Old School Realpolitik

I must have missed something big in the U.S. foreign policy community, probably at some point after 1974 when Richard Nixon’s skeletons came home to roost.¹ Nixon, along with his foreign policy guru Henry “Dr. K” Kissinger, were realists above all else, believing that a country should first and foremost direct its policies towards national goals and security.

I’m a bit peeved at Johns Hopkins University SAIS for not pointing out that realism had not only been out of vogue since 1974, but had been completely expunged from the American international relations vocabulary (I blame Eliot Cohen). Since SAIS conferred my masters degree to me just a few years ago (in 2006), this is a particularly egregious oversight on their part. Perhaps the shift away from realism was something they thought a simple lawyer like me didn’t need to know.

Regardless, I am glad that there are still some people out there that understand what realism is, particularly since China is the world’s foremost adherent to this international relations theory. One such person is Dan Ikenson, trade guru at the Cato Institute. In a column yesterday for Forbes, Ikenson goes after a journalist that doesn’t seem to understand what “national interest” means:

Steven Pearlstein’s ready for the nuclear option.  With the conviction of a man who knows he won’t be held accountable for the consequences of his prescriptions, Pearlstein says the time has come for action against China.  Hopefully, those whose fingers are actually near the button will recognize Pearlstein’s suggestion for what it is: an outburst of frustration over what he considers China’s insubordination.

In his Washington Post business column yesterday, Pearlstein criticizes U.S. policymakers for blindly adhering to the view that China will inevitably transition to democratic capitalism, while they’ve excused market-distorting protectionism, mercantilism, and state dominance over the economy in China.

Ikenson then proceeds to destroy Perlstein’s argument in a very methodical manner, which is a pleasure to read. What is comes down to is that a large number of U.S. critics are hypocrites. The U.S.-China relationship was all fine and dandy when the market was rapidly expanding for U.S. firms and the nation doled out tax breaks and other preferences to attract foreign investment. Moreover, from the mid-90s onward, China seemed to be on a fairly steady linear glidepath (that accelerated with WTO entry) towards increasing economic liberalization.

Unfortunately, a lot of folks took China’s economic reforms and made some very poor assumptions, many of which were totally unrealistic. As I wrote today on china/divide, in a response to GE CEO Jeffrey Immelt’s recent anti-China comments, China’s economy has changed over the years, prompting a shift in policy according to its interests:

Some­how Immelt and his ilk got the mis­taken impres­sion that when China joined the WTO, it meant that the country’s eco­nomic pol­icy would some­how be guided by a clas­sic Lib­eral lais­sez faire phi­los­o­phy, that China was a con­vert to the Wash­ing­ton Con­sen­sus, and that for­eign investors would be treated like roy­alty. For many years, for­eign investors were indeed given lots of great deals, includ­ing tax breaks. But the econ­omy here has moved on and matured, and so has Beijing’s inward for­eign invest­ment poli­cies. Immelt must have missed that memo.

To be blunt, one gets the impression from certain foreign investors that because China is no longer interested in sucking up to them, that somehow something nefarious is going on that needs to be dealt with by the U.S. government. While it is true that certain protectionist policies implemented by Beijing are problematic and unfair, based on existing WTO rules, many other moves are simply based on China’s industrial policy. Just because Beijing’s economic strategy, which involves close cooperation with, and assistance given to, domestic enterprises, differs fundamentally from that of the U.S., that doesn’t automatically make it formally actionable or unfair.

This bitterness over changing circumstances expressed by some American officials and business leaders is reflected in complaints that China simply does not want to cooperate with U.S. companies any longer. Perlstein’s take on this, which unfortunately shines a harsh light on his ignorance of Chinese politics and society, is that China is not interested in fostering relationships. Ikenson responds:

Pearlstein’s suggestion that the Chinese “aren’t much interested in relationships” strikes me as frustration over the fact that China is no longer a U.S. supplicant.  Perhaps the truth is that China isn’t much interested in a one-way relationship, where it is expected to meet all U.S. demands, while seeing its own wishes ignored.

As Jim McGregor suggested in a seminal Washington Post Op/Ed back in May (I wrote about it here) about China’s industrial policy, the U.S. needs to come up with a policy of its own. China will continue to follow a realist foreign policy in conjunction with its industrial policy, which as time goes on will not always mesh well with U.S. national interests and those of U.S. companies.

What’s so difficult to understand?
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1. That’s one of my all-time favorite mixed metaphors. Sorry about that.[↩]

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