soros

George Soros. THE BUBBLE OF AMERICAN SUPREMACY: CORRECTING THE MISUSE OF AMERICAN POWER. New York: Public Affairs, 2004

ESSAY REVIEW

In George Soros on Globalization, George Soros in 2002 criticized the orthodox globalization doctrine. He objected to a free-market fundamentalism that ignored the necessary building of civil societies and stable democratic governments that follow the rule of law. Without these concomitant developments, he said that laissez-faire economic globalization cannot improve the world. Economic globalization as he saw it in action was leading to more wealth for rich nations and less for poor ones. It was based on the false belief that market forces worldwide, left to their own devices, had the power to stabilize societies and economies.

Globalization so far was "lopsided," Soros said in his 2002 book. (vii) International financial markets were well developed; but international institutions and political arrangements were not.

Soros's solution was a practical brand of idealism. We should build open societies, he argued, in the poor parts of the world through assistance programs such as those he mounted with his own funds and foundations. This should accompany interventions in the global free market system to redirect the excessive flow of wealth to rich nations at the expense of poor ones.

His reflections on globalization went to press just after 9-11 occurred. I said the following in my June 2002 comment on George Soros on Globalization:

Soros is too tactful to say outright that the Bush administration lacks the moral fiber to turn American policy toward open society idealism. Clearly, though, his analysis implies it. This political judgment would seem to be at odds with the (admittedly restrained) hope and optimism with which Soros advances his initial call for an Open Society Alliance around the world. Readers who share Soros's vision can and will be more outspokenly sanguine about the political changes in the US that must precede a definitive turn to open society idealism.

What a difference in Soros’s tone a couple of years of Bush's war on terror have made! He does not worry about tact in his new book. The Bush administration, he finds, remains loyal to free-market fundamentalism worldwide while failing to pursue the open society agenda that he believes must characterize an enlightened globalization agenda. Now, in addition, he finds Bush guilty also of pursuing military fundamentalism . This is the belief that our military power by itself can effect global social and political change.

Soros likens this to the false belief we see in a stock market bubble. During a bubble, investors come to believe that the hot item—technology stocks most recently—is changing the fundamental economic rules. Similarly, in the neocon moment of triumph, America came to believe that our overwhelming military might could change fundamental social and political conditions worldwide. In the Iraq quagmire, we are experiencing the moment of truth that is bursting that false neocon belief.

Soros believes that Bush is the unyielding captive of this belief. Therefore, he has concluded that no change for the better in America's life in the global community can occur before Bush leaves the White House. He announces that he has dedicated himself and his pocketbook to defeating Bush for reelection.

Soros divides his book into two parts. First he takes "a critical view" of the Bush doctrine. Second he offers "a constructive vision" to counteract what he sees as the terrible error of Bush's ways. In his preface he minces no words:

[T]he country is in the process of committing [damaging] mistakes because it is in the hands of a group of extremists whose strong sense of mission is matched only by their false sense of certitude. By abusing the position that the United States occupies in the world, the extremists have made our nation weaker, not stronger. (viii)

Soros accuses the Bush administration of "a crude form of social Darwinism: Life is a struggle for survival, and we must rely mainly on the use of force to survive." (xi) But the "survival of the fittest," he believes, "depends on cooperation as well as competition." (xi) Soros likens the simplistic (fundamentalist) "pursuit of military superiority" to the fundamentalism of free-market globalization. (xi) Both emphasize "competition to the detriment of cooperation." (xi)

John Moe, writing for Amazon.com, said that The Bubble of American Supremacy rehashes arguments expressed by scores of other Bush bashers and adds nothing new. Moe objected that the book dwells too much on Soros's overinflated sense of his own role in the world.

It's true that Soros talks a lot about his ideas and actions. Why not? Soros is unique. He made his billions by having a global vision of the flow of capital. This same all-encompassing vision allowed him to see the limits to laissez-faire globalization; it gave birth to his practical suggestions for balancing rampant capital with the stabilizing structures of civil societies and responsible governments. It motivated him to donate millions of dollars in the effort to improve those structures. It is not an exaggeration to say that George Soros has his own foreign policy program. As Ilene Cooper said in Booklist of the American Library Association, "Soros…is a man who puts his money where his mouth is."

Soros's opposition to Bush’s military policy is a natural extension of his critique of the free-market fundamentalism that drives Bush economic policy. Soros is trying to project a picture of the geo-political situation that we face in the post-9-11 period. He believes that his picture accords more with reality than the good-vs.-evil picture, replete with evangelical Christian overtones, that Bush gives the world. The difference between Soros and Bush is that Soros takes a more nuanced account of the complex dynamics of globalization. We will win out against Islamist terrorists, Soros suggests, if our strategies reflect those dynamics and if we move beyond strategies of state warfare cast in black and white.

Soros is as steadfast as George W. Bush in adhering to his core belief—that globalization's limits as well as its potential for good can be addressed only by an America that sees itself as the leader in a cooperating world community. By refusing to embrace that collaborative role, the Bush administration, Soros thinks, abandoned its basic responsibility in the post-Cold-War world.

Soros’s critique of Bush’s turn to unbridled military muscle in world affairs is problematic but useful. Some critics have not bought Soros’s comparison of it to the boom (bubble) phase of a business cycle. He does seem to force the analogy. Yet, the comparison enables Soros to dramatize what America experienced in the frenzied run-up to the invasion of Iraq. Our representatives in both parties in Washington, with a few exceptions, followed the president's lead. John Kerry is still busy digging out of the political hole that he dug with his yes vote. The mass magazines and TV channels fell into the mood of the war bubble; they largely abandoned critical perspective. My analysis of a particular issue of Newsweek gave a sample of how lacking in critical edge the mass media became while in the mood.

In hindsight, those days of March 2003 indeed had the inflated feel of the dot.com bubble a few years before. Fear of another 9-11 and a desire for dramatic revenge fueled the Iraq bubble, whereas sheer greed fueled the dot.com craze. Despite that difference, conventional caution in both instances melted in the heat of passion to go for it.

Daniel Davidson in the Washington Post sharply criticized Soros's fuzzy understanding of the genesis of the doctrine of natural rights—Soros saw it mainly as a prop for conservativism. Davidson was among those who found the "bubble" metaphor less than helpful. He faulted Soros for advancing debatable propositions as facts and making predictions almost sure to be wrong. Even Davidson, however, gave Soros his due: "…his strength is in grasping the big picture, determining how he can make a difference, and succeeding in improving the world."

Lacking in this book is a satisfactory assessment of al Qaeda and its kindred Islamist terrorists. Also lacking is an acknowledgment of the peculiar power of the unresolved Palestinian dilemma to color everything in the Middle East. Soros assumes that an aggressive worldwide agenda for creating open societies in time will successfully address the economic, social, and political dysfunctions that plague us, including, presumably, al Qaeda’s murderous agenda and the Israeli-Palestinian conflict. This broad vision has the defect of allowing particular passions currently in play to slip under the radar screen.

It is true that we are living through a process of globalization unprecedented in history. It is also true that we in the West now are newly engaged with an Islamic world that carries a complex history within itself as well as with the colonizing West. The abstractions of markets and flows fail to capture the blood-and-bone reality of what we are dealing with when terrorists kill more people on streets around the world. Perhaps Soros will have more to say about terrorists and Palestine in another book.

Finally, as I write, the Bush administration is engaged in a remarkable revision of the military fundamentalism that led it into preemptive combat in Iraq. This revision—“reversal” might be the more accurate word—is made more remarkable by Bush’s omission of any acknowledgment of it. Yet, day by day we see him backing away from neocon fundamentals.

(Just the other day, hawks Richard Perle and James Woolsey had to seek an audience with Condi Rice, national security adviser, to register their vigorous objection to the trashing of Ahmed Chalabi , darling of the neocons and linchpin of their hoped-for post-war Iraqi government. Rice was cordial but non-committal. Such discord would have been unimaginable six months before.)

Bush's revisionism is understandable. He has had to face up to the unexpected persistence of deadly conflict in Iraq. He has had to face up to our inability to implement the grand vision of a democratic Iraq receptive to American long-term strategic military presence on its soil—an alternative to our erstwhile presence in Saudi Arabia. He has had to face up to the failure to utilize the oil of Iraq either to fund post-war rebuilding or to shore up Middle East supplies to the US. He has had to abandon the rationale for invasion based on Saddam’s purported but undiscovered weapons of mass destruction.

So, after manhandling the United Nations, Bush has handed over to it the whole process of choosing the next phase of Iraqi government. After asserting US military dominance over Iraq, he has handed over to factional militias the control of whole sections of the country. Our troops will remain to “help” maintain security, but they will be in a nation that will take back its “full sovereignty.” After promising a democratic, secular government, Bush has endorsed a process that could lead to almost any political outcome.

No one yet knows where these revisions will lead. But they may already be gutting Soros's critique of Bush military fundamentalism. By election day in November 2004, Bush may have co-opted a good part of the program for responsible world leadership advocated by Soros (and Democratic candidate John Kerry). And he may never have acknowledged that he began the war as an out-and-out neocon hawk. If he carries it off and the American public buys it, such a trick would outdo Bill Clinton’s clever theft of the Republican economic agenda leading up to his reelection in 1995.

The trick, however, is not likely to stand. Bush has consistently chosen appearance over substance. The Bush team seems to have an instinctive aversion to the substance of policy and an unwavering concern about its appearance. The expensive photo op on the deck of the aircraft carrier Abraham Lincoln after Saddam’s fall symbolizes this. His tax cuts, his education program, his medical coverage scheme, his Palestinian roadmap—these and other initiatives all have involved smoke and mirrors, just like the rationale for the preemptive invasion of Iraq.

Consequently, Bush probably would not be able to pursue the substance of Soros’s vision of a different American role in the world, even if he really tried. It would take a massive shift in the human and financial resources of the administration. He would have to stab in the back the radical base at the core of his constituency. The base might tolerate smoke and mirrors in the interest of protecting the cause; but it could not tolerate an abandonment of basic beliefs.

So, George Soros probably will feel pressed to carry his fight against Bush up to the very last minute in November.

Note: References to Amazon.com, Booklist, and The Washington Post were obtained from the Amazon.com website coverage of the Soros book.

Summary notes from a close reading of The Bubble of American Supremacy

11 June 2004 Richard P. Richter

summary

George Soros. THE BUBBLE OF AMERICAN SUPREMACY: CORRECTING THE MISUSE OF AMERICAN POWER. New York: Public Affairs, 2004

SUMMARY NOTES FROM A CLOSE READING

PART I: A CRITICAL VIEW

Ch. 1, "The Bush Doctrine." Bush seized 9-11 to turn our foreign policy toward the "supremacist ideology" of the Project for the New American Century, which stressed unilateral American power and underplayed cooperation and multilateralism. This is a "very dangerous direction." (10) Neocons believe that we can "introduce democracy to a country like Iraq by military force"—a "quaint idea" (15) and also very dangerous. Bush is changing not only America's role in the world but "the very character of the country." (15) [I think I would restrain this a bit—Whitman's spirit lives in the nooks and crannies.]

Ch. 2, "The War on Terror." "War is a false and misleading metaphor in the context of combating terrorism," Soros believes (18), but it suited the Bush desire to exercise our military muscle against a visible state enemy like Iraq. Bush has converted Americans from victims of 9-11 terror into perpetrators of terror, a common reversal in modern history, says Soros (e.g., Jews as victims became terrorists against Brits in Palestine). (19-22) This reversal has turned the world against us. (23-24) Soros thinks the American public is unaware that it has changed from victim to perpetrator, but the Bush people "knew what they were doing when they advised President Bush to declare war on terrorism." (25) The "war on terrorism" is like the "war on drugs"—it cannot be won. (26) The terrorist threat allows Bush to foster fear, which just escalates the vicious cycle of violence. (28-9) We need to reexamine the terrorist threat and remove it from the center of our national strategy. First, we should lead "collective action" for peace, economic progress, protecting environment, etc. (30)

[This is the crux of the difference between the PNAC vision and Soros's. They emphasize AMERICAN interests. Soros emphasizes WORLD interests, and believes only the single superpower has the ability to lead others in shaping world political arrangements through cooperation not unilateral competition with everybody else. Both affirm our powerful position and in some ways agree that we must act to bring good politics to the world; but they radically differ in how we should use that position and how we should effect change in the world.]

Ch. 3, "The Bush Administration's Foreign Policy" (31-50) Bush "hijacked" 9-11 in order to identify a new enemy to replace the Soviet Union. Afghanistan was a brilliant military success and a dismal failure to win the peace. (44)

Ch. 4, "The Iraqi Quagmire" (51-65) Bush's motive in attacking Iraq probably was to demonstrate that the US "sets the agenda" not terrorists. (51) Also, maybe Bush wanted to secure new oil sources beyond Saudi Arabia. Also, he wanted to reassure Israel with a military presence in the region and weaken the Palestinian extremists. (53) WMD motive deceived the American public. Failure to plan for the aftermath of invasion was "dismal failure." (60) We're bogged down with no easy way out. (64) Iraq failure now makes it more difficult to undertake peaceful nation building elsewhere. (65)

Ch. 5, "The State of the Union" (66-75) Iraq quagmire keeps us from dealing with problems in Central Asia, South Asia, Africa, Israel, North Korea, Iran. Soros commends the start of an AIDS plan (70) and some progress in pursuing terrorists. (70) But he blames the increase in terrorist threat on the way Bush has framed the war on terrorism. (70) Domestic policies are grim across the board and Soros does not even try to explain the extent of harm done by Bush. (71-74) The election should be a referendum on "the reckless pursuit of American supremacy" and the danger this has created for the US and the world. (74-5) We need to reject Bush and install a better vision.

[I read recently that Bush develops policy by discerning what his base constituents want—the religious right, big corporations, and neocons in foreign policy (Ilene Cooper reviewing Soros's book in Booklist of the American Library Association). Then ex post facto he decides on reasons for adopting these policies. This process lies at the heart of why his general direction of the nation is so focused and so wrong. He misses the generous and inclusive heart of America. People on the religious right talk about heart but only their kind of heart—if you are not with them you are against them. There is an exclusionist motive to the religious right, which goes hand in hand with its evangelical motive: to get square with us, get square with God our way. As long as Americans are diverse, the religious right will have a sense of something wrong with America. The closer we come to solidarity on Christian fundamentalism, the closer it will come to a feeling of completing the American dream. Diverse beliefs are an affront to their dream. By contrast, diverse beliefs, affirmed within a rule of law that protects individual rights, are the essence of the liberal American tradition.]

PART II: A CONSTRUCTIVE VISION

Ch. 6, "Improving the World Order" Our dominant position on globalization and military power "imposes a unique responsibility on us" to pursue the "well-being of the rest of the world." This serves us as well as them. (79) The US must work to "protect the common interest in a world consisting of sovereign states that habitually put their own interests ahead of the common interest." (80-81) We must do this by working for a "multilateral system in which all states submit to the same rules and participate in the same arrangements." (81) Bush fundamentally disagrees with this approach, since he puts power above law. He must go. (82)

The Global Capitalist System. Soros describes the rise of globalization after 1980 (Thatcher-Reagan), when financial flows became free within the framework of "international financial and trade institutions." (97) The problem with globalization is that while markets are global, politics remain grounded in sovereign states. (92-3) "Collective needs and social justice" get short shrift as a result. (93) Globalization creates more wealth for wealthy and less for the poor—inequality. (94) Central globalizing countries like US get "too many advantages over countries at the periphery." (95) Financial markets tend toward disequilibrium and are prone to crisis. (95) Corrupt governments vs. good governments get little advantage from globalization. (96-7) Soros's proposals for international assistance in Soros on Globalization were intended to combat these disparities. (97-8) But the policies of Bush have forced him to broaden his scope to take in political and security domains as well as market issues. (98) He now feels the need to concentrate on the role of states, especially the US, because it has so much power to shape events.

Ch. 7, "Sovereignty and Intervention" (100-125) With political power continuing to reside in sovereign states while economic power is globalized, the world community must decide how to "intervene in the internal affairs of sovereign states and, second, how to ensure that the intervention serves the common [as opposed to any national] interest." (101) "Foreign aid and other forms of assistance" provide "constructive intervention" where states are willing to accept voluntary aid. (101) But intervention into repressive states that reject voluntary aid must be undertaken on the principle that sovereignty derives from the people, not from governments that have arrogated it to themselves. (102) "International intervention is often the only lifeline available to the oppressed." (102) [This almost sounds like the Bush doctrine of preemption. But Soros is arguing that intervention should be genuinely "international" and should not take on the appearance of unilateral action by the only superpower.]

Soros looks to the UN's statement of principles on "the responsibility to protect" (including principles for military intervention) that a sovereign state must uphold. (104) The US violated these principles when it went into Iraq without a second UN resolution. Prevention of conflict is the keystone of the responsibility to protect. (105) It "cannot start early enough." (109) The 2000 Warsaw Declaration expresses the correct doctrine that all democratic countries have an interest in fostering democracy in all other countries. (112)

We need to foster democracy not primarily because of terrorism but because it will foster peace, environmental protection, social justice, and global market mechanisms. The latter are unable in themselves to provide such public goods, though they efficiently allocate resources among competing private needs. (114)

The UN is flawed, partly because it is an organization of sovereign states into whose internal affairs it dare not interfere. But we should cooperate in its programs rather than undermining them. In addition, for a new basis of legitimacy, the US should cooperate with other nations to give substance to "The Community of Democracies" established by the Warsaw Declaration. (118) It could become a bloc for good within the UN. (119) We should also vigorously promote cooperation through regional security organizations such as OAS. (120) No such cooperative efforts will come about until Bush is removed from office. (121)

An alternative US foreign policy would be multilateral rather than unilateral. (123)   We would undertake "preventive actions of a constructive nature" in place of military actions. (123) An alternative policy would cost less and allow us to address domestic needs. (123-4)

Ch. 8, "International Assistance" (126-145) Soros reviews the deficiencies of traditional intergovernmental foreign aid. (127-130) But he insists that foreign aid has been helpful and can be even more so if its defects could be overcome. He believes his foundations have overcome them because they are run by citizens of recipient countries and pursue objectives of the recipients not the donors. (131) His personal experience in international philanthropy had no orderly plan but produced results because it avoided the deficiencies of traditional aid. (137) Based on his experience and other research, Soros recommends a new approach emphasizing local "'ownership'" of programs, specific targets, greater accountability, and measurable results." (137) He favors "task forces" for individual countries created among democratic countries agreeing with the Warsaw Declaration. (138) Soros endorses the new Millennium Challenge Account, which the Bush administration created. (139-140). But it is unilateral and cannot tackle the hard cases of repressive and corrupt governments. (142)

Soros would use "the principle of the people's sovereignty" to enter repressive and corrupt states. This justifies reaching around governments to their civil societies and lodging ownership of aid there. (142-143)

Ch. 9, "People's Sovereignty and Natural Resources" (146-155) Less developed countries with natural resources often suffer a "resource curse" because the resources, though belonging to the people, are exploited by rulers. They create negative development through civil wars, corruption, etc. (146-149) These problems contradict market fundamentalists' contention that "allowing people to pursue their self-interest leads to equilibrium and the optimum allocation of resources." (150) Development traps call for outside assistance to enable an escape. (150-151) A "Publish What You Pay" campaign, launched by Global Witness and other organizations, is forcing "natural-resource companies to disclose their payments to developing countries." (151) This transparency forces rulers to be accountable for what they are reaping.

Ch. 10, "Historical Perspective" (156-175) Enlightened self-interest requires the US to lead "cooperative efforts at improving the prevailing world order." (156) [Bush's advocacy of democracy for Iraq also aims at improving the prevailing world order and in that goal Soros and Bush are in accord. As the failures of occupation in Iraq have pushed Bush toward belated cooperative efforts with the UN, NATO, and other international organizations, he has been moving toward Soros's doctrine of cooperation. That is, he is moving away from the original neocon position of unilateral freedom to act, with an emphasis on military muscle.]

Soros views our position in the Cold War as support for the principles of open societies and, secondarily, as support for capitalism as opposed to communism. Soros discovered that neocons adopted the idea of natural rights, which justified the imposition of obligations and limits to choice favored by conservatives. (160)   The idea of natural rights contrasts to the idea of open societies, just as idealism (exemplified by the idea of open societies) contrasts to "geopolitical realism" [Charles Krauthammer's neocon position]. (160)

When the end of the Cold War deprived the US of its clear-cut antagonist against open societies (and capitalism), we lost our clarity of purpose. US needs to recover its identity by becoming "the leader of a community of democracies," building partnerships and abiding by international rules. (167-168) The Bush administration contradicts this posture with its "crude form of social Darwinism: the survival of the fittest as determined by competition, not cooperation." (168)

Soros advances "the postulate of radical fallibility": ALL political constructs, including free enterprise ("market fundamentalism" in Soros's words) "are flawed one way or another." (168)   Liberals lost coherence after the Thatcher-Reagan revolution of 1980. They can recapture it by acknowledging the postulate of radical fallibility and modifying market fundamentalism with the vision of open societies actively pursued. (170) The 1997 Project for the New American Century offered a contrasting agenda, which called for the spread of democracy by military might. (171) PNAC thus delegitimized the role of leader of the world that Soros endorses. The PNAC approach fails to mobilize support from the rest of the world for American leadership. (172)

The US should combat the real terrorist threat through a policy of "collective security" not by American unilateral supremacy. (173)

Ch. 11, "The Bubble of American Supremacy" (176-188) Our present situation is like a stock market bubble in that, while based on reality, it reflects a fatal misconception. "There is an inherent discrepancy between what people think and the actual state of affairs." (177) When "the gap between reality and its false interpretation becomes unsustainable, the bubble bursts." (178)

Because of the bubble, Bush believed the neocon version of reality in which unilateral military might could change the world. He responded to 9-11 the way bin Laden wanted him to react, with massive military response in the Islamic region. (181)

Soros links the "bubble" ideology of market fundamentalism with the religious fundamentalism of Bush. (184)

The social Darwinist ideology was reinforced first by the success of globalization, then by the collapse of the Soviet system. It is only with the election of George W. Bush that the pragmatism of geopolitical realists yielded to the revolutionary zeal of the advocates of American supremacy, and it is only after September 11 that the supremacists gained the upper hand. (184)

In a bubble, participants do not see the gap. When they see it in a moment of truth, they reverse course and cause great damage to the market.   Iraq is the moment of truth. Public now is seeing that Bush took us there on false pretenses. The PNAC bubble has burst. (186) But bin Laden's bubble is still inflated. Our best course is to reverse course and pursue Soros's open societies agenda. This has a chance of controlling the damage to our international standing. (188)

"Epilogue" "We must repudiate the Bush doctrine and adopt a more enlightened vision of America's role in the world." (190)

11 June 2004 Richard P. Richter