Domestic Incapacitation and Foreign Policymaking

Many stock market analysts wonder whether another major “correction” (read: a big decline) is imminent. I wonder whether the same isn’t in store for the world’s diplomats.

We live in a time when, thankfully, even top senior U.S. diplomats ruminate about the importance of restoring the domestic sources of their nation’s foreign policy. And they profess wanting to find ways to leverage their nation’s comparative advantage in the economic sphere (and elsewhere) for the benefit of its diplomacy.

What becomes clear, given such reflections, is that the United States has lost much of its natural appeal on the global stage. That is not a new trend. In fact, it took full force during the George W. Bush presidency and its ill-fated invasion of Iraq.

But back then, the rest of the global community was in much better spirits. The Europeans certainly felt they were building something in the euro that would function as a tool to integrate the continent. Or so they thought.

The Chinese, meanwhile, were running from one annual, double-digit GDP boost to another. They began to feel that the sky was the limit of what they could accomplish. Their economic vigor dynamized much of the rest of Asia.

Latin America was shedding the yoke of decades and, in some cases, centuries of authoritarianism. It also basked in the glory of, for once, not being the one whose debts had to be rescheduled.

Even on truly vexing issues, such as climate change, many policy makers and representatives of NGOs were quite optimistic. They believed a new era was upon us. The world’s powers — finally wised up and (almost) enlightened — would come to do the right thing for the long-term good, even if it was painful in the short run.

Alas, it was not to be. In Europe, fear of “contagion” is currently taking on a new meaning. No longer is this a just term of art referring to the inclination of financial markets to see economic weakness spread from one country to the next.

The first round of the French presidential elections betrayed a deep sense of unease in that country’s electorate, with a significant shift to the nationalist right. Ordinary people feel left behind by the fast pace of the race toward global economic integration.

A vote for Marine Le Pen and the right-wing Front National party was a vote asking to get off that global high-speed train. So, perplexingly, are many of the votes for the Socialist Francois Hollande.

But France is not the only country where efforts made toward fiscal consolidation and the trimming of social benefits, however gentle and hard to escape in rapidly aging societies, is blamed on globalization. It is stunning to see the lack of basic honesty in national accounting, a trend going back decades.

The real shock for these voters would come when, assuming they get to opt out of “Europe” and the global economy, they found their fiscal situation not to be just as dire as before, but actually worse.

Furthermore, the old game of scapegoating is reaching new heights. Citizens have long turned on politicians as a convenient target of their blame for what’s wrong. The politicians, for their part, are obviously unable to return the favor by blaming the voters, resorted to blaming “Europe” or “globalization” for all the fiscal pain they had to impose.

A difficult time of transition

Now, things have come full circle. The citizens in one European country after another do not just want to blame Europe or the world (and no longer their nation’s politicians), they just want to “exit” — period.

What or who do they have left to blame? Themselves? That might be honest, but even more uncomfortable.

Next, let’s consider the case of China. For all its economic success, it turned out that the country has been pursuing two different dreams. While Communist Party officials were focused on staying in power (at least for the foreseeable future), China’s citizens began to feel their non-materialistic oats. Moving from the rice bowl to a sushi platter, a stunning achievement pretty much in a single generation, wasn’t enough for them. They — especially the younger generations — wanted much more freedom of opinion.

As the scandal surrounding former Chongqing party chief Bo Xilai makes clear, the whole idea of the princelings — the offspring of former revolutionary leaders ruling with feudalistic zealousness — could be very dangerous to the Communist Party’s health. The fact that the country’s (presumed) incoming President Xi Jinping is a princeling himself only adds further to the present sense of unease.

Which brings us back to the United States. Objectively speaking, among the major powers, it has been at the domestic incapacitation game the longest. Not only is there no love lost between Democrats and Republicans, but their relations seem about as amicable as those between North and South Vietnam 40 years ago. Everything and anything involving the parties is turned into a zero-sum game.

At the same time, the predictable, but illogical U.S. response to the political deep freeze at home was a deep engagement in Iraq and Afghanistan — warring abroad, so as to not deal with those pesky domestic issues. Successive U.S. governments of both political stripes have wasted very large financial resources on these endeavors.

What the United States now faces, irrespective of the rhetoric emanating from the presidential campaigns, is a major retrenchment of its foreign policy aspirations. Its will is far larger than the its wallet — and whatever is left in its wallet will need to be utilized on the home front. Using the military “to get people working again” does not seem like a good strategy for “winning the future.”

For the world as a whole, this is going to be a difficult time of transition. For many decades, it was either America’s will or wallet (or both) that shaped much of the global agenda. And even when that ambition went into overdrive during the George W. Bush presidency, the rest of the world actually felt quite good about its own ability to step up to the plate and make things happen.

No longer. Most of that earlier enthusiasm has evaporated. It seems as if we are collectively heading for a period of “domestic policy first, foreign policy maybe.” But in that re-orientation and refocusing on national priorities may lie the foundations of the rebirth of a global agenda.

Reinvigorating the domestic sources of a nation’s foreign policy is not just a matter of concern to the Americans. It is a pivotal issue on the global agenda.