Michael Lind had an interesting article in Salon earlier in the week arguing that America's Cold War strategy of "markets for bases" has hollowed out the U.S. economy:
During and after the Korean War, the U.S. rebuilt its military and stationed troops along "tripwires" from Central Europe to East Asia. The U.S. encouraged the formation of the European Common Market (now the European Union) in part to provide the West Germans with markets. In Asia, Mao Zedong's victory in China cut off Japan's China market, so the U.S. offered the American market to Japanese exporters, which initially were not considered a threat to American businesses.Thus began the Grand Bargain at the heart of U.S. Cold War strategy toward West Germany and Japan, the "markets-for-bases" swap. In return for giving up an independent foreign policy to their protector, the United States, the West Germans and Japanese would be granted access to American markets (and, in the case of the Germans, access to Western European markets)....
A version of the markets-for-bases deal was extended to China, which, it was hoped, would acquiesce in U.S. military hegemony in its own neighborhood, in return for unlimited access to American consumers.
George W. Bush made the deal explicit in his 2002 West Point address: "America has, and intends to keep, military strengths beyond challenge -- thereby making the destabilizing arms races of other eras pointless and limiting rivalries to trade other pursuits of peace." U.S. to other great powers: We make wars, you make cars.
I don't think we should short-change the success in turning Japan and Germany into very prosperous, friendly nations. The U.S. not only helped them rev up their shattered economic engines, but directed their economic output toward peaceful goods. In contrast to the first World War, the U.S. and allied strategy was a lot more far-sighted, even if it has now run aground.
The current Washington consensus is that a similar gambit will work with China - they grow rich from American consumers and thus become "stake holders" in a system of our design, subordinate to our geopolitical priorities. Lind doesn't think it will work. I'm on the fence.
I think it's obvious that the military aspect of this strategy - we build a huge conventional force and you spend your money on consumer goods - is not applicable to China. But where are the other incentives to keep China more or less in harmony with American objectives?
Fundamentally the gambit with Germany and Japan worked because we had to keep them "on side" during the Cold War. There's no such dynamic at work today. China has every incentive (for now) to keep taking advantage of U.S. markets without playing ball when it comes to U.S. strategic priorities. It remains to be seen whether the reported "thaw" in U.S.-China relations is significant or not. Gideon Rachman, for one, thinks its all for show - a way for China to escape the charge of currency manipulation.
Either way, is the U.S. - deeply in debt (to China!), overseeing two wars, groping around the world for a handful of jihadists, trying to stave off a nuclear Iran and bring peace to the Holy Land (and Kashmir) - well poised to throw them a brush back pitch?
(AP Photo)
