Wednesday, June 1, 2011

New Review: The Next Decade: Where We've Been . . . And Where We're Going, by George Friedman

New York: Doubleday, 2011, pp. 272.

The purpose of George Friedman's new book The Next Decade is to offer a "higher-resolution" image of the first phase of the era he covered in his previous book, The Next 100 Years. Next Decade is much more detailed in its predictions of events, both in discussing what he mentioned in the previous book at greater length, and its discussion of "lesser" factors and actors almost entirely overlooked in that one (like South America, sub-Saharan Africa and India). This book is also much more prescriptive. (Indeed, where Niccolo Machiavelli played the role of a prince's mirror, Friedman plays the part of a "presidential" one, spelling out a grand strategy for the world he predicts.)

Friedman's analysis begins with a consideration of the 2008 financial crisis as a defining event for the period, for two reasons. The first is that it has resulted in a fundamental shift in power from financial elites to state elites, the nation-state accordingly enjoying a resurgence. The second is that it represents the high-water mark for both European integration, and the status of China as an economic juggernaut, both entities to soon appear much less dynamic. As a result the United States (which he believes to have been only lightly damaged by the crisis, or its foreign policy errors in the past decade) remains the world's dominant actor. Indeed, rather than a retreat from empire as the world becomes more polycentric anticipated by so many other observers, Friedman anticipates that the U.S. will "grow" into the imperial role.

In practical terms this means maintaining the country's access to the world economy's resources and markets through a Halford Mackinder-like geopolitical strategy of preventing the emergence of a (Eurasian) contender capable of contesting its dominance of the oceans. As in the Cold War, that strategy means special attention to Europe, the Middle East and East Asia. However, unlike in that earlier period, the United States does not face a meaningful challenge from a single power in all three regions, the three balances largely separate from one another. (Indeed, the balance in the Middle East is itself comprised of three separate balances--the Arab-Israeli balance, the Iran-Iraq balance, and the Indo-Pakistani balance.)

The strategy Friedman recommends has the United States extricating itself from its over-involvement in the Middle East during the last decade (by distancing itself from the Arab-Israeli conflict, reaching an accommodation with Iran, and restabilizing South Asia with a pull-out from Afghanistan and a Pakistani aid package), and limiting its involvement in East Asia (mostly self-balancing for the time being, though attention to a long-range game is called for), to return to its earlier focus on Europe (where the dominant fact is the rise of a Moscow-Berlin-Paris axis, by far the most probable challenge to American hegemony, which the U.S. will counterbalance against through relationships with the surrounding European states, like Britain, Italy, Turkey, and the Scandinavian and "Intermarium" countries).

Latin America and Africa, two regions virtually ignored in the previous book, get somewhat more attention this time. The dominant issues the U.S. faces in Latin America in his reading are the problems of drugs and illegal immigrants, the containment of Chavez's Venezuela (which Friedman regards as only a minor threat), and the prevention of powers from outside the hemisphere from establishing a military presence in it, especially in strategically located Cuba. (The only real surprise readers might find here is a longer-term emphasis on keeping Brazil from emerging as a South Atlantic hegemon.) Sub-Saharan Africa is a mess, but one not likely to matter much in the larger picture, so that it would be an ideal scene for low-cost humanitarian gestures (a luxury the U.S. can afford, and which as anyone who has actually bothered to read The Prince ought to remember, are part of the Machiavellian package).

Friedman also makes some guesses about the "demographic and technological imbalance" he anticipates as leading industrial nations gray while our technological development stagnates (especially in the areas of medicine and automation crucial to coping with an aging population, and our energy base), about climate change, and about the perils the United States will face being both republic and empire. He expects that aging populations will contribute to the investment of labor-scarce Germany and Japan in Russian and Chinese manufacturing, that fossil fuels will have to meet our demand for energy (which our rising use of robotics will expand) until space-based solar power becomes viable, while deferring the significance of climate change to "our children's and grandchildren's time." He is also optimistic about the U.S.'s ability to cope with the contradictions of its position, developing the "culture and institutions needed to manage the republic cast in an imperial role," especially a rationalized foreign policy apparatus and appropriate military investment focused on the maintenance of American command of the seas, with the help of better leadership from the top.

To his credit, Friedman makes some good points. His critique of the strategic errors of the last decade, and the way in which they dislocated American policy, is on the whole sound. The same goes for his explanation of why terrorism with weapons of mass destruction is far less plausible than it is commonly made out to be. His empirical argument for our period as one of technological stagnation belied by superficial progress in computing and communications is particularly strong.1

Unfortunately, much else in his analysis is underdeveloped at best. In particular, he fails to follow up his sweeping claim about a turn to a more statist economics with any discussion of the practical implications, either for individual states, or for the global economy, crucial as these are.2 (Indeed, his discussion of sub-Saharan Africa, which he consigns to irrelevance partly on the grounds that foreign corporations will not call for much help from their patron states in operating there, runs contrary to this, while flying in the face of recent reality.)

His analysis is also badly flawed by his misreading of the international balance of power as it stands at present, and as it is likely to develop in the coming decade. Friedman is quite right when he notes that even the U.S.'s weaknesses, like its reliance on foreign borrowing, add to its influence in various ways. However, he fails to appreciate how those weaknesses are also undermining that influence, as with that same reliance on debt, as well as many of the problems driving that debt, like deindustrialization and chronic trade deficits. These are serious, long-term threats to its economic standing, and in turn, the "deep" power it possesses, which he does not acknowledge, let alone answer. (It might be said, too, that he is overly dismissive of the costs of the errors he does recognize, as with U.S. actions in the Middle East in the past decade, even as he recognizes that these contributed to the 2008 financial shock, and gave Russia its window of opportunity.)

Just as Friedman may be overoptimistic about the U.S.'s position, he may be overly pessimistic about the prospects of the EU and China. For all its problems, it may be that Friedman overestimates the significance of the popular enmity toward the EU (a project which has always been more popular with elites), while underestimating the potential significance of several other factors, like the developing economic interconnections between Europe and North Africa (extending the influence of the entente through the Mediterranean); the plausibility of a broader European accommodation with Russia, either through the EU or bilateral ties (such as Russia enjoys with Silvio Berlusconi's Italy); and the continued attraction Europe has for Turkey over the United States (which trades much more with Russia, Germany and France than with the U.S.).3 Any combination of these factors easily translates to a much stronger European entity than Friedman anticipates, and the unworkability of his strategy for checking the entente that concerns him (especially if the U.S. proves weaker than he predicts, as implied above), should it actually arise.

At the same time, while Friedman is correct to recognize the obstacles to China's growth (indeed, in overlooking ecology, and the unbalanced trade and financial relationships it has with the U.S., he understates the range of them), and to recognize that internal concerns will absorb much of the country's energy and resources, the claim that China has already peaked is a very big one--and not made more persuasive by his underestimation of the country's economic weight. China may be a distant second to the U.S. in total income (and rather farther behind than that in per capita income), but it is already the world's largest manufacturer, and a financial heavyweight financing American borrowing, so that it enjoys leverage out of proportion to its GDP (just as the opposite may increasingly be the case with the United States). Friedman also overestimates the extent to which geography constrains China's economic expansion, or the expansion of other instruments of Chinese power. (As the situation already stands, China is thoroughly integrated with Southeast Asia and Central Asia, and making major inroads into Siberia.) Finally, he overlooks the extent to which a more consumption-oriented strategy would continue to strengthen China's already formidable position (albeit at a less staggering rate), while ameliorating its problems. Even with the U.S. weaker than he expects, this would not mean China's overwhelming the regional balance between now and 2020, but that is due at least partially to the factors he neglects in his analysis of the East Asian situation, like the weight of Russia (which he all but excludes from the East Asian discussion) and India (ditto, just as he curiously excluded China from the discussion of the South Asian balance).

Additionally, while it may be that climate change and energy scarcity will not significantly alter the international balance of power between now and the start of the century's third decade, more frequent and severe bouts of bad weather (such as has affected harvests this past year), along with rising energy prices, are likely to further dampen economic growth in the years to come. Those impacts are also likely to be unevenly distributed, given the differing geographies and energy portfolios of various powers--perhaps not enough to significantly shift the balance of power between now and 2021, but all too plausibly working against the U.S. and China (perhaps to the relative advantage of the EU), all the more so as Friedman downplays the extent to which energy conservation and renewable energy technology can establish a cushion against those developments.4

Granted, both the EU and China are not likely to be militarily competitive with the U.S. in the next decade, or even for much longer than that. Yet, it should be remembered that military force is just one area of international competition, one that Friedman perhaps overstresses in this analysis (especially given that anything like an actual U.S. war with a Russo-German alliance, China or any other comparable power in this time frame is remote). At the same time, it should not be thought they are totally without options in this area, like supplies of arms, technology and expertise to client states (as in China's relationship with Sudan), and the establishment of overseas bases, if only token ones, in strategic locations (like France's new facility in the Persian Gulf). Additionally, it is worth noting that peacekeeping is a recognized strength of the EU, and that the presence of European peacekeepers in the Balkans has furthered the Union's interests there.

In short, my guess is that the U.S.'s preponderance of power is rather less dramatic than he makes it out to be because of both the U.S.'s weaknesses in key areas, and his failure to appreciate in full the strengths of Europe and China. For the next decade, this may narrow the gap among the three actors rather than widen it. At the same time, all three actors will be operating in an essentially stagnant world economy, dampened further still by increasing environmental and resource shocks, leaving them all with fewer resources (and opportunities) with which to pursue their ambitions.

1. As Friedman notes "We are now at an extrapolative and incremental state in which the primary focus is on expanding capacity and finding new applications for technology developed years ago . . . it is very difficult to think of a truly transformative technological breakthrough that occurred in the past ten years" (p. 229).
2. As a reader I was left wondering whether this meant states would have more scope for the heterodox strategies essential to industrial development (as thinkers from Alexander Hamilton to Ha-Joon Chang have demonstrated), reining in the unproductive and destabilizing forms of global finance that produce crisis after crisis, or strengthening the demand essential to fueling substantive, long-term growth, either in the U.S., or globally. Given recent experience, the failure to address these problems (as indeed they have not been addressed) suggests the crisis of 2008 will be followed not only by the continued deepening of the stagnation characterizing the post-1973 period (American growth in the first decade of the twenty-first century was in fact weaker than at any time since the Depression), but by deeper and more damaging crises with still new disruptive effects, which might again work to the particular disadvantage of the United States.
3. One might also note the vulnerabilities of one of the key actors in the U.S.'s balancing strategy, Britain. The country shares many of the U.S.'s economic weaknesses with respect to deindustrialization, debt and balance of payments issues, with falling British oil and gas output (and increasing imports) worsening the picture. Elsewhere, his analysis assumes the rapid economic growth of American regional partners (like Turkey), which in turn rely on the active promotion of that strength by the U.S.--something he simplistically discusses as if it could be done by flipping a switch.
4. My guess is that, contrary to the portrait he offers, renewable energy production is a more promising area for R & D dollars than either medicine (likely to continue to disappoint) or robotics (where autonomous, versatile machines remain a long way off). The problem is that the political support for renewables remains too weak to realize the potential of even present technology, let alone push the envelope.

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My Writings on the Recession (A Listing)
Freefall: America, Free Markets and the Sinking of the World Economy, by Joseph Stiglitz
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Revisiting Head to Head
The Next 100 Years: Another View
The Next 100 Years: A Forecast for the 21st Century, by George Friedman
The New French Base in the Gulf
The Future of War, by George and Meredith Friedman

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