  It's possible that the substance of both countries' approaches toward the United States are not that different -- they just go about it in ways that play very differently in the media. 

The second, more realpolitik explanation is that China and Russia are looking into the future, and Beijing is far more sanguine than Moscow.  Russia is suffering from institutional dysfunction and demographic decay.  It's only great power assets are bountiful natural resources, a huge land mass, and nuclear weapons.  China will encounter difficulties in the future, but does not have nearly the same kind of structural stresses as Russia.  Beijing is therefore simply less anxious than Moscow about U.S. policy, because it has more hard and soft power resources. 

To be honest, I'm not thrilled with either of these explanations. So, dear readers, I put it to you: why is Russia acting more bellicose toward an accommodating policy from the United States, whereas China is reacting calmly toward a more aggressive United States? 

Developing ...

Hey, remember my last bloggingheads, when I went to the 1930s analogy to describe the current problems in the global political economy?  Well, that was a few days ago, and my, how things have changed -- to make that 1930's analogy even more powerful.  The eurogoggles metahor may be coming to an end -- because the situation is so dire that even the cheeriest summit won't alter perceptions in financial markets. 

After a week of gyrating europolitics on the Greek bailout and meaningless G-20 summitry, markets and media will be focused on Italy this week.  This matters -- for both Europe and the world, Greece is a diverting sideshow compared to a major financial collaspse in Italy.  The pressure on Italian PM Sylvio Berlusconi to resign have gotten so loud that he had to take to his Facebook page to say, "The rumors of my resignation are groundless."   New rule of thumb:  any time a politician follows Sarah Palin's lead, there's going to be a problem. 

The Daily Telegraph's Ambrose Evans-Pritchard explains the eurofarce that is currently playing out: 

As of late Friday, the yield spread on Italian 10-year bonds over German Bunds was a post-EMU record of 458 basis points. This is dangerously close to the point where cascade-selling begins and matters spiral out of control.

The European Central Bank has so far bought time by holding a series of retreating lines but either it has reached its intervention limits after accumulating nearly €80bn of Italian debt, or it is holding fire to force Silvio Berlusconi to resign – if so, a foolish game.

The ECB’s hands are tied. A German veto and EU treaty constraints stop it intervening with overwhelming force as a genuine lender of last resort. The bank is itself at risk of massive over-extension without an EU treasury and single sovereign entity to back it up.

This lack of a back-stop guarantor is an unforgivable failing in the institutional structure of monetary union....

The spreads on EFSF 5-year bonds have already tripled to 151 above German debt, leaving Japan and other early buyers nursing a big loss. The fund suffered a failed auction last week, cutting the issue from €5bn to €3bn on lack of demand.

Gary Jenkins from Evolution Securities said the “frightening” development is that the EFSF is itself being shut out of the capital markets. “If it continues to perform like that then the bailout fund might need a bail out,” he said.

Europe’s attempt to widen the creditor net by drawing in the world’s reserve states evoked near universal scorn in Cannes and a damning put-down by Brazil’s Dilma Rousseff. “I have not the slightest intention of contributing directly to the EFSF; if they are not willing to do it, why should I?”

Europe is resorting to such antics because its richer states – above all Germany -- still refuse to face up to the shattering implications of a currency that they themselves created, and ran destructively by flooding the vulnerable half of monetary union with cheap capital.

Simon Johnson is, er.... less than optimistic about these developments: 

MIT Sloan School of Management professor Simon Johnson didn’t equivocate on the perils of the current global economic environment. “We have built a dangerous financial system in the United States and Europe,” said the former chief economist at the International Monetary Fund. “We must step back and reform the system.”

Professor Johnson cited alarming parallels with October 1931, when “people thought the worst was behind them, but the smart people were wrong and instead the crisis just broadened.”  (emphasis added) 

I've said it before and I'll say it again:  any time the global economy is counting on Sylvio Berlusconi to do the right thing is not a good time. 

Developing.... 

As I noted previously, compared to his GOP rivals, Mitt Romney has some actual foreign policy thinking going on.  On the other hand, as Dan Trombly points out, doing better than Herman Cain or Rick Perry is a really low bar.  So, looked at objectively, what's my assessment of Romney's foreign policy white paper? 

I could go through it line by line, but James Joyner already did that for The Atlantic.  As it turns out, I'm reaching a course called The Art and Science of Statecraft that will require students to write a grand strategy document.  Sooo.... if Mitt Romney was one of my students, how would I grade him?  See below:

********************************************************************************** 

Mitt,

You and your study team have clearly put a lot of work into "An American Century."  It's cogently written and organized.  Your basic statement of purpose -- "advance an international system that is congenial to the institutions of open markets, representative government, and respect for human rights (p. 7)" -- fits perfectly within the mainstream of American foreign policy thinking. You've done an excellent job of demonstrating an awareness of the complexity of threats that face the United States in the 21st century.  I liked it on p. 6 when you noted that:

In the highly dynamic realm of national security and foreign policy there are seldom easy answers. Discrete circumstances in disparate regions of the world demand different kinds of approaches. There is no silver bullet for the problem of securing the United States and protecting our interests around the world.

You've also demonstrated an appropriate awareness that American power rests on more than a strong military.  When you note that a Romney administration would "apply the full spectrum of hard and soft power to influence events before they erupt into conflict (p. 8)," I caught myself nodding along.  

Some of the details are intriguing as well.  I need to look more into these "Reagan economic zones" that you mention a lot, but applying them to Latin America and the Pacific Rim make a great deal of strategic and economic sense.  I'm not fully persuaded that your notion of creating regional envoys to organize all "soft power resources" is all that different from the foreign policy czars or special envoys of administrations past, but this kind of argument fits well with your management background. 

That said, there are some logical flaws and major gaps in this draft that will have to be corrected if you want to earn a better grade.  The first problem is the style.  I recognize that you've written this as a campaign document, so you're never going to completely eliminate the unadulterated horsheshit allegations about the current president going on an apology tour.  Maybe you could do it a bit more subtly in the future, however? 

Secondly, there's a lack of historical awareness in some parts of the document.  For example, on page 7 the paper says:

[A] Romney foreign policy will proceed with clarity and resolve. The United States will  clearly enunciate its interests and values. Our friends and allies will not have doubts about where we  stand and what we will do to safeguard our interests and theirs; neither will our rivals, competitors, and adversaries.

Now, reading this, I kept thinking back to the Bush administration and its repeated assetions that that there would be no hypocrisy in foreign affairs.  Much like Bush, reality turned out to be trickier.  I suspect you know this, from the other excerpts noted earlier.  So get rid of this fluff:  I'm sure statements like this play well in a management consulting boardroom, but it's not going to cut it in the real world. 

Similarly, for someone who says that, the Obama administration is "undermining one’s allies (p. 3)" in contrast to you, who will "reassure our allies (p. 13)", you don't actually talk about America's treaty allies much at all.  True, you do talk about expanding America's alliance system to include India and Indonesia.  Mexico gets some face time.  Israel gets a lot of face time.  On the other hand, NATO is not mentioned once in this entire document.  Neither is the European Union.  Japan and South Korea get perfunctory treamtment at best.  Turkey is a major treaty ally but you treat it like a pariah state.  For someone who's claiming that the U.S. will reassure its major allies, you didn't seem to give them much attention at all.  This is a really important problem, because Japan and Europe have been crucial allies in a lot of major American initiatives -- and they're getting weaker.  Even in discussing new possible allies, I'm kind of gobsmacked that Brazil is never mentioned. 

Another big problem is that your approach to China is so shot full of contradictions that I don't know where to begin.  Do you seriously believe what you wrote on p. 3: 

The easiest way... to become embroiled in a clash with China over Taiwan, or because of China’s ambitions in the South or East China Seas, will be to leave Beijing in doubt about the depth of our commitment to longstanding allies in the region.

Really?  See, I'd say the easiest way to get embroiled in a clash with China is to write Taiwan a blank check on their defense needs.  The second easiest would be to publicly bluster on about Taiwan to a Chinese leadership that feels increasingly insecure and will be tempted to stoke the fires of Chinese nationalism by creating another Quemoy and Matsu crisis. 

Furthermore, you talk explicitly about supplying Taiwan with "adequate aircraft and other military platforms (p. 18)" in supposed contrast to the Obama administration.  You also talk about strengthening relationships with other countries that neighbor China in an effort to preserve American dominance.  Now, this might be a bit provocative, but I get the rationale.  Here's the thing, though -- you can't simultaneously do this and assert that you will "work to persuade China to commit to North Korea’s disarmament (p. 29)."  Really?  How exactly are you gonna persuade them on this point?   Do you really think that arming Taiwan to the teeth and blasting its human rights record will do the trick? 

If the section on China is contradictory, then your discussion of Pakistan is worse.  You state on p. 31-32:

It is in the interests of all three nations to see that Afghanistan and the Afghanistan/ Pakistan border region are rid of the Taliban and other insurgent groups.... Pakistan should understand that any connection between insurgent forces and Pakistan’s security and intelligence forces must be severed. The United States enjoys significant leverage over both of these nations. We should not be shy about using it. 

There are at least two assertions in the quoted section that are highly dubious -- I'll let you find them on your own.   

One final point, should you choose to revise this draft strategy -- you need to prioritize the threats you discuss in the paper.  You list a whole bunch of them -- rising authoritarian states, transnational violence, failing states, and rogue states.  If you have to prioritize, which threats merit greater attention?  This should actually be pretty easy, since you absurdly overhype the threats posed by some of these countries (Venezuela, Cuba and Russia in particular). 

I look forward to reviewing your later work. 

Grade:  B

Your humble blogger will be hitting the road early in the morrow to Shanghai. I'll be attending a conference co-sponsored by the Shanghai Institutes for International Studies, Stanley Foundation and the Munk School of Global Affairs University of Toronto on "Global and Collaborative Asian & Pacific Leadership for the G20."

Note to citizens of the PRC:  I too will be toting my own luggage.

I'll certainly try to avoid catching Friedman's Disease during this China trip.*  I'll also try to avoid a related management consulting syndrome, which is the belief that a few days in another country somehow endows me with "street cred" when discussing said country. This seems particularly prevalent with respect to China.

Since the topic is the state of the G-20, and I've made my feelings about that forum pretty plain on this blog, I hereby challenge readers to persuade my mind in the 48 hours before I present. The G-20 performed best when the sense of crisis seemed most acute. As the eurozone melts down, and the United States doesn't look much better, is the G-20 capable of jumpstarting a bout of policy coordination that looks more robust than, say, this totally anemic statement?

What do you think?

*If Gwyneth Paltrow is coughing anywhere near me, on the other hand, I'm... I'm.... probably going to be the Index Patient Plus One. 

When I woke up this morning and scanned the headlines, I knew what I was going to blog about -- the stories in the press about how the European Union was, after much hemming and hawing, beginning to move towards a closer fiscal union.  I was then going to not-so-humblebrag about my own prediction that this would indeed happen. This was all going to be a great set-up to the last-minute reverse course -- i.e., this Financial Times op-ed by German Finance Minister Wolfgang Schäuble in which he declared his "unease when some politicians and economists call on the eurozone to take a sudden leap into fiscal union and joint liability." 

Here's the thing, however -- if you read my eurozone blog post from this past February, you'll see that almost the exact same dynamic played itself out six months ago.  This time the Germans are pre-emptively balking before the peripheral countries can balk in response to German calls for austerity... but you get the general idea. 

So... in the interest of avoiding IPE déjà vu for readers, I hereby promise not to blog about this again until something actually happens beyond news reports of preliminary steps-towards-fiscal-centralization-followed-by-political-pushback.  I will simply observe that Ryan Avent's basic question will be the one to ask going forward: 

Europe's leaders know what they'll have to do to stabilise the situation. The key question now is: what is the set of euro-zone countries consistent with the political will to save the currency area? Europeans in Europe's core will share a currency with "outsider" countries, but they won't fight to save them. So who are the outsiders? Who has to go to convince core voters that the cost of saving the euro zone is worth bearing?....

With which countries do core voters sufficiently identify themselves as to make a large, ongoing commitment acceptable? Answer that, and you probably have a good idea how this mess will end.

Readers are requested to state which countries get the Euroboot in the comments below. 

[WARNING:  THE FOLLOWING IS AN OPTIMISTIC GLOBAL POLITICAL ECONOMY POST]

Note:  in my last blog post, I might have sounded juuuuust a wee bit pessimistic about the state of the global political economy.  That was my intent, but it wasn't necessarily how I actually felt.  My aim was to assemble as negative a brief as possible about the state of the global political economy.  The aim of this post is to argue that, despite all the recent bad news, the fundamentals of the global political economy are surprisingly sound.  I'm not actually as optimistic as the rest of this post suggests, either -- but I do lean more in this direction.  The fact that I'm blogging this from a zombie-proof vacation redoubt should in no way affect your evaluation of the following few paragraphs.  

So, when we last left off this debate, things were looking grim.  My concern in the last post was that the persistence of hard times would cause governments to take actions that would lead to a collapse of the open global economy, a spike in general riots and disturbances, and eerie echoes of the Great Depression.  Let's assume that the global economy persists in sputtering for a while, because that's what happens after major financial shocks.    Why won't these other bad things happen?  Why isn't it 1931? 

Let's start with the obvious -- it's not gonna be 1931 because there's some passing familiarity with how 1931 played out.  The Chairman of the Federal Reserve has devoted much of his academic career to studying the Great Depression.  I'm gonna go out on a limb therefore and assert that if the world plunges into a another severe downturn, it's not gonna be because central bank heads replay the same set of mistakes. 

The legacy of the Great Depression has also affected public attitudes and institutions that provide much stronger cement for the current system.  In terms of publuc attitudes, compare the results of this mid-2007 poll with this mid-2010 poll about which economic system is best.  I'll just reproduce the key charts below: 

The headline of the 2010 results is that there's eroding U.S. support for the global economy,  but a few other things stand out.  U.S. support has declined, but it's declined from a very high level.  In contrast, support for free markets has increased in other major powers, such as Germany and China.  On the whole, despite the worst global economic crisis since the Great Depression, public attitudes have not changed all that much.  While there might be populist demands to "do something," that something is not a return to autarky or anything so drastc. 

Another big difference is that multilateral economic institutions are much more robust now than they were in 1931.  On trade matters, even if the Doha round is dead, the rest of the World Trade Organization's corpus of trade-liberalizing measures are still working quite well.  Even beyond the WTO, the complaint about trade is not the deficit of free-trade agreements but the surfeit of them.  The IMF's resources have been strengthened as a result of the 2008 financial crisis.  The Basle Committee on Banking Supervision has already promulgated a plan to strengthen capital requirements for banks.  True, it's a slow, weak-assed plan, but it would be an improvement over the status quo. 

As for the G-20, I've been pretty skeptical about that group's abilities to collectively address serious macroeconomic problems.  That is setting the bar rather high, however.  One could argue that the G-20's most useful function is reassurance.  Even if there are disagreements, communication can prevent them from growing into anything worse. 

Finally, a note about the possibility of riots and other general social unrest.  The working paper cited in my previous post noted the links between austerity measures and increases in disturbances.  However, that paper contains the following important paragraph on page 19: 

[I]n countries with better institutions, the responsiveness of unrest to budget cuts is generally lower. Where constraints on the executive are minimal, the coefficient on expenditure changes is strongly negative -- more spending buys a lot of social peace. In countries with Polity-2 scores above zero, the coefficient is about half in size, and less significant. As we limit the sample to ever more democratic countries, the size of the coefficient declines. For full democracies with a complete range of civil rights, the coefficient is still negative, but no longer significant.

This is good news!!  The world has a hell of a lot more democratic governments now than it did in 1931.  What happened in London, in other words, might prove to be the exception more than the rule. 

So yes, the recent economic news might seem grim.  Unless political institutions and public attitudes buckle, however, we're unlikely to repeat the mistakes of the 1930's.  And, based on the data we've got, that's not going to happen. 

While the debtopocalypse might have been cancelled, I see that the wake for American hegemony is chugging right along.

The interwebs is drowning from variations of the argument that the process by which the debt ceiling deal was reached has dented American power. To sum them up: Sure, the United States government staved off collapse, but the galactically stupid brinkmanship over it has permanently damaged America's brand. Furthermore, the new politics of brinkmanship means that we could potentially see this kind of own-goal as a new permanent fixture of American political economy. Continued political uncertainty over something as obviously necessary as raising the debt ceiling means that actual policy problems like, say, crumbling infrastructure, education, or reassessing grand strategy is a true fool's errand. So, in other words, the USA is screwed.

See the Wall Street Journal, New York Times, David Weigel, David Rothkopf, Felix Salmon, and Joshua Keating for just a small sampling of this compelling argument.

To which I say: mmmmmmmaybe.  

I don't doubt that the U.S. brand of constitutional democracy has taken a pretty severe hit from this episode. Then again, the parliamentary system of democratic governance has long been more popular, so that's not really a new thing.

There are three factors, however, that make me wary of this kind of eulogy. First, I've come to look at concepts like "soft power" and "standing" with a bit of a jaundiced eye. Even if the U.S. takes a hit in that category, I'm not sure that loss translates anything more tangible than … a bunch of foreign-policy pundits bemoaning its loss.

Seriously, compare the last few years of the Bush administration with the first few years of the Obama administration. Any measurable metric of standing or soft power with the presidential transition. The effect on U.S. foreign policy, however, has been negligible.

Second, power is always a relative term, so the question has to be asked -- who's gaining on the United States? Joshua Keating's survey of global schadenfreude doesn't change the fact that the eurozone remains a basket case, Japan and Russia remain demographic disasters, and China has domestic political problems that make partisanship in the United States look like child's play. Even a cursory glance at military spending reveals no peer competitor to the United States. So yes, the United States will endure a rain of rhetorical horses**t for a while … right up until the next crisis in which the world demands America "do something" because it's still the only superpower still standing.

Or, to put this in bond rating language -- even if US power is downgraded from AAA, who else is even above BBB+?

Third, the thing about democracy is that it has multiple ways to constrain political stupidity and ideological overreach. The first line of defense is that politicians will have an electoral incentive to act in non-crazy ways in order to get re-elected. The second line of defense is that politicians or parties who violate the non-crazy rule fail to get re-elected. So, in some ways, the true test of the American system's ability to stave off failure will be the 2012 election. Politicians from both parties have vastly overinterpreted recent electoral victories as sweeping mandates. I suspect, in 2012, many of them will be penalized for such hubris. If they aren't, well, then the conventional wisdom might have a point.

Smart investors made a ton of money this past month by betting on the full faith and credit of the United States despite the D.C. blood sport. If one could make a similar wager on American power, I'd be inclined to bet against the current market sentiment.

Am I missing anything?

Your humble blogger is headed to China for the next few days as part of a conference sponsored by the MacArthur Asia Security Initiative and the School of International Studies at Peking University, at which we will be discussing "What roles do power, history, ideas, and other legacies and factors play in shaping the American and Chinese approaches to sovereignty?" and "What is distinctive about the American and Chinese orientations and what are the implications of their preferences for the international order?" and "Could I please have an extra serving of tripe?" OK, that last one will just be a personal quest for yours truly, but you get the idea.

We will also be "Meeting with high-rank officials from the Ministry of Foreign Affairs and the International Liaison Department of the Central Committee of the CPC" -- so with luck, I'll be able to post blog items that will impress Chinese readers more than, say, your average Tom Friedman column. Assuming, that is, that the interwebs are semi-friendly over there.

While I am praying for an upgrade on my flight to Beijing winging my way to the Middle Kingdom, go and contemplate Gideon Rachman's latest in the Financial Times. He points out that should China supplant the United States during this decade, it will be a very strange superpower indeed:

The ascent of China will change ideas of what it means to be a superpower. Over the course of the American century, the world has got used to the idea that the world’s largest economy was also the world’s most obviously affluent nation. The world’s biggest economy housed the world’s richest people.

As China emerges as an economic superpower, the connection between national and personal affluence is being broken. China is both richer and poorer than the western world. It is sitting on foreign reserves worth $3,000bn. And yet, measured at current exchange rates, the average American is about 10 times as wealthy as the average Chinese....

The power of China – combined with anxiety about the frightening public debts being built up in the US, the EU and Japan – will challenge western ideas about the relationship between democracy and economic success. Ever since the US became the world’s largest economy, towards the end of the 19th century, the most powerful economy in the world has been a democracy. But, if China remains a one-party state over the next decade, that will change. The confident western slogan that “freedom works” will come under challenge as authoritarianism becomes fashionable, once again.

What do you think? More tripe, or go for the chow fun instead?

In my last post I mentioned how China was encountering resistance to its rising power.  Now, via Kindred Winecoff, I see a whole mess of reportage about China's mounting internal difficulties.  In no particular order: 

1)  Nouriel Roubini has focused his Dr. Doom-O-Vision on the Middle Kingdom, and doesn't like what he sees:

China’s economy is overheating now, but, over time, its current overinvestment will prove deflationary both domestically and globally. Once increasing fixed investment becomes impossible – most likely after 2013 – China is poised for a sharp slowdown. Instead of focusing on securing a soft landing today, Chinese policymakers should be worrying about the brick wall that economic growth may hit in the second half of the quinquennium....

[N]o country can be productive enough to reinvest 50% of GDP in new capital stock without eventually facing immense overcapacity and a staggering non-performing loan problem. China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging.

Commercial and high-end residential investment has been excessive, automobile capacity has outstripped even the recent surge in sales, and overcapacity in steel, cement, and other manufacturing sectors is increasing further. In the short run, the investment boom will fuel inflation, owing to the highly resource-intensive character of growth. But overcapacity will lead inevitably to serious deflationary pressures, starting with the manufacturing and real-estate sectors.

Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment – including East Asia in the 1990’s – have ended with a financial crisis and/or a long period of slow growth. To avoid this fate, China needs to save less, reduce fixed investment, cut net exports as a share of GDP, and boost the share of consumption.

The trouble is that the reasons the Chinese save so much and consume so little are structural. It will take two decades of reforms to change the incentive to overinvest.

Now, Roubini is enough of a persistent doomsayer that it would be easy to discount this argument -- if it wasn't for the fact that this jibes with the opinion  of other China economy-watchers.  This coming-bust prophesizing comes on top of arguments made by Barry Eichengreen, Donghyun Park and Kwanho Shin that as China hits middle-income status, it will hit a "middle income trap" of slower growth.  (One interesting question is whether, as China encounters rampant inflation, its eventual decision to let the RMB appreciate will help ease some of these pressures). 

2)  Meanwhile, China's political leadership appears to be engaged in a full-fledged freakout over the Arab revolutions and any whisper of a similar phenomenon happening in China.  Rising food prices are leading to price controls and an anxious government monitoring if/when more expensive staple goods lead to political unrest.   That said, Chinese authorities seem to be on top of the whole crushing dissent thing: 

According to Chinese Human Rights Defenders, an NGO, by April 4th some 30 people had been detained and faced criminal charges relating to the so-called “jasmine revolution”—an inchoate internet campaign to emulate in China recent upheavals in the Middle East and north Africa. Human Rights Watch, another NGO, reports that a further 100-200 people have suffered repressive measures, from police summonses to house arrest. This has been accompanied by tighter censorship of the internet, the ousting of some liberal newspaper editors, and new curbs on foreign reporters in China, some of whom have been roughed up....

Even more worrying, however, is the increasing resort to informal detentions, punishments and disappearances. These are outside the law, offering the victim no protection at all. The government now dismisses the idea that one function of the law is to defend people against the arbitrary exercise of state power. On March 3rd a Chinese foreign-ministry spokeswoman told foreign journalists: “Don’t use the law as a shield.” Some people, she said, want to make trouble in China and “for people with these kinds of motives, I think no law can protect them.”

3)  As for China's assessment of its external security situation, the  State Council released its 2010 White Paper on defense last month.   As this East Asia Forum summary suggests, there's a slight change in tone from the 2008 white paper:

The introductory assessment of the ‘security situation’ section notes that the ‘international balance of power is changing,’ that ‘international strategic competition centring on international order, comprehensive national strength and geopolitics has intensified,’ and that ‘international military competition remains fierce.’  Despite this sense of turbulence, and as was the case in 2008, the 2010 paper assesses that ‘the Asia Pacific security situation is generally stable.’ But the additional observation in the 2008 paper, namely, ‘that China’s security situation has improved steadily’ does not appear in 2010. One possible reason is that the 2010 paper reports that ‘suspicion about China, interference and countering moves against China from the outside are on the increase.’ 

In light of all these developments, yesterday's Economist editorial should come as no surprise:

The view from Beijing, thus, is different to the view from abroad. Whereas the outside world regards China’s rulers as all-powerful, the rulers themselves detect threats at every turn. The roots of this repression lie not in the leaders’ overweening confidence but in their nervousness. Their response to threats is to threaten others.

Now, as someone who's pointed out these problems on occasion on this blog, you might think I'm pleased as punch about these developments.  Nope.  First, from an economic standpoint, a recessionary China eliminates a vital engine of global economic growth.  Second, as I wrote back in January: 

Exaggerating Chinese power has consequences. Inside the Beltway, attitudes about American hegemony have shifted from complacency to panic. Fearful politicians representing scared voters have an incentive to scapegoat or lash out against a rising power -- to the detriment of all. Hysteria about Chinese power also provokes confusion and anger in China as Beijing is being asked to accept a burden it is not yet prepared to shoulder. China, after all, ranks 89th in the 2010 U.N. Human Development Index, just behind Turkmenistan and the Dominican Republic (the United States is fourth). Treating Beijing as more powerful than it is feeds Chinese bravado and insecurity at the same time. That is almost as dangerous a political cocktail as fear and panic. 

Developing.... in very disturbing ways. 

Over at The National Interest, Ted Galen Carpenter blogs that America's militarized focus on the Middle East is providing a huge strategic opening for China: 

Members of China’s political elite who are eager for the Middle Kingdom to displace the United States as the world’s leading power probably can’t believe their good fortune. America has so many natural advantages that such a displacement would normally take several generations, if it occurred at all. Yet clumsy, counterproductive U.S. policies may be shortening that time frame dramatically....

Global meddling is also damaging the American brand with respect to political values and even popular culture. That is especially apparent in the Muslim world, where public opinion surveys reveal that positive views of the United States now sometimes languish in the single digits. But America’s popularity has waned even in Europe and other formerly very friendly regions. Even as Washington’s aggressive behavior alienates populations, especially in Asia, Africa, and Latin America, China is cultivating countries in those regions, portraying itself as a less intrusive, more cooperative political and economic partner.

Um, Ted?  2006 called, and it wants the hackneyed geopolitical analysis back.... and sent via MySpace. 

Seriously, this blog post reads like it's five years old.  It either ignores or elides the following facts: 

1)  America's popularity in the rest of the world has rebounded quite  nicely since 2006

2)  Contrary to Carpenter's claims, the Libya intervention has gone down rather well on the Arab street.

3)  China committed a series of foreign policy blunders in 2009 and 2010 that increased regional and global wariness about the Middle Kingdom and (according to China experts who talk to me) forced Beijing to rethink its grand strategy. 

4)  Chinese authorities are currently occupied with trying to censor news about the Arab revolutions, play hide and seek with its dissidents, get a grip on its real estate bubble, and avoid populist blowback for its Africa investments.  I'm not seeing a lot of successful efforts by Beijing to push the "less intrusive" line elsewhere in the globe. 

These are pretty important facts that get in the way of Carpenter's analysis.  Now, there is a glimmer of truth to this kind of realpolitik argument.  Saudi Arabia, for example, is less than thrilled with how the Obama administration is handling the Arab revolutions, and it might cozy up more to Beijing as a result.  That said, if we're really witnessing a fouth wave of democratization in the Middle East, does Carpenter seriously think that these regimes will automatically be more sympathetic to China than the United States?  That would be the realist argument, but I think this is one of those situaions when realists don't sound terribly grounded in reality. 

There are a lot of good critiques that can be levied against American grand strategy and the Obama administration's foreign policy in the Middle East.  The notion that China has gained a strategic advantage in recent months ain't one of them. 

Colin Bradford has written a lot of useful and interesting material on global economic governance.  I say this because I'm not really sure that his latest FP contribution meets the high standard of his prior work. 

In "Seven New Laws of the G-20 Era," Bradford seems to be arguing that even if there are disagreements within the G-20, it's still an effective public policy forum.  Here's a sample "law":

1. Visible disagreements can have positive side effects

Some commentators have argued that, because the G-20 reveals differences and divisions, the group itself must be a failure. Yet gone are the days when we could categorize a summit as a success or a failure based on the outcome document. Dichotomous thinking doesn't really work anymore. So if G-20 meetings display more tension than consensus, that might actually be a good thing. In its discord, the G-20 merely reflects the landscape of this dynamic 21st century. There is order and disorder in our world today, competition and coordination, conflict and consensus -- all going on at the same time. The G-20 is flushing those issues up not only for leaders to deal with but for publics to deal with as well. Unlike the G-8, the G-20 is creating stronger linkages between leaders and publics, because -- not in spite of -- the fact that the conflicts are visible.

Hmmmm..... nope, not buying this spin.  Bradford's basic argument is that the G-20 exposes the fundamental disagreements  so that the global public sphere can better understand the fundamental faultlines of global economic governance.  The publicist that resides inside my brain can appreciate the virtue of this spin, but it's just that. 

It's true that governance structures can serve as arenas of contestation.  The problem with this logic is threefiold, however. 

First, as a general rule, mass publics don't pay too much attention to high-falutin' economic summits.  The issues are too arcane and the remove from daily life seems to large.  So the only thing the public will digest from G-20 deadlock is that leaders can't agree on something. 

Which leads to the second point -- in the end, publics usually want to see outputs from governance structures.  There can be virtues from policy deadlock, but I'm thinking that if an issue makes it to the G-20 agendas it's because a lot of people want concrete policy action rather than additioonal bloviation.   Continued disagreement will lead to mounting public frustration.

Which leads to the third point -- many national governments can endure long-lasting policy deadlocks because their domestic legitimacy is unquesioned.  In the United States, for example, despite mounting frustration with a sclerotic policy process, there's not a huge groundswell for amending the Constitution to make it easier to pass laws.  That's because both the Constitution and the U.S. government have been around for a while. 

The G-20 doesn't have this legitimacy "cushion" to fall back on.  It's not a national government with a monopoly on authority within its bailiwick.  It's not a treaty body like the WTO or IMF.  Unlike even the G-8, it can't point to decades of existence as a justification for its continued relevance.  The G-20 rises and falls with its perceived effectiveness.  While the forum had a good 2008 and a decent 2009, last year was a friggin' disaster.  If the trend of policy gridlock continues, it won't matter what Nicolas Sarkozy proposes, the G-20 will be a dead forum walking. 

Unfortunately, Bradford's essay sounds like a marriage counselor telling a troubled couple to "own your problems... embrace the discord."  Sorry, not buying it. 

Am I missing anything? 

Last week Reuters' Emily Flitter filed quite the story, entitled "China flexed its muscles using U.S. Treasuries ," about China's financial power over the United States.  Here's the opening: 

Confidential diplomatic cables from the U.S. embassies in Beijing and Hong Kong lay bare China's growing influence as America's largest creditor.

As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms -- from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck.

The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.

This story generated a lot of interest across the mediasphere.  FT Alphaville called it "Diplomacy by US Treasuries."  AFP reports that the "sensitive cables show just how much influence Beijing has and how keen Washington is to address its rival's concerns." 

As someone who's published on this question, you'd think I'd be very happy at the attention this issue is receiving.  And Flitter deserves kudos for going through the cables to find clear efforts by Chinese officials to use its financial muscle to get what it wanted from the United States. 

The thing is, the reportage is framed to suggest that China not only asked for concessions, but the United States granted them.  And Flitter's own story suggests that very little in the way of concessions actually happened. 

Here are the portions of Flitter's story that discusses U.S. responses to Chinese pressure: 

On Chinese requests to halt/restrict arms sales to Taiwan:  Flitter records no response.  These concerns were voiced in late 2008 and the arms sales went ahead in early 2010, so there doesn't appear to be much influence here.  AFP suggests that this pressure led the U.S. to not sell F-16's to Taiwan, but I don't think that option was ever in the cards. 

On Chinese demands that they be provided guarantees for Chinese re-entry into the U.S. repo market:

The U.S. government does not appear to have offered the Chinese a special setup guaranteeing U.S. banks. Instead, the cables show, American diplomats reassured the Chinese by pointing out that Washington had infused banks' balance sheets with $700 billion in fresh capital, effectively propping up the banking system.

On Chinese demands for providing explicit U.S. government guarantees of Fannie Mae and Freddie Mac debt: 

To defuse the situation, the Treasury Department sent Undersecretary for International Affairs David McCormick to Beijing for two days in October 2008. The gesture went over well.

"All of Undersecretary McCormick's counterparts appeared to appreciate his willingness to come to Beijing in the midst of a financial crisis," Piccuta wrote in a cable dated October 29, 2008. "Interlocutors stressed that unless leaders' concerns about the viability of banks and U.S. government-sponsored enterprises (GSEs) are assuaged, lower-level officials will be constrained from taking on greater counter-party risks."

The cables show McCormick trying to reassure the Chinese. "In each meeting, Undersecretary McCormick emphasized that even though the U.S. government did not explicitly guarantee GSE debt, it effectively did so by committing to inject up to $100 billion of equity in each institution to avoid insolvency and that this contractual commitment would remain for the life of these institutions," [Deputy Chief of Mission at the U.S. Embassy in Beijing Dan] Piccuta wrote.

On Chinese protests regarding Federal Reserve purchases of Treasuries and agencies in March 2009:  Flitter has no response, though the fact that the Fed went ahead with QE2 suggersts that Chinese pressure didn't deter the Federal Reserve.

On responses to Chinese requests that CIC be allowed to participate in bidding on Morgan Stanley's new equity issuance:

There's no record in the cable of how Geithner responded, but it was only a day later, on June 3, that CIC announced plans to purchase $1.2 billion in Morgan Stanley shares.

A spokesperson for the Fed said in the instance of the June 3 CIC investment, no application for an exemption was made to the Federal Reserve Board.

On the general dynamic of Chinese financial pressure:

The cables also indicate a high level of confidence among the Americans that China can't entirely stop buying U.S. debt, a sentiment shared by most economists who describe the dynamic as a form of mutually assured financial destruction. 

So, to sum up, the Chinese maybe got a small break on being able to particupate in the Morgan Stanley auction.  Beyond that, all of these efforts led to the dilomatiic equivalent of hand-holding and not much else.  And, hey, what do you know, that's pretty much consistent with what I wrote about this back in late 2009.  So, contrary to some deep-seated fears of mine, the Wikiliaks cables appears to buttress rather than contradict prior scholarship. 

Flitter deserves credit for making explicit what had only been inferred, but I'm worried that commentators are drawing the wrong lessons from her article.  The big reveal here is not that China tried to exercise its financial muscle.  The big reveal is that these efforts generated next to nothing in the way of U.S. concessions.  China's financial might does give it the ability to deter U.S. pressure -- but to China's growing frustration, it doesn't yield much else. 

While I was obsessing about Egypt last week, I see that John Quiggin, William Winecoff and others have been having a rollicking debate about the status of American hegemony, the fungibility of military power, and Boeing/Airbus subsidies.  OK, that last one is less interesting, but I strongly encourage readers to go through the comment thread to that blog post. 

Essentially, Quiggin contends that:

[T]he decline of the US from its 1945 position of global pre-eminence has already happened. The US is now a fairly typical advanced/developed country, distinguished primarily by its large population. 

Ergo, other large market jurisdictions, like the European Union, are equal to the U.S. in terms of relative power. 

This cheesed off Winecoff and others into pointing out the myriad ways in which the U.S. power profile is a) still outsized; and b) largely shaped the current global order we live in; and c) allowed entities like the EU to focus on welfare maximization rather than security.   

Dan Nexon, in a comment to Quiggin's last rejoinder, gets at one nub of the debate:

John’s pointing out, quite rightly, that military power isn’t necessarily fungible. He’s doing so in the context of economic and regulatory power, which is the most “multipolar” dimension of global power right now. His IR critics are pointing out that the US still has outsized influence across a number of domains, and that some of those domains involve international (economic) institutions. They’re both onto something.

I pretty much agree with Dan here.  In the military sphere, the U.S. remains a hegemonic power.  In the economic and regulatory realms, well, I wrote a whole book arguing that until recently we lived in a bipolar world, so I'll side with Quiggin on that score. 

There's something missing from this debate that is worth raising, however -- a proper definition of power.  For example, in his first post, Quiggin noted that "[advanced industrialized countries] might be said to have declined in relative terms. But this doesn’t seem to me to constitute 'decline' in any important sense."  This is heresy to an international relations scholar, in that power is viewed as a zero-sum commodity. 

Beyond that, however, it is useful to think about the power to deter change from the status quo vs, the power to compel change in the status quo.  In a deterrence scenario, countries use their capabilities to ward off pressure from other actors, or from structural pressures.   In a compellence scenario, a powerful government threatens to use statecraft to extract concessions from other actors, or use power to alter the rules of the global game. 

Deterring pressure by others is different than applying such pressure to others.  With military or economic statecraft, it is generally easier to defend than attack.  Many IR scholars argue that the ability to deter is a necessary condition of the power to compel.  Only after an actor has the ability to resist pressure from others will they contemplate whether they can be the actor to generate pressure.  Countries possessing sufficient reservoirs of power should therefore have both greater autonomy of action and be better placed to apply pressure on other actors. 

What the past few years have demonstrated is the relative decline of U.S. compellence power and the rise of other countries deterrence power.  Certainly the recent uses of U.S. military force haven't yielded the expected results.  In the economic realm, countries like India and Brazil can veto WTO negotiation rounds in a way that simply wasn't possible 15 years ago.  Similarly, China can resist U.S. jawboning on its exchange rate policy far more than in the past. 

On the other hand, neither U.S. deterrent power nor other countries' compellence power has changed all that much, even in the economic realm.  The rest of the G-20 can scream as loud as they want, but  quantitative easing is going to continue.  China has tried to find ways to use its newly found financial muscle to force changes in the international system, to little avail.  To be sure, Russia, China and others can compel countries on their immediate periphery, but even a glance at the 2008 Russian-Georgian war suggests that even modest efforts like these are expensive and messy. 

So... we live in a world in which more actors have vetoes over systemic change but no actor has the ability to truly compel change.  This leads to lots of talk about "G-zero worlds" and so forth. 

Just to be provocative, however, I wonder if what's truly changed is the extinction of compellence power as we know it.  The primary, ne plus ultra  tools of compellence require a willingness to kill, jail or starve a lot of people.  Recent flare-ups like Iran in 2009 and Egypt right now suggests that such actions are possible at the domestic level, but pretty damn costly; even authoritarian countries flinch at using brute force on a domestic population.  Cross-border efforts are even more expensive in terms of both material and reputational costs. 

This isn't the end of power, but it might be the end of one particular dimension of power.  I'm not entirely convinced that this supposition is true, and am willing/eager to hear counterarguments.  That said, I still hereby claim The End of Power as my title, so everyone else just back off, OK? 

More seriously, am I missing anything?