On the Minds of Nations

What are nations? Now there's a big question.

They are territorial yet their laws of domicile can cover assets far away from their homelands whether as informal or formal empire. They are certainly not the possessions of their peoples in any meaningful way despite the elaborate liberal theory claiming otherwise.

Can a nation have a mind? Nothing can have a mind existentially except an individual person (unless you are a believer in some world-soul), yet nations behave as if they have personalities or minds of their own. They appear to have essentialised existence after the fact.

Nations raise major philosophical questions about our own humanity. How can a single person or a committee of persons, elected or in power through a coup or by chance, become the epicentre of the destinies of millions - and, in great wars, hundreds of millions?

How was it that Napoleon Bonaparte could so manage his society that he could leave Poland with 690,000 men in 1812 and return with only 93,000 yet see not one assassination attempt or coup from the relations of his apparently willing victims?

It seems that we can be managed into a lemming-like state with surprising ease.

Whatever the answers, national societies, almost all of either dynastic origin (essentially the war band) or outgrowths of party-led liberation struggles against the heirs of war bands, seem to have developed 'social personalities' and something close to an organic life cycle.

National defence and security policies appear to follow the patterns of behaviour of persons in a Hobbesian universe. Every state at any time appears to be somewhere on the following continuum, each phase shading into the next ...

• the expansion of the war band into a vacuum - or rather an apparent vacuum created by the differential in technologies between a predator and the predated, with the only difference between imperialisms being whether the predation is for profit (dynastic) or ideological (liberatory)
• the settling of interstitiary vacuums between rival powers of equivalent or near-equivalent strength - this is the boundary-setting and soft power competition in a multi-power world that seems to be taking place today
• the defence of integrity, with varying degrees of fear that stronger powers might decide to become a nouveau war band (as national socialism decided to do quite consciously), instead of looking elsewhere and in other ways for profit and influence (assuming such options are available)

Although we might like to fantasise about world government and about noble democracies maintaining peace in our time, the reality is that even the most open democracies behave somewhere along this continuum in ways that are less than altruistic.

If anything, because of the need to justify their position to themselves (another 'human' trait), a hybridisation of inherited dynastic self interest and of the export of values in the Western democracies muddies the water further.

Internal contradictions will always create more heat than light in internal foreign policy debate about the precise nature of the national interest. That is why Gordon Brown appears terrified of admitting the truth about energy and strategic interests in relation to Libya and falls back on the 'war on terror' chestnut.

This is all being raised because we (TPPR) tend to take a hyper-realist view of international relations, one that emphasises that there is little new under the sun and that the primal drives of nations, like persons, are only thinly veneered by reason.

Wherever we look, we see 'histories' that are redacted to maintain cohesion and inconvenient interpretations or alternative explanations of the past and of others' pasts being edited out, much as personal memories are self-edited in order to construct personality.

Wherever we look, we see, regardless of the huge diversity of individual personalities within nations, the observable fact of a 'national character', predispositions and attitudes that are not imposed by elites on people but appear to be shared by both elites and people in a dialectic of mutual myth creation.

Mircea Eliade was a pioneer in bringing to our attention how myth was not something Greeks did but something that is omni-present in our own contemporary narratives. The interplay between past, emotion, reason, convention and obligations or guilt are present in nations as in persons.

It might even be argued that new mythic personalities have emerged for trans-national ideologies that compete within nations for control of nations and that nations themselves are constantly struggling to 'square' contradictory mythic personalities internally in order to maintain their cohesion.

International relations might also be considered analogous to relations between persons. Persons can be rational in pursuing their interests externally but the interests themselves (or 'constructed personality') are not necessarily wholly rational.

We reject, however, the idea of the psychotic State (the liberal myth of Nazi Germany) because a psychotic State would not be able to hold its own personality together. Somalia may be psychotic, interwar Germany was not - it was deeply neurotic.

But we do retain the notion of the neurotic State, the functioning State that is still highly disturbed and capable of causing friction and even a fist fight with its neighbours - or blundering into slighting the fragile ego of another State so that it throws a punch.

All this sounds like conservative pessimism but there is no reason to believe that we are doomed to centuries of Napoleonic egos leading sheep to slaughter.

As in 'real life' (international affairs has an air of fantasy sometimes little different from tales of Narnia or of Middle Earth), bad behaviour can be contained.

In 'real life', we have a police force (or a strong headteacher or parents), or we have a culture of constraint and restraint from birth or we learn to be less neurotic over time through experience, will or therapy. To some liberals, our police force might be world government or a truly dominant hegemon.

The problem here is one liberals refuse to face. Whether world government or hegemon, this single 'State' would still have a personality of sorts, would still be the creature of its history and the mythic presumptions of its constituents and would not be the rational actor of progressive fantasy.

Moreover, neither of the two great hegemons of the last two hundred years (the Pax Britannica from 1815 to 1914 or the US informal imperium which subsisted briefly over the two decades after the fall of the Soviet Union) have evidenced anything other than self interest and self regard as to values.

Like Rome, they merely expanded to fill a vacuum and they were forced to retreat when their values and claims were resisted by equal and countervailing forces and when the costs of filling the vacuum proved greater than the benefits.

On the other hand, the model of a culture of constraint that accept the neurotics and psychopaths in our midst and works around them, calling in the police only when necessary, was the ideal of the failed League of Nations and the failing United Nations.

It depends on everyone knowing the rules, everyone abiding by the rules and effective police power being in place when the rules are broken. This consensus is breaking down within liberal democracies so there is every reason to believe the situation is no better at a global level.

Unfortunately, the 'real world' analogy for our current international legal framework is village policing in the eighteenth century. The global village is run by the squire and parson with one rule for them and another for the local peasants.

Given that (to extend the analogy) the squire's sons are partial to seducing or even raping the village girls occasionally, an international system like this is doomed to create resentment and resistance.

A third way of dealing with the situation is the analogically personal - that each person/nation becomes emotionally stable in themselves, compassionate towards others but realistic about the need to retain their own reserve power when faced by others less stable and less giving.

You might call this benign nationalism, integral, non-interfering elsewhere, concentrating on economic strength and security yet supportive of any measures that remove the anarchy 'out there' within its means.

Unfortunately, many persons 'out there' have the illusion that they are emotionally stable when they are not. This lack of self-knowledge also applies to the complacent faux-democracies of the West.

If nations have minds and personalities and there is little that we as individuals can do except our bit in rewiring a few of the national neurones in competition with millions of others, where should we direct that tiny bit of energy?

Free-for-all Hobbesian international affairs, like the market, works but at immense cost. Like punctuated equilibrium in evolution, long periods of peace and trade get interrupted by horrible episodes of limbic breakdown, like the Thirty Years War or the horrors of China between 1911 and 1949 and beyond.

If we want to live like that, fine, but progressive dreams of 'world government' are no solution. In the end, without other reforms, it will become an 'authoritarian personality' that begs for its own revolt and resistance. Its eventual collapse will mean that we are back where we started.

If we want better, then there are only two ways forward. The first is the radical reform of the United Nations so that it is no longer the vehicle of the squire and the parson but acts in a more limited way than it has been doing to provide basic rule of law and justice for the peasants (the weak nations).

Second, and equally important, national personalities have to be recognised and encouraged to develop in ways that are far less dynastic, far less ideological and far more attuned to the actual life needs of the general population.

I suppose we are saying that, in order to preclude another case where 690,000 men (and women) are directed into some snowy waste and then only 93,000 return, foreign and security policy needs to be taken out of the hands of dynastic successor politicians such as Presidents and be democratised.

If liberals want to avoid the conservative pessimism of our realpolitik analysis, then they need to stop flaffing around with grand visions and get down to basics:

• a more limited in scope but stronger, fairer and more independent UN with teeth and
• the radical democratisation of their own bourgeois democracies before they interfere in the affairs of less developed states.

Strong stable and responsive democracies prepared to concede some of their own interest to the international rule of law - now that's the basis for peace and security!

This is not perhaps what the functional heirs to Sceaf of the Angles or Ascaric of the Franks want to hear but, hey, a mature personality eventually grows up and put away the toy guns and childhood gangs and so should nations. 

Evaluating Obama's Cairo Speech

Obama’s Cairo Speech was well received. The consensus in Europe was that fine words were not quite the same as actions. The careful wording indicated no major breakthroughs. 

This was a consolidation of recent policy shifts in an attempt to build a pro-US coalition of interests within the Arab and Muslim worlds. As we expected, the President positively played up his personal connections to Islam and to Africa.

Altogether though, this speech may not have been epoch-making but it will be regarded as of great historical importance.

A Guide to US Foreign Policy

The sentiments of the US President were widely appreciated in the ‘official’ Arab world (a ‘new beginning in US-Muslim relations’, opposition to negative stereotyping of Islam, a personal commitment to the two state solution, acknowledgement of past US errors in the region, call for joint action against extremism).

Iraq has now been positioned as history. There was not an apology for Iraq but an acceptance that it was a blunder that the US had learned from.

The attack on stereotyping provided a key message but with an assertion, in effect, that the US was a ‘good thing’ – not just self-interested but a source of global progress. It remains to be seen just how credible this positioning (which harks back to Truman and Kennedy) is in practice.

It is worth noting which seven areas of tension between the ‘cultures’ Obama highlighted because this gives us some idea of US priorities for the next two to three years:-

• There was the continued fight against violent extremism, positioning the war in Afghanistan as existential but asserting that hearts and minds were as important, if not more important, than military means of resolution’. Roula Khalaf in the Financial Times noted that the word ‘terrorism’ appeared to have been banned. The confrontational tone of the Bush years has finally disappeared.
• There was the standard line on the Peace Process, with a somewhat weak position on the settlements, which contained nothing new. However, the personal assertion of a commitment to the Peace Process is important even if many Americans might groan at the thought of their President being bogged down in overseas squabbles between intractable peoples during the most important national economic adjustment since the 1940s.
• There was the standard line on Iranian nuclear ambitions, albeit with confirmation of the softer tone in the run-up to Iranian Presidential elections where the US would dearly like to see Moussavi as the man they would deal with in future. It is hard not to see his Iranian comments as directed at young reformers, encouraging them to believe that they can oust Ahmedinejad in the coming days.
• There was a reassertion of democratic values (much stronger than expected) and of rule by consent but this was offset by a policy of state non-interference so that we can expect exhortation rather than criticism of allies.
• There was a continued ideological commitment to female equality but with a rather pragmatic tinge, adopting support for female literacy programmes that we may expect to be backed by both US and Saudi funds.
• There was a call for more tolerance of religious diversity which may presage attempts by the Saudis to give more leeway for the other Abrahamanic faiths within the Kingdom in due course. This was also a useful message for the Catholic Church and for the beleaguered minority of Christians who have been drifting to radicalisms and despairs of their own.
• And, last but not least, there was the reference to improved economic conditions – which merely states once again the real driving force for American foreign policy in any arena, the opening up of markets to build shared wealth for stability and trade (at least as Americans see things).

Regional Reactions

If the Obama speech was aligned with anyone in the region, it was with the Saudis – a remarkable turn-around in US-Saudi relations since the dark days of 2001. The visit of Obama to Riyadh in advance of Cairo soothed any possible slight to ‘amour propre’.

The eventual message fitted in perfectly with dynastic concerns and interests and both Saudis and Egyptians, old rivals, are being brought into alignment on a strategy of defensive engagement with dissent.

Western liberals committed to the region also liked it although we should always be wary of the term liberal in an Arab context.

Many reformers are, in fact, conservatives by European standards whose prime concern is the struggle for modernisation within existing elites rather than with empowering the majority whom they often fear as an uneducated mob.

Obama’s vision, to them, is a beautiful one, as it is intended to be, but few really believe that the expectations that it has raised can be easily delivered. Conversely, the Israelis were deeply unhappy.

Street reactions confirmed a tendency for Israelis to start considering it time to resist what some felt to be a near-colonial status (an irony in view of the view of opponents’ views that Israel was the tail that wagged the US dog). The official reaction was, however, muted but not oppositional.

Domestic Reactions

As for US reactions, the powerful Israeli lobby appeared stunned into relative silence. Obama’s Muslim greeting (a significant theatrical coup) and the ‘I feel your pain’ approach to the Palestinians changed radically the rhetorical terms of trade in domestic politics.

This clearly needs thinking through by Jewish strategists. The rhetoric of ‘Islamo-fascism’ now looks extremist, cultist, at best partisan, and Obama is now so secure as statesman that an Israel lobby direct attack on him could be deeply counter-productive.

The Republicans will set themselves to oppose Obama but this gives the Israeli lobby a serious internal difficulty because many Jews are liberal and otherwise inclined to Obama’s position on domestic matters.

A strong pro-Israel position also upsets the increasingly dissident and noisy if small right-wing populist and libertarian elements in the Republican Party as well as Arab-American and Muslim-American voters.

What many missed was a reference that could be implied to suggest that Israel’s nuclear capability was part of the problem and not part of the solution. The reference was understated but the global drive towards arms limitation and even elimination is a bigger story.

Israel’s nuclear weaponry has now been placed in the pot. If it is not careful, Israel might be placed in the same category as North Korea one day if events out-run the Israeli ability to adjust or resist.

This was a rhetorical triumph that built a coherent US foreign policy in the region. There is no excuse for anyone not to understand and respond to it.

The calculation now, in each regional country, is just how important the slightly weakened US is to them in their own national interest and the degree of compliance they can afford to offer.

From this perspective, the balance of power has shifted against Israel as it is currently positioning itself and towards both conservative Arab allies and reformers in the ‘alien nations’.

www.tppr.co.uk

www.pendrywhite.com

If you want to follow TPPR events and commentary, try http://twitter.com/TimPendry

Re-considering Capitalism

The main topic of conversation in international economic policy circles is 'global stimulus'. In a few weeks, we have the London Summit. The US is getting very irritable that it has pumped billions of dollars into its economy yet few others have matched the scale of its neo-Keynesian commitment.

This is serious stuff because if the rest of the world - most notably Europe and China - do not follow suit, it will be increasingly hard to hold the line within the American political class against 'America First' protectionism-lite.

For the Franco-German led EU and China this may not be quite so disastrous as we may think. Both are theoretically big enough to rely on domestic production and consumption after a painful adjustment but the UK and Japan are island states built on trade - and it is trade that threatens to collapse now.

There is an air of desperation in messages coming out of the Treasury and vectored through the economic liberal media in London. What London and Washington want is improved co-ordination of several countries’ currently highly variable commitments to neo-Keynesian pump-priming.

The Financial Times on March 9th reported a public call by Larry Summers (Obama’s chief economic adviser) for just such a co-ordinated programme that would issue public money on a global scale in order to tip the scales from deflation towards recovery.

The Financial Times & 'The Crisis of Capitalism'

The role of the Financial Times in the current crisis continues to bear some scrutiny. It is independent, of course, but it is also implicated in the ideology that led to the current crisis and it represents the voice of those determined on preserving the Atlantic economic system at all costs.

The newspaper has just started a major series on the future of capitalism with the remarkable implication (from the FT's banner headlines) that we should consider alternatives. No, not an alternative to capitalism, of course, but alternatives within capitalism.

What seems to be going on is a quite subtle and anxious shift back to managerial capitalism and even ‘soft’ corporatism in a pre-emptive strike against any democratic rejection of global market economics. The political implications of ‘another ideological god (that) has failed’ [Martin Wolf] worries its editors.

Driving recovery through state action has now (it would seem) overridden even the structural issue of global imbalances as the central concern of policymakers in order ‘to save the market system from its own excesses’.

The first contribution (by Martin Wolf) in what appears to be a long series of articles sets the scene – in essence, the Reagan-Thatcher project lies in shreds, the role of Government will increase and the era of free-wheeling finance capital has ended.

To anyone with a sense of history, this must be interpreted as a rearguard action to preserve both globalisation and capitalism by shifting power from finance back to managers (where it largely lay in the previous great cycle from the 1930s to the 1970s).

The impending collapse of trade and the need to create a framework for economic growth (in defiance of two possible challengers, neo-nationalism and low growth environmentalism) clearly requires a new if lightly administered corporatism.

Figures for manufacturing output in Q4 2008 tell the real story which is one of industrial capital, and the services sector dependent on it, wanting ‘auctoritas’ to command markets. Only China saw an increase in industrial value-added – collapses in South Korea, Japan and Brazil were devastating at over -30%.

All this has to be seen in the context of the Financial Times’ self-appointed role as ideological guide as world leaders move towards the April 2nd Summit. For a few weeks, it appears to itself as having global historical importance. We should not get over-excited.

The Financial Times is not a government. The UK is only one of several players in the coming game so the FT’s opinion should not be taken as deliberative of how things will happen but only of how the economic elite in the Atlantic economy may want things to happen.

As of today, there is still no agreement on co-ordinated stimulus nor on the framework for government global regulation. There are formidable national political and practical barriers to both.

The Financial Times and the economic liberal elite now want to draw a line under the era of dominance of finance capital (for which they were the claque for thirty years) and create the possibility for changes in market-based globalisation to save itself from itself and continue safe and sound through the next cycle.

The Problem of Democracy

The problem is, bluntly, democracy. The Financial Times’ editorial of March 9th lets the cat out of the bag. Politicians need to be given political cover to do what is necessary – “a united front is, therefore, essential.”

The aim of policy should not be, it suggests, the creation of grand schemes for global regulation or the investigation of ‘minutiae’ such as tax havens and bankers’ pay. It should deal with the fact of recession on the ground.

Politicians will then earn the authority to make the necessary changes in the economic framework for the next cycle. The policy prescriptions are fairly simple – a massive co-ordinated stimulus of course but also state re-capitalisation of the credit system and a significant shift of resources to the IMF.

We can almost see the naked fear in economic liberals’ eyes. Politicians are already engaged in populist campaigns over the symptoms of crisis but this is mere flummery. Similarly, grand schemes are of no intrinsic interest to the electorate.

The liberals' assessment is that globalisation (more than markets) is at threat because, if the recession does not turn into recovery soon, weak pro-capitalist governments will fall and strong capitalist governments will have to become nationalist or populist to survive. This is a race against time.

A massive stimulus will create equally massive burdens on subsequent generations and so must succeed in creating a recovery that helps remove this burden within a reasonable period of time.

The use of voters’ funds to ‘reward’ the bankers who led us into the mess constantly undermines the credibility of government as representative of the people’s interest.

And it is hard to see how any government can now divert resources from emergency welfare and job creation to help save jobs in faraway countries.

Economic liberals in Washington are fighting a rearguard action against political liberals in Congress. London is fighting a rearguard action against European caution and rising anger at home. This is why Gordon Brown's speech to Congress was of such importance. It was a call for Atlantic unity.

Whistling in the Dark

All in all, the Financial Times’ contribution to the debate on capitalism indicates an economic elite, the one that we have termed 'Davos Man' elsewhere, that is a bit frightened, whistling in the dark, deeply worried about the London Summit becoming no more than a talking shop of populist communiqués.

It is terrified that global dithering will remorselessly force the major blocs – NAFTA, the EU, China - into various forms of de facto protectionism. Worse, national capitalisms may discover that they can potter along quite nicely without the levels of global trade fuelled by the global credit boom.

Now this is the point where those who do not like theory should leave but the Financial Times, to its credit, is raising some important issues, albeit from its own ideological perspective, and we need to respond.

We should all consider what sort of world we want in the wake of this crisis because things are not going to return to 'normal' in the sense of what has been normal for the last thirty years. Electorates and businesses need to try and control the agenda or they will see themselves controlled.

When the history books are written, the crisis will probably be put down to group-think amongst the self-interested and to the excessive complexity and opacity of late finance capitalism.

The reassertion of the public interest and of transparency, responsibility, basic competencies and, even more important, comprehensibility and accountability are clearly required. All a bit obvious really …

Editorials in economic liberal media are becoming increasingly shrill in saying that markets are not at fault but that leaders are. This is, in our view, naive. A Board appointed Sir Ken Goodwin within a regulatory and legal structure created by successive governments. His demonisation is a red herring.

If you plant a person in a system, that person will work the system according to the rules laid down by others. The human race is not made up of saints and there is many an ordinary bloke who would have fitted in without malice to the national socialist or communist systems of their day.

The flaw is within human nature. There is nothing alien about this crisis when set against past bouts of Schumpterian creative destruction.

What we have to ask is why our leadership was ignorant of how markets worked and whether it wilfully chose to ignore what it should have known for reasons of self- or special interest. Markets themselves may be the first problem, weak leaders the second and selfish or corrupt individuals only the symptom.

Basically, we seem to have been faced with a stark and unnecessary choice – to accept the boom and bust of markets because people en masse are who they are or to consider restraints on human nature which, at their worst, might lead to the excesses of national and international socialism.

The 'Third Way'

Could there have been a ‘third way’ in which the realities of markets and of human nature might have been squared through good government, managed through moderately sized nation states rather than through trading empires?

This was not to be. The ‘third way’ presented in 1997 to the British electorate was nothing of the kind. Rather it was a council of despair about the ability to find a workable ‘one nation/social democratic’ national consensus within the prevailing 'group think' about markets promoted by economic liberals.

There was a determination within New Labour to try and ride the tiger of globalisation and hope that those economic dimwits who believed that tulips would continue to rise in price eternally might be right.

The point to be made (as the Financial Times ably reminds us today) is that the current crisis is not unique. It is standard fare, only bigger, for how capitalism works in practice – and we appeal in this matter to the pessimistic Schumpeter rather than to the optimistic Marx.

Capitalism is not about concentration and inevitable collapse but progress and innovation through waste and a brutal punctuated equilibrium. What does that sound like? Yes, just like evolutionary biology - a godless process of waste and disaster but also a progression to 'higher' forms of life.

The real cost of markets and of evolution without government intervention in economics and healthcare might be as awful (if we were but to know it) in terms of misery and death as any of the crimes of Stalin.

The point is that our leaders and our media were all surprisingly stupid when ordinary folk might have expected them to have read their economics and history as a condition of their employment.

The Financial Times, whose analyses are often the triumph of hope over experience, does get it right sometimes. The March 10th editorial refers to a ‘mindset that ignored markets’ instability [and] relieved policymakers of responsibility’. Precisely.

Failing to understand markets as managable social forces is as irresponsible as failing to understand natural forces when seeking to irrigate land or to plant crops. Perhaps the current crisis will be to the market what the Lisbon Earthquake was to the eighteenth century belief in a benign God!

There will be market believers who will welcome creative destruction, a periodic cultural Ragnarok, because it will renew and revitalize. At the other extreme, there will be those who want to concrete over human nature because it is messy and prefer the planned car park to the managed green park.

Between these two is where we should be – with a deep respect for the human condition whose wants express themselves through the market and through sexual selection but which accepts intervention to ensure that society remains co-operative and non-exploitative.

Praising the depression that wipes out businesses and jobs because it is innovative is like worshipping the asteroid that hurtles towards us from space because it allows new life forms to develop. That is anti-human.

The real third way is one of a human-scale and a respectful management of both markets and nature. Economic libertarians and deep greens now need to move to one side while the rest of us create some sort of balance in the world.

www.tppr.co.uk

www.pendrywhite.com

Recent Client Notes [Subscription Only]

Global

04.03.09 - Political Strains in Europe from the Right
05.03.09 - Update on the Global Economic Crisis
05.03.09 - Update on West Asia
05.03.09 - The ICC Indictment of Al-Bashir
07.03.09 - Grand Strategy As Obama Rewrites The Rules

Domestic

04.03.09 - Update on UK Conditions
10.03.09 - Update on Uk Conditions