Michael Lind: The U.S. is Stuck in the Cold War
What does America's deepening war in Afghanistan have to do with the American trade deficit? Answer: Both are the results of Cold War policies that made sense at one time but are now harmful to the United States....
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).
By the 1970s, it was clear that the markets-for-bases swap was a better deal for West Germany and Japan than for the U.S. They recovered from the devastation of World War II and won growing shares of global markets in automobiles and, in the case of Japan, consumer electronics....
The markets-for-bases deal should have been scrapped when the Cold War ended and there was no longer any need to favor American allies with one-way trade privileges in return for their support of U.S. military objectives in their regions. Unfortunately, the Cold War lasted long enough for two completely separate American foreign policy establishments -- the security establishment and the economic establishment -- to develop and take separate paths.
The American security establishment, dominating both parties, wanted the U.S. to expand its overseas commitments after the Cold War, not reduce them. Under both Clinton and Bush the U.S. expanded NATO to the borders of the Soviet Union, consolidated America's position as the hegemon of the Persian Gulf, maintained America's bases in Japan and South Korea, and encircled China and Russia with new bases in Central Asia, whose strategic usefulness was not limited to the war against a small number of jihadists.
Meanwhile, in a different part of the building, the economic establishment was living in a fantasy world, ignoring the markets-for-bases swap and pretending that every country in the world believed in Chicago School free-market fundamentalism. 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.
China, like West Germany (now Germany) and Japan before it, took the U.S. up on the offer. In seeking to persuade multinationals to close down production in the U.S. and make things in China, the Chinese government cheated in various ways, confident perhaps that the U.S. foreign policy establishment, invoking diplomatic and national-security considerations, would intervene on its behalf against American manufacturers and workers. Like postwar Japan and Germany, China has accepted the terms of the bargain America's elites offered, focusing on economic growth while the U.S. wasted blood and treasure on wars in Iraq and Afghanistan.
But now the markets-for-bases deal has broken down, because American consumers are tapped out....
There are signs...that the American people and their representatives in Congress, if not the White House, are ready to reject a Cold War system under which the U.S. gives away its industries while wasting taxes and the lives of its soldiers on quixotic crusades in the lands of the former British empire....
For the time being, however, America's out-of-touch foreign policy establishment continues to favor the policy of expanding America's geopolitical frontiers while allowing our self-interested industrial rivals to hollow out the American economy. Policies that made sense in the early years of the Cold War emergency continue to be followed out of inertia, when their original strategic rationale has long since vanished. In the words of the philosopher George Santayana, "Fanaticism consists in redoubling your effort when you have forgotten your aim."