Liberal RealismThe Foundations of a Democratic Foreign Policy.

G. John Ikenberry & Charles A. Kupchan.

THE UPCOMING presiden-tial election represents adefining moment for the

United States and its engagement in globalaffairs. The foreign poHcy of the BushAdministration represents a radical depar-ture—in principle as well as practice—from the tradition of liberal realism thatguided the United States throughout thesecond half of the 20* ^ century. TheDemocratic Party promises to reclaim lib-eral internationalism, restoring a centristforeign policy guided by ideals as well aspower realities. On offer are two contend-ing visions of America's role in the world.In one, international order arises exclu-sively from U.S. pre-eminence, withAmerica wielding its unchecked power tokeep others in line and enforce interna-tional hierarchy. In the other, internation-al order arises from the coupling ofAmerica's pre-eminence with its liberalfounding principles, with the UnitedStates wielding its power to craft consen-sual and legitimate mechanisms of inter-national governance. Which vision pre-vails will have enormous consequences forglobal politics.

We have two principal objectives.

G. John Ikenberry is Albert G. Milbank Professorof Politics and International Affairs atPrinceton University. Charles A. Kupchan isprofessor of international affairs atGeorgetown University and senior fellow atthe Council on Foreign Relations.

First, we illuminate the contrasting logicsthat inform policy choice, hopefully con-tributing to a richer public debate.Second, we contend that liberal realismhas clear advantages over the approach ofthe Bush Administration; a Democraticforeign policy guided by it would enhanceboth U.S. security and international sta-bility. We examine the five core issuesthat provide a conceptual foundation for aU.S. grand strategy: the operation of thebalance of power; terrorism and its impacton the international system; the role ofrules and institutions in maintainingorder; the connection between legitimacyand international governance; and themanagement of deficits, trade and theglobal economy. We first outline howeach of these issues affects U.S. policy andglobal politics, next describe and critiquethe Bush Administration's approach toeach issue, and then go on to examine ourDemocratic alternative and its advantages.

Operating the Balance of Power

B ELIEFS ABOUT the dynam-ics of power balancing and theeffects of polarity on system

stability play a central role in the formula-tion of grand strategy. Three sets of ques-tions are at issue. What are the systemiceffects of unipolarity, and, in light ofthose effects, how should the UnitedStates wield its primacy in order to pro-mote stability? How durable is unipolarity.

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and what strategy should the UnitedStates pursue to shape the emerginggeopolitical environment? Should U.S.power be measured primarily in materialterms, or does a multi-dimensionalapproach offer a more accurate measureof America's relative power position?

To its credit, the Bush Administrationhas taken a clear position on each of thesevital questions in the aftermath of 9/11,articulating its views in its NationalSecurity Strategy and supporting docu-ments and speeches. For the Bush team,international order is a direct by-productof U.S. primacy. System stability increasesin step with U.S. power; the starker theasymmetries, the less likely it becomesthat any nation will even consider chal-lenging the U.S.-led order. The UnitedStates should demonstrate its politicalwillingness to use its preponderant poweras it sees fit—especially after 9/11 —enhancing its ability to dissuade potentialchallengers and to counter unconvention-al threats before they compromise U.S.security. In sum, uncontested U.S. prima-cy coupled with unmistakable resolve willforestall balancing in the internationalsystem, instead establishing stable hierar-chy. As President Bush stated in a speechat West Point in June 2002,

America has, and intends to keep, militarystrengths beyond challenge . . . thereby, mak-ing the destabilizing arms races of other eraspointless, and limiting rivalries to trade andother pursuits of peace.

This strategy is predicated upon theassumption that unipolarity is sustainablefor the foreseeable future and should bepreserved for as long as possible.American preponderance will discouragepotential challengers from seeking theresources needed to contend for primacy,and even if dissuasion fails, no state couldconceivably pull even with the UnitedStates for decades to come. Such confi-dence is based primarily upon America's

military superiority and the presumedmaintenance of that superiority due toongoing investment in capability as wellas research and development. The lever-age provided by such pronounced materi-al advantage, coupled with the impor-tance of demonstrating U.S. resolve,makes it both possible and desirable forthe United States to act in a unilateral andunconstrained fashion; allies are not need-ed to tame enemies that are no match.

THESE GUIDING supposi-tions are fundamentallyflawed. Basing America's

grand strategy on them triggers exactlywhat the Bush Administration is seekingto forestall: balancing against U.S. power.The Bush Administration is correct thatthe current international system is unipo-lar and that U.S. primacy is uncontested.It is also correct that in the post-9/11world, America must vigilantly protectitself against the threats posed by Islamicextremism, international terrorism andWMD, when necessary using its militarysuperiority to do so.

It is misguided, however, to assumethat America's preponderant power, whencombined with an assertive unilateralism,promotes stability as a matter of course.As the record of the past four years makesclear, the unfettered exercise of U.S. pri-macy has not led to deference and band-wagoning, but to resentment and incipi-ent balancing. The problem is not unipo-larity per se, but changes in the exercise ofU.S. power that have in turn changed for-eign perceptions of U.S. intentions andhow the United States will use its prepon-derant strength. A dominant America thatreassures others and deploys its power tosecure public goods induces systemic sta-bility; unfettered primacy deployed in theexclusive pursuit of national self-interestdoes the opposite.

The Bush Administration's grandstrategy rests on a second geopoliticalmisconception: that U.S. primacy is

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durable. To be sure, America's economicand military might ensures that it willremain the world's leading nation fordecades to come. But current powerasymmetries will inevitably diminish inthe years ahead. The European Union'swealth already rivals that of the UnitedStates, and it may well forge a more inde-pendent and unified security policy as thisdecade proceeds. Over the course of thenext decade, Japan may tire of always fol-lowing America's lead, China will emergeas a major power, and Russia, India andBrazil are poised to become stronger andmore assertive players. It will be impossi-ble for the United States to sustain cur-rent power asymmetries. Indeed, ifAmerica seeks to preserve unipolarity andits attendant sway over global affairs, itwill only ensure that other centers ofpower, as they rise, array their strengthagainst the United States.

Einally, the Bush Administration hasoverestimated the advantages of mihtarysuperiority and mistaken brute strengthfor influence, producing adverse conse-quences on a number of fronts. In Iraq,Washington was correct that SaddamHussein's regime would crumble underthe U.S. onslaught, but it failed to appre-ciate that the invasion would spawn a dan-gerous mix of nationalism and religiousextremism, leaving the United Statesstruggling against a guerrilla insurgencythat effectively neutralized America's mili-tary might. In similar fashion, the BushAdministration is aware that its unilater-alist bent has provoked anti-Americansentiment in many quarters, but it hasdiscounted the discontent because coun-tries opposed to U.S. policy do not havethe military wherewithal to stand inAmerica's way.

Although it is correct that othercountries are not forming alliances againstthe United States, Washington is over-looking the more subtle forms of balanc-ing that are occurring—with potentgeopolitical consequence. The broad

coalition that blocked UN authorizationof the Iraq War denied the United Statesthe legitimacy of international approval,substantially raising the economic andpolitical costs of the war. Allies bore 90percent of the costs of the Gulf War, butthe American taxpayer has financed mostof the current operation, and Washingtonhas been unable to convince key allies tosend troops to Iraq. If the United Statescontinues on its current course, it willenjoy military supremacy, but little else.

FROM THE perspective of lib-eral realism, management ofthe global balance of power

would be based on three propositions.First, the United States must wield itssuperior strength in concert with othersto ensure that it forestalls rather thaninvites balancing behavior. Re-establishingAmerica's bona fides as a benign hegemonnecessitates resuscitating the alliances,institutions and consultations that haveeroded under Bush's watch. The UnitedStates should of course reserve the right toact alone as a last resort, but Washingtonmust rediscover that the costs of unilateralaction usually far exceed the costs of seek-ing consensus.

Second, liberal realism entails movingwith—rather than against—the seculardiffusion of global power. The scope ofAmerican primacy will wane as this centu-ry progresses; the ultimate objectiveshould be to channel rising centers ofstrength into cooperative partnershipswith the United States. Furthermore,strength elsewhere, even if it comes at theexpense of America's relative power, neednot come at the expense of its influenceand security. If rising centers of power areintegrated into a rule-based order, theypromise to be net contributors to interna-tional stability. Americans would benefitsubstantially from a Europe that is capa-ble of projecting power outside its neigh-borhood and sharing risks and responsi-bilities with the United States. China is

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emerging as one of Asia's dominant states;what is in question is not whether itspower will rise, but the ends to which itwill use its growing strength.

Third, liberal realism rests on a multi-dimensional understanding of power, sen-sitive to the fact that America's militarysupremacy, although a vital element ofnational strength, is not sufficient to safe-guard American security. The UnitedStates should continue to invest in itsarmed forces and maintain its pronouncedmilitary advantage, but absent respect forU.S. leadership abroad, U.S. primacydoes more to divide the world than tounite it. Washington needs to renew thenon-military dimensions of its globalinfluence, working to reclaim its moralauthority abroad and to make disaffect-ed allies again feel like stakeholders inthe international system.

The International System & Terror

THE TERRORIST acts ofSeptember 11 necessitated afundamental reorientation of

U.S. grand strategy. A grievous attackagainst the United States came fromunexpected quarters using unexpectedmeans; neutrahzing Al-Qaeda and com-bating Islamic extremists became topnational priorities. Amid the ongoingeffort to adapt U.S. policy to unconven-tional threats, policymakers and scholarsalike must continue to address whetherthe events of 9/11 fundamentally alteredthe international system, requiring notjust adjustments to national strategy, butcomplete transformation.

The Bush Administration has taken adefinitive position on this question,embracing the effort to combat terrorismas America's defining mission for the fore-seeable future. From the administration'sperspective, the globe's geopolitical land-scape has been reconfigured. Countriesare "with us" or "with the terrorists"depending upon where they stand in

America's "war on terrorism" and the"conflict between good and evil." TheBush Administration's overhaul of grandstrategy included formal endorsement ofthe notion of pre-emptive—or moreaccurately, preventive—war, which itacted upon in attacking Iraq in 2003.

Whereas the Bush Administration hasbeen right to focus the country's attentionon the threats posed by terrorism andWMD, it has overreached in makingefforts to combat these threats America'sconsuming mission. The fight againstIslamic extremists should be added to thelist of more traditional priorities, notcome at their expense. The BushAdministration believes that the interna-tional system has changed much morethan it has, embracing a distorted world-view that has spawned a grand strategymarred by excess.

Several adverse consequences havefollowed. To begin, U.S. policy nowemerges from a conceptual template thatis not shared by most other nations of theworld. The events of 9/11 shocked manycountries, but their world-views did notundergo a transformation anywhere nearas profound as the one that has takenplace in the United States. The conceptu-al gap that has opened up between U.S.policymakers and their counterpartsabroad has contributed to the geopoliticaldivide that now separates the UnitedStates fi"om many of its traditional allies.

The Bush Administration has alsounwittingly advanced some of the objec-tives of Islamic extremists by overreactingand pursuing an errant strategy that haspolarized global politics. The AtlanticAlliance has been stretched to the break-ing point, with America's traditionaldemocratic allies now some of its

'See Philip Zelikow, "The Transformation ofNational Security", The National Interest(Spring 2003); and "One Year On: ASeptember 11 Anniversary Symposium", TheNational Interest (Fall 2002).

J^iberal Realism- .41

staunchest critics. The Iraq War and thebungled occupation that followed havebrought new recruits to Al-Qaeda andgalvanized popular sentiment in theMiddle East against the United States.The war itself was the product of excessand error—sloppy intelligence, faultyjudgment and ideological zealotry. So toodid it reflect skewed priorities, withremaining Al-Qaeda cells, weapons pro-grams in North Korea and Iran, andnuclear material in the post-Soviet spaceposing much greater threats to U.S. secu-rity than did the regime of SaddamHussein. Simply put, "clear and present"ought always to outweigh "grave andgathering."

COMBATING terrorism andthe spread of WMD wouldremain central to a Democratic

alternative to the Bush strategy, but liberalrealists would pursue these goals throughmore considered means.

First, Washington must embrace astrategy for combating terrorism that suc-ceeds in keeping intact America's keypartnerships. All components of thestruggle against terrorism—includingmilitary operations, intelligence sharing,asset freezing and law enforcement—aremore successfully pursued if the UnitedStates has its allies by its side. Achievingthis goal will mean giving up a black-and-white world-view defined by the terroristthreat and making U.S. policy moreresponsive to the concerns of allies. Analliance has meaning only when its mem-bers adjust their policies to take intoaccount their partners' interests.

Second, Washington would focus onthe concrete threats to the United Statesposed by Al-Qaeda and other extremistnetworks and not be distracted by wars ofchoice, such as Iraq. Doing so would notonly advance efforts to neutralize Al-Qaeda, but also help maintain the inter-national legitimacy of U.S. leadership. Itis important to keep in mind that the war

against the Taliban and Al-Qaeda inAfghanistan enjoyed widespread support,even in the Muslim world.

In this respect, a Democratic foreignpolicy should support Iraq's transition todemocracy but also limit the continuingcost of the occupation in U.S. lives,money and reputation. At the same timethat Washington secures more help fromits allies, it should expedite efforts to handover security matters to a reconstitutedIraqi army—even if that means settlingfor less than immediate democracy. Ingeneral, the United States should contin-ue to encourage and facilitate the promo-tion of democracy abroad, but it mustrealize that durable liberalization mustcome from within and not be imposedfrom the outside.

Third, a Democratic foreign policywould acknowledge that the BushAdministration was right to insist thatnew threats may at times require the pre-ventive use of force. However, it shouldlead multilateral efforts to forge new rulesof the road governing the use of forcerather than pre-emptively announce itsright to wage preventive war. Moreover,the United States should pursue the pre-ventive use of force only as a last resort,only when facing "clear and present dan-ger", and only after full consultation withother democratic nations.

Fourth, a Democratic foreign policyshould place much greater emphasis onpreventing the spread of materials used inthe production of nuclear weapons.Doing so entails expending more effortand money to ensure the security ofnuclear materials in the former SovietUnion. And Washington should act onthe reality that the United States has nochoice but to engage in tough-mindeddiplomacy to neutralize—and not merely"contain"—the threats posed by nuclearprograms in Iran and North Korea.

Fifth, presidential leadership will beneeded to advance efforts to enhancehomeland security. Reforming the inteUi-

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gence community and improving commu-nication among the intelligence agenciesand the FBI are particularly important. Sotoo are efforts to expand border controland surveillance and to step up inspectionat ports, especially those that serve ashubs for container traffic.

Sixth, liberal realists would step upefforts to secure a lasting peace in theMiddle East and serve as an even-handed mediator between Israelis andPalestinians. Ensuring the security andprosperity of Israel is a must, but theseobjectives will be most durably achieved ifthey are part of a two-state solution thatfulfills the national aspirations of thePalestinians. To move in this directionand mobilize the strong majority in Israelin favor of such a settlement, Washingtonmust work with its partners in Europeand the Middle East to neutralizePalestinian extremist groups and end ter-ror attacks against Israeli targets.

Finally, a Democratic foreign policyshould do more to get at the causes ofinstability and disaffection in the develop-ing world. The Bush Administrationdeserves credit for its MillenniumChallenge Account, its efforts to fightHIV/AIDS and its Broader Middle EastInitiative, aimed at putting in place thebuilding blocks of democracy and civilsociety in the region. Follow-on initia-tives should include doing more to ensureuniversal basic education and to eliminateglobal tariffs on agriculture and textiles, amove that would do much to stimulategrowth in the developing world.

The Role of International Rules irInstitutions in Maintaining Order

THE BUSH Administrationand liberal realists embraceopposing views of the role

and usefulness of international rules andinstitutions. The Bush Administrationtends to see international rules and insti-tutions as constraints on American power.

At best, treaties and multilateral agree-ments enhance the conduct of Americanforeign policy only at the margins. Atworst, they threaten to deny the UnitedStates its sovereignty and freedom ofaction. In contrast, liberal realists seerules and institutions as the infrastructureof the international system and thereforecentral to the pursuit of America's globalinterests.

According to the Bush Administrationand its supporters, the United States inthe 1990s was ensnared in a network of"global governance" initiatives, with for-eign powers seeking to cage Americanpower in international treaties and insti-tutions. The "new unilateralism", asCharles Krauthammer has labeled Bushforeign policy, is aimed at restoringAmerica's freedom of action and the pri-macy of American national interests:"Rather than contain power within a vastweb of constraining international agree-ments, the new unilateralism seeks tostrengthen American power andunashamedly deploy it on behalf of self-defined global ends."^

This stance taps into a traditionalAmerican aversion to international insti-tutions based on concern that theyinfringe on the nation's sovereignty. Tobind the United States to other countriesthrough treaties and agreements reducesthe ability of the American people toexercise popular sovereignty. WhenPresident Bush indicates—as he did in his2004 State of the Union address—that"the United States does not need a per-mission slip to take action to defenditself", he draws on a populist view thatAmerica alone has the right to make deci-sions about its security and well-beingand that it is the patriotic duty of U.S.leaders to resist the efforts of foreigners

^Krauthammer, "The New Unilateralism",Washington Post (June 8, 2001). See also his"The Unipolar Moment Revisited", TheNational Interest (Winter 2002/03).

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to subvert this sovereign right.The discomfort of conservatives with

international institutions and bindingagreements is most evident when it comesto the use of force. While liberal realistsare by no means willing to give upAmerica's sovereign right to the unilateraluse of force, conservatives are much morereluctant to take decisions concerning theuse of force to multilateral frameworkssuch as the UN or NATO. When Secretaryof Defense Donald Rumsfeld stated thatthe "mission determines the coalition", hewas offering a minimahst view of allianceobligations. The United States wantsallies, but only if its security partners fol-low Washington's lead and are useful forthe tasks at hand. The NATO alliance orthe bilateral security pacts in East Asia areseen purely in instrumental terms and notas expressions of a wider political partner-ship with deep reciprocal obligations.

FOR LIBERAL realists, thisapproach is extraordinarilyshortsighted. The Bush Admin-

istration's attitude toward alliances has leftthe United States with a paucity of securi-ty partners. Washington snubbed NATO'soffer of help in the Afghan War and vio-lated alliance norms of reciprocity andconsultation in the run-up to the IraqWar. As a consequence, allies willing tohelp with postwar reconstruction havebeen in short supply, leaving U.S. forcesexposed and overextended. There is a sec-ond cost to Rumsfeld's "coalitions of thewilling" formulation. Other countriesmight join an American-led military oper-ation, but without a treaty commitmentor other institutional framework forongoing security cooperation, some maylose interest. Indeed, Spain decided towithdraw its troops from Iraq after thechange of government in March 2004,and the Philippines followed suit in Julyto ensure the release of a citizen heldhostage by extremists.

More generally, if the United States

presents itself to the world as a "normbuster"—a state that does not respect orabide by international rules and norms—it will have no credibility when it asksother states to do so. The Abu Ghraibprisoner abuse scandal is illustrative. Themistreatment of Iraqi prisoners, alongwith a Justice Department memorandumasserting that the U.S. president in a timeof war is not bound by international con-ventions that ban torture, sends a danger-ous signal to the world—particularlywhen Washington exhibits a broaderantipathy toward international laws andagreements. America's moral authority iscompromised, and its call for respect ofhuman rights rings hollow, leavingAmerican citizens and soldiers exposedwhen on foreign territory and settingback efforts to extend the rule of lawabroad.

In contrast, liberal realists see rulesand institutions as a powerful tool, multi-plj ing American power in many ways. Atmajor historical junctions—particularlyduring the decade after 1945—the UnitedStates built order and created a favorableinternational environment for the pursuitof its interests through the constructionof multilateral institutions and pacts. Arules-based international system empow-ers rather than constrains the UnitedStates by structuring bargains that benefitboth the mighty and the meek. By gettingother states to operate within a set ofmultilateral rules and institutions, theUnited States reduces its need to continu-ously pressure and coerce other states tofollow America's lead. Weaker states,enticed by mutually acceptable rules ofthe game and a more predictableAmerica, willingly work with the UnitedStates rather than resist or balance againstit. The United States does accept somerestrictions on how it can use its power,but in doing so, it increases its influenceby striking consensual bargains to ensurethe cooperation of other states. The rulesand institutions that are created serve as

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an "investment" in the preservation ofAmerica's power advantages—somethingthat is particularly important today as thecountry prepares for a more diffuse distri-bution of global power. In the long run,the costs of reaching consensus are faroutweighed by the gains.'

Rules and institutions also advanceU.S. interests in ways that are indepen-dent of their specific functions. This isparticularly true of America's alliancepartnerships, NATO most of all. TheAmerican commitment to Europe and thewider security cooperation fostered by thealliance have been about more than justcollective defense. The Atlantic Allianceis not only a tool to deploy power, butalso a "zone of peace" that rests on ashared political identity and anchors theinternational system. As such, the BushAdministration's view that alliancesshould give way to "coalitions of the will-ing" is to diminish the deeper logic ofAmerica's postwar approach to interna-tional order. There will certainly be cir-cumstances when the mission shoulddetermine the coalition, but consensuswithin the Atlantic community andpreservation of that community should befundamental American objectives.

Finally, liberal realists appreciate thatextensive international cooperation isessential to countering the threats andcapitalizing on the opportunities that liebefore the United States. Contemporarynational security threats render go-it-alone strategies obsolete. The loomingdangers of today and tomorrow, such astransnational terrorism and the prolifera-tion of WMD, can be effectively counteredonly through extensive forms of coopera-tion. The use of force may be a necessarytool on occasion, but the longer-termagenda for coping with terrorism andweapons proliferation entails intelligencegathering and sharing, law enforcement,state building and multilateral sanctions.

Multilateralism is not an end in itselfand is not always appropriate, but it is key

to the attainment of America's globalinterests. The guiding rule of thumb forWashington should be: "with otherswhenever possible, alone only when nec-essary."

The Importance of Legitimacy

THE legitimacy of America asa global power rests on theability of the United States to

command the respect of other countries.When others see the United States as aforce for good in the world—exercisingpower according to widely embracedprinciples and norms—America enjoysinternational legitimacy. American legiti-macy arises from the country's ability toconvince others that it pursues collectiveinterests, not just national ones, that itsactions are justified and justifiable, andthat it is a progressive force in historyand a model for others. Legitimacy mat-ters because it is the "social capital" ofthe international system, the normativeconsensus that binds states together andgenerates the trust and respect neededto tame anarchy and enable cooperationto fiourish.

The Bush Administration, guided byfour convictions, has been consistently dis-missive of considerations of internationallegitimacy. First, it rejects the notion of"international community" and discountsthe relevance of communal norms andlegitimacy in shaping international politics.Because the Bush team resides in a worldin which the international system isdefined by the logic of the balance ofpower, it concentrates on deploying ratherthan legitimating power, overlooking theimportant effects of legitimacy on howothers react to American leadership.

a full explication of this argument, see G.John Ikenberry, After Victory: Institutions,Strategic Restraint, and the Rebuilding of OrderAfter Major War (Princeton, NJ: PrincetonUniversity Press, 2001).

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According to a February 23, 2003, articlein the New York Times, as Bush preparedfor the Iraq War, he responded to over-whelming popular opposition abroad bystating that he did not intend "to decidepolicy based upon a focus group." To actagainst the court of world opinion, howev-er, is not just to ignore a "focus group." Itis to jeopardize America's ability to com-mand respect abroad.

To its credit, the Bush Administrationdid try to garner international supportfor invading Iraq, making its case to theUN Security Council in September 2002.But it went to the UN to get a blessingfor war—rather than engage in a goodfaith effort to find a mutually acceptablesolution. More generally, the BushAdministration has been more eager tosend a signal that America will steadfastlypursue its own interests than to reaffirmits commitment to international rules andnorms.

Second, the Bush Administrationbeheves that legitimacy begins and ends athome. It emerges from the consent ofU.S. citizens and their representativeinstitutions, making it inappropriate forthe opinions of others to impinge onAmerica's own will. Prominent adminis-tration officials have repeatedly embracedthis truncated notion of legitimacy whenarguing that the United States need notseek the consent of other countries beforeacting. In remarks delivered to theFederalist Society in November 2003,Undersecretary of State John Bolton con-tended,

the question of legitimacy is frequently raisedas a veiled attempt to restrain American dis-cretion in undertaking unilateral action. . . .Our actions, taken consistently withConstitutional principles, require no separate,external validation to make them legitimate.

Third, the Bush Administrationembraces a brand of American excepdon-alism that places excessive confidence in

the nobility and righteousness ofAmerican action. As a result, differingopinions, regardless of their merit, areoften disregarded. Prior to the Iraq War,France and Germany were making whatproved to be exceedingly accurate argu-ments about the consequences of war—but Washington dismissed them out ofhand as duplicitous, intended only to tripup U.S. diplomacy. Likewise, excessiveconfidence in the global appeal of theAmerican way contributed to the adminis-tration's naive assumption that U.S. troopswould be greeted with glee by the Iraqipeople. Indeed, the administration's failureto grasp the importance of legitimacy inpolitical life is at the heart of why theoccupation of Iraq has been so troubled.

Finally, the Bush team believes that tobe overly concerned with the opinion ofother states is a dangerous sign of weak-ness. Simply put, legitimacy is for wimps.America must be willing to use its powerassertively to advance its own interests.Administration supporters endorsed thewar in Iraq in part to restore a healthyfear of American power. In a March 23,2003, op-ed in USA Today, Max Bootargued that the invasions of Afghanistanand Iraq "provided a vital boost for U.S.security, not only by routing the terroristnetwork, but also by dispelling the mythof U.S. weakness."

THE BUSH Administration'sdisregard for legitimacy hashad devastating consequences

for America's standing in the world, par-ticularly among Europeans. The countrythat for decades was seen to be at theforefront of progressive change is nowregarded as a threat to the internationalsystem. During the heyday of Americanlegitimacy amid the Cold War, it wouldhave been unthinkable for a Germanchancellor to rescue his bid for re-electionby insisting that Berlin stand up toWashington. Not only did GerhardSchroder do so in 2002, but candidates in

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other countries—Spain, Brazil and SouthKorea—have thrived by distancing them-selves from the United States. In a worldof degraded American legitimacy, othercountries are more reluctant to cooperatewith the United States. Over the longerterm—and in a thousand different ways—countries will take steps to separate them-selves from the United States, to resist itsleadership and to organize their regionsof the world in opposition to Washington.

From the perspective of liberal real-ism, legitimacy is an intrinsic aspect ofpower. To care about legitimacy is not tocede American power to the UN or anyother party. Instead, it is to exerciseAmerican power in a manner that contin-ues to attract the support of others.Successive American presidents havefound ways to do so because they realizedthat to legitimate American power was toturn coercion and domination intoauthority and consent. In Jean-JacquesRousseau's famous formulation from TheSocial Contract: "The strongest is neverstrong enough to be always master, unlesshe transforms strength into right andobedience into duty."

Given the damage done to Americanlegitimacy, a new administration needs toundertake urgent steps to repair its socialand political capital abroad. Bold and visi-ble gestures will be required. Washingtonprovoked considerable ill will abroad byturning its back on the Kyoto Protocol; itshould now pursue a follow-up initiativeand commit to its own plan for reducingthe emission of greenhouse gases. TheUnited States should take the lead inreforming the UN. This initiative mayentail reorganization of the UN SecurityCouncil and the earmarking of multina-tional military forces for UN-mandatedpeacekeeping operations. The UnitedStates should also enter into talks with itssecurity partners to develop a commonstrategic vision about emerging securitythreats and the preventive use of force.Finally, the United States should make a

dramatic initiative to repair the AtlanticAlliance. This effort might initially entaila revised Atlantic Charter, followed bynew institutional commitments to consul-tations and joint planning.

Deficits, Trade <t the Global Economy

D URING the last half century,American leadership of theworld economy contributed

to international stability, with successivepostwar presidents generally adhering tothe multilateral rules and institutions offree trade. This approach was predicatedon the joint gains offered by open mar-kets as well as the behef that economicinterdependence would promote integra-tion and counter nationalist rivalry. Whilethe Bush Administration has articulatedits support for these principles, in realityit has backed away from multilateral lead-ership of the world economy in severalimportant respects. Writing in the Springissue of The International Economy, theHarvard economist Jeffrey Frankelargued that "President Bush turned pro-tectionist more strongly than any otherpostwar president", imposing tariffs onsteel and lumber products, placing quotason Chinese textiles, and increasing agri-cultural subsidies. The steel tariffs wereparticularly harmful because they under-cut political leaders in South Korea,Russia, Brazil and the European Unionwho were arguing in favor of free trade.The Bush Administration has also madeinsufficient progress in advancing the cur-rent Doha Round of multilateral tradenegotiations. Its general lack of regard formultilateral agreements has reinforcedthe perception abroad that the UnitedStates has waning enthusiasm for a rule-based system of open markets.

The Bush Administration has alsorefused to make hard fiscal choices. Ithas pushed into law sweeping tax cutswhile ramping up government spendingand embarking on a massive military

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buildup, resulting in the largest fiscal andcurrent account deficits in American his-tory. An expected surplus of $5 trillionover the next decade has turned into anexpected deficit of $5 trillion. This fail-ure to maintain fiscal discipHne compro-mises the long-term health of the nation-al economy by putting pressure on inter-est rates and cutting into future growth,and it exacerbates . Wierica's position as adebtor nation. The trade imbalance hascontributed to the soaring currentaccount deficit, leaving the United Statesever more dependent on imports of capi-tal, especially from Japan and China.America's twin-deficits are creatingimbalances that imperil the nation'seconomy, leave the United States vulner-able to unforeseen changes in capitalfiows, and compromise its ability to pro-vide international economic leadership.

Finally, the United States remainsdangerously dependent on Middle Eastoil, the cost of which has soared recently.The Bush Administration's main responsehas been to increase exploitation ofdomestic oil reserves, deepening ratherthan limiting reliance on fossil fuels.

The global economy may remain onan even keel, but in the absence of strongAmerican leadership to maintain stabilityand openness, the system is far more vul-nerable to financial crisis and protection-ism. Furthermore, it is imprudent to runup such high levels of foreign debt,putting too much of America's economicfuture in the hands of others.

ADEMOCRATIC foreign poli-cy would entail commitment tofree trade in practice and not

just in name, coupled widi domestic mea-sures to soften the impact of globalizationon the American worker and to includelabor and environmental standards intrade agreements. It is worth remember-ing that behind the post-World War IIdecision to construct a free-trade systemwas a commitment to providing a social

safety net at home. Unemployment insur-ance, worker retraining, and other govern-ment provisions of support remain essen-tial for advanced democratic societies tooperate in an open global economy.

The United States must return to thefiscal discipline of the Clinton years. IfAmerica needs new expenditures to com-bat terrorism, then the country must paythe bill. Whether one supported oropposed the Iraq War, it is profoundlyirresponsible to put the costs on a nation-al credit card, leaving the charges tofuture generations. Although runningdeficits does represent a sound short-termstrategy for stimulating growth, theReagan era made clear the long-termdownside of mixing tax cuts with spend-ing increases. In contrast, the record ofthe 1990s demonstrates that sound fiscalpolicies represent the best path to long-term growth. In addition, bringing downthe deficit in the medium term and othersigns of fiscal responsibility make it muchmore likely that the United States willremain an attractive market for foreigninvestment.

The United States also needs todecrease dependence on Middle East oil.This historic commitment should be builton two main initiatives. First, Washingtonshould seek reductions in domestic oilconsumption, primarily by substantiallyraising the fuel efficiency of automobiles.Second, the public and private sectorsshould team up to develop alternativeenergy sources, limiting America's geopo-litical exposure in the Middle East, hedg-ing against the economic risks of high oilprices, and investing in the well-being ofthe global environment.

Reclaiming Leadership

THE EVOLUTION of theinternational system hasreached a critical intersection.

Absent the hberal brand of U.S. interna-tionalism around which the post-World

48- .The National Interest—Fall 2004-

War II order took shape, that order iscurrently at risk. The preservation of anAtlantic zone of stable peace—the estab-lishment of which is perhaps the greatestachievement of the 20" ^ century—is inquestion, with balance-of-power dynam-ics returning to relations between theUnited States and Europe. The institu-tional infrastructure central to managingthe international system is eroding.Perhaps most worrisome, the UnitedStates, the nation whose dominatingpower makes it indispensable to thepreservation of international stability, hascompromised its legitimacy in the eyes ofthe world.

The unpredictable march of history—in particular, the end of the Cold War andthe attacks of 9/11—is in part responsible

for this worrisome state of affairs, but soare the policy choices of the BushAdministration. Reclaiming liberal real-ism in the United States requires not justelected leadership intent on doing so. Italso requires the rejuvenation of thebipartisan coalition behind liberal inter-nationalism that was forged by PresidentFranklin Roosevelt during World War 11and sustained by successive administra-tions through the 1990s. ModerateDemocrats and Republicans must againcome together to enable America toembrace the centrist brand of globalengagement that served the nation andthe world so well over the course of thelast five decades. If the Democrats are torepair a divided world, they must begin byrepairing a divided nation, a

.The Albright Doctrine Revisited.

[Ijf we have to use force, it is because we are America; we are

the indispensable nation. We stand tall and we see farther

than other countries into the future, and we see the danger

here to all of us. I know that the American men and women

in uniform are always prepared to sacrifice for freedom,

democracy and the American way of life.

—Madeleine Albright, The Today Show, NBC, February 19, 1998

-Liberal Realism. .49