June 2, 2012
In the past two decades, some of the most divisive debates in American politics have been over the role of multilateralism in U.S. foreign policy.
Many Democrats, for example, believed that the Bush administration’s apparent embrace of unilateralism did great harm to existing international institutions and to the United States’ reputation abroad. As Charles Kupchan and Peter Trubowitz argued in Foreign Affairs (“Grand Strategy for a Divided America,” July/August 2007), “The Republican Party, virtually bereft of its moderates after the 2006 elections, has little patience for cooperative multilateralism — and will gladly deploy its power in the Senate to block any programmatic effort to bind Washington to international agreements and institutions.”
Meanwhile, many Republicans portray Democrats as enamored of multilateral rules and processes for their own sake and neglectful of some of the United States’ security needs. As the Washington Post columnist Charles Krauthammer wrote of the Obama administration’s Libya policy, “for Obama, military objectives take a back seat to diplomatic appearances. The president is obsessed with pretending that we are not running the operation.”
Yet how deep is the partisan divide over the place of multilateralism in U.S. foreign policy? To explore this question, in the past year we sent a survey to foreign policy professionals: 50 Republicans and 50 Democrats, who had served in a mid-level or higher foreign policy position in the Clinton, Bush, or Obama administrations, or on Capitol Hill. The respondents included 23 Democrats and 20 Republicans.
The results of our study reveal that the parties are not as divided about multilateralism as the conventional wisdom suggests. First, strong majorities of both Republican and Democratic respondents said they believed that working closely with other nations serves U.S. interests and makes the country’s foreign policy more effective. Second, foreign policy leaders from both parties agreed that international economic institutions and free trade agreements are valuable, and that working with regional and global multilateral organizations such as NATO and the UN is important.
Several institutions that have their roots in the end of World War II enjoy robust bipartisan support. Large majorities of the Democrats and Republicans surveyed hold favorable views of the World Bank, the International Monetary Fund, and the World Trade Organization. Likewise, both groups held strongly favorable views of NATO and support bilateral alliances with traditional partners. Even some multilateral initiatives of more recent vintage enjoyed bipartisan favorability, such as the U.S.-India relationship, NAFTA, and the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
Although the parties broadly agreed on the importance of multilateralism, however, they weighed the decision to join in multilateral groupings differently. Republicans, for example, were more sovereignty-minded in their multilateralism. They universally agreed on the need to preserve the country’s freedom of action and overwhelmingly affirmed that protecting U.S. sovereignty is important (94.7 percent). They were often willing to forgo a degree of sovereignty if a multilateral policy appeared to be effective, and, in turn, they generally opposed a multilateral initiative that they believed would undermine sovereignty without delivering sound policy outcomes.
A majority of Democrats still agreed on the need to preserve freedom of action and to protect U.S. sovereignty, but they were less unified on the question than Republicans were. Instead, they tended to be more concerned with how well multilateral opportunities addressed the vulnerabilities created by interdependence, such as the risk of financial contagion. And for Democrats, policy effectiveness hinged more on whether international partners view an approach as legitimate. They uniformly agreed that the United States needed to enlist other nations. They also uniformly agreed that the United States cannot solve most problems alone. The Republicans surveyed were not unanimous on the question of legitimacy (60 percent) or on the value of problem-solving with others (70 percent), although these considerations were still supported by the majority of the Republicans surveyed.
The survey findings seem to indicate that Republicans and Democrats use different balancing tests when considering multilateralism. The sovereignty and interdependence of nation-states are both realities of the international system. The tension between the two principles lies at the heart of the differences between Democrats and Republicans on multilateralism as well as on specific institutions and initiatives. For example, respondents of both parties largely agreed that the UN Security Council is an important place to defend U.S. interests (100 percent of Democrats and 70 percent of Republicans), but Democrats were more favorable to the institution itself than Republicans were (over 77 percent compared with 30 percent) and much more likely to agree that the UN is important because it has global legitimacy (almost 91 percent of Democrats compared with 25 percent of Republicans)…
June 2, 2012
Yes, the demise of Politburo member Bo Xilai has captured international headlines for exposing how political power and family money melded together in Chongqing, his mist- and smog-shrouded pocket of southwest China. While Bo was reviving Maoist nostalgia on his official’s salary of about $1,600 per month in a country whose per capita income ranks 121st in the world, his son was renting a presidential-style suite at Oxford and driving a Porsche at Harvard. Bo’s elder brother adopted an alias to control $10 million worth of shares at the Hong Kong-listed subsidiary of a state-owned bank. And Bo’s wife, Gu Kailai, stands accused of being involved in the murder of her English friend Neil Heywood after a falling out over money.
Yet in a Communist Party notorious for nepotism and which refuses to subject itself to any law, the Bo family’s known financial antics were in fact relatively modest. Two of his wife’s sisters are worth upwards of a combined $126 million, according to a Bloomberg investigation. But the fortunes of other powerful political clans almost certainly extend into the billions, as a months-long investigation into the business dealings of one of China’s most prominent families makes clear. Through years of influence-peddling and investing, multiple sources close to him say, the son of a former Chinese vice president managed to place himself at the center of a variety of lucrative deals across all aspects of China’s economy, from coal mines to the stock market to shopping malls, amassing so much money he ended up buying a $32 million family mansion in Australia.
And his success exemplifies the ability of regime insiders to work the system for their own personal gain — and make a mockery of the legal system in China. Although the private wealth of the party’s princelings — the well-connected sons and daughters of top officials — is usually well-concealed, they are increasingly dominating the market for blocking and lubricating the arteries of public- and private-sector wealth. Stock exchanges double as vehicles for converting family political capital into cash, which can be re-converted into political power, sometimes by means as blatant as “auctioning” official positions for sale. State-owned enterprises and bureaucracies can be ruled like personal fiefdoms, with contracts allocated to relatives and useful friends, while entrepreneurs shift their profits and loyalties in exchange for regulatory protection.
Some of China’s most respected public intellectuals are warning that society and economy are being held hostage to the wealth-maximizing requirements of the political elite. These warnings echo privately in business circles, too, where entrepreneurs continue to be enthralled by the prospects of short-term profits but increasingly alarmed about their personal and financial security. Officials in developed countries, and even Chinese entrepreneurs themselves, report a steep increase in business people and capital leaving China. “Nine out of ten of my business clients are in the process of applying to emigrate, if they haven’t already,” one of China’s most successful investment bankers told me last week (he is in the process of emigrating to Canada). Executives at state-owned companies have grown incapable of acting in the interests of their companies, he says, and China’s entire system of allocating resources “is malfunctioning.”
Of all the inside deals that abound in China, few compare in scale and audacity to the clandestine privatization scheme that Chinese journalists uncovered in 2007. Caijing magazine discovered that 92 percent of the shares in the state-owned power generating company Luneng, with net assets valued at $9.47 billion, had been secretly transferred the previous year to two unknown private companies for $478 million. When Chinese leaders learned the identities of the princeling children involved, they pressured the magazine’s publisher and editor and forced a follow-up article to be recalled as soon as it hit newsstands. Documents cited by Caijing suggest the handful of new owners might have received a windfall gain in the vicinity of $9 billion from the deal.
Foreign Policy has learned that the most sensitive individual involved was Zeng Wei, the then 37-year-old son of former president Jiang Zemin’s right-hand man Zeng Qinghong. While details of profit shares, valuations of Luneng assets and debts, and the identity of several other leading families remain disputed, Zeng Wei’s involvement has been confirmed by a person integral to the original investigation, business and social acquaintances of Zeng Wei who count themselves as friends, and a recently retired senior official closely acquainted with Zeng Qinghong. The transaction was subsequently unwound but no senior figure on either side of the transaction, including the current head of China’s electricity grid company, ranked no. 7 on the Forbes 2011 list of the world’s largest corporations by revenue, is known to have faced disciplinary action. Exactly what happened to the $9 billion remains unknown.
It’s hard to overstate how crucial Zeng Qinghong was to the ruling elite at the time his son was involved with these machinations: That same year, he brokered the surprise deal that installed Xi Jinping as the president-in-waiting, a masterwork of consensus-building among warring party factions. In 2008, just months after the Xi deal was presented to the Chinese public as a fait accompli, Zeng’s son Zeng Wei paid $32 million for a home with a nine-car garage in Sydney, the most egregious confirmed example of a princeling flaunting his wealth. According to a family friend of Zeng Qinghong, the notoriety of his son’s financial dealings — and not only regarding the power company Luneng — was one factor in his decision to retire after he handed the vice presidency to Xi in 2007. Although Zeng had reached the semi-official retirement age of 68, he also declined the customary honorary positions and confined his power-broking role to giving personal advice only to Jiang Zemin, says the family friend.
The sequence is the clearest example of how the failure of Chinese leaders to curb the crony deals of their children makes them perpetually vulnerable to their enemies and yet collectively secure, knowing that most leading families would not dare support a genuine corruption investigation that could jeopardize them all.
From the start, Jeff Bezos wanted to “get big fast.” He was never a “small is beautiful” kind of guy. The Brobdingnagian numbers tell much of the story. In 1994, four years after the first Internet browser was created, Bezos stumbled upon a startling statistic: the Internet had been growing at the rate of 2,300 percent annually. In 1995, the year Bezos, then 31, started Amazon, just 16 million people used the Internet. A year later, the number was 36 million, a figure that would multiply at a furious rate. Today, more than 1.7 billion people, or almost one out of every four humans on the planet, are online. Bezos understood two things. One was the way the Internet made it possible to banish geography, enabling anyone with an Internet connection and a computer to browse a seemingly limitless universe of goods with a precision never previously known and then buy them directly from the comfort of their homes. The second was how the Internet allowed merchants to gather vast amounts of personal information on individual customers.
The Internet permitted a kind of bespoke selling. James Marcus, who was hired by Bezos in 1996 and would work at Amazon for five years, later published a revealing memoir of his time as Employee #55. He recalls Bezos insisting that the Internet, with “its bottomless capacity for data collection,” would “allow you to sort through entire populations with a fine-tooth comb. Affinity would call out to affinity: your likes and dislikes—from Beethoven to barbecue sauce, shampoo to shoe polish to Laverne & Shirley—were as distinctive as your DNA, and would make it a snap to match you up with your 9,999 cousins.” This prospect, Marcus felt, “was either a utopian daydream or a targeted-marketing nightmare.”
Whichever one it was, Bezos didn’t much care. “You know, things just don’t grow that fast,” he observed. “It’s highly unusual, and that started me thinking, ‘What kind of business plan might make sense in the context of that growth?’” Bezos decided selling books would be the best way to get big fast on the Internet. This was not immediately obvious: bookselling in the United States had always been less of a business than a calling. Profit margins were notoriously thin, and most independent stores depended on low rents. Walk-in traffic was often sporadic, the public’s taste fickle; reliance on a steady stream of bestsellers to keep the landlord at bay was not exactly a sure-fire strategy for remaining solvent.
Still, overall, selling books was a big business. In 1994 Americans bought $19 billion worth of books. Barnes & Noble and the Borders Group had by then captured a quarter of the market, with independent stores struggling to make up just over another fifth and a skein of book clubs, supermarkets and other outlets accounting for the rest. That same year, 513 million individual books were sold, and seventeen bestsellers each sold more than 1 million copies. Bezos knew that two national distributors, Ingram Book Group and Baker & Taylor, had warehouses holding about 400,000 titles and in the late 1980s had begun converting their inventory list from microfiche to a digital format accessible by computer. Bezos also knew that in 1992 the Supreme Court had ruled in Quill Corp. v. North Dakota that retailers were exempt from charging sales tax in states where they didn’t have a physical presence. (For years, he would use this advantage to avoid collecting hundreds of millions of dollars in state sales taxes, giving Amazon an enormous edge over retailers of every kind, from bookstores to Best Buy and Home Depot. In recent months, however, Amazon, under mounting pressure, has eased its opposition and reached agreements with twelve states, including California and Texas, to collect sales tax.) “Books are incredibly unusual in one respect,” Bezos said, “and that is that there are more items in the book category than there are items in any other category by far.” A devotee of the Culture of Metrics, Bezos was undaunted. He was sure that the algorithms of computerized search and access would provide the keys to a consumer kingdom whose riches were as yet undiscovered and barely dreamed of, and so he set out to construct a twenty-first-century ordering mechanism that, at least for the short term, would deliver goods the old-fashioned way: by hand, from warehouses via the Postal Service and commercial shippers.
One of Amazon’s consultants was publishing visionary Jason Epstein. In 1952 Epstein founded Anchor Books, the highbrow trade paperback publisher; eleven years later he was one of the founders of the New York Review of Books, and for many decades was an eminence at Random House. His admiration for Bezos was mixed with a certain bemusement; he knew that for Amazon to really revolutionize bookselling, physical books would have to be transformed into bits and bytes capable of being delivered seamlessly. Otherwise, Bezos would have built only a virtual contraption hostage to the Age of Gutenberg, with all its cumbersome inefficiencies. But Epstein could not fathom that the appeal of holding a physical book in one’s hand would ever diminish. Instead, he dreamed of machines that would print on demand, drawing upon a virtual library of digitized books and delivering physical copies in, say, Kinkos all across the country. The bookstores that might survive in this scenario would be essentially stocking examination copies of a representative selection of titles, which could be individually printed while customers lingered at coffee bars awaiting the arrival of their order. Ultimately, Epstein would devote himself to this vision.
Bezos looked elsewhere, convinced that one day he could fashion an unbroken chain of ordering and delivering books, despite the deep losses Epstein warned he’d have to sustain to do so. But first he had to insert the name of his new company into the frontal lobe of America’s (and not only America’s) consumers. Like all great and obsessed entrepreneurs, his ambitions were imperial, his optimism rooted in an overweening confidence in his own rectitude. He aimed to build a brand that was, in Marcus’s phrase, “both ubiquitous and irresistible.” A decade before, while a student at Princeton in the mid-1980s, he had adopted as his credo a line from Ray Bradbury, the author of Fahrenheit 451: “The Universe says No to us. We in answer fire a broadside of flesh at it and cry Yes!” (Many years later, the octogenarian Bradbury would decry the closing of his beloved Acres of Books in Long Beach, California, which had been unable to compete with the ever-expanding empire of online bookselling.) A slightly built, balding gnome of a man, Bezos often struck others as enigmatic, remote and odd. If not exactly cuddly, he was charismatic in an otherworldly sort of way. A Columbia University economics professor who was an early boss of Bezos’ said of him: “He was not warm…. It was like he could be a Martian for all I knew. A well-meaning, nice Martian.” Bill Gates, another Martian, would welcome Bezos’ arrival to Seattle, saying, “I buy books from Amazon.com because time is short and they have a big inventory and they’re very reliable.” Millions of book-buyers would soon agree…
June 2, 2012
This image has been posted with express written permission. This cartoon was originally published at Town Hall.