American Hustle: We Are Our Choices
Ian Bremmer and Scott Malcomson: A Conversation . . . Indispensable? Pragmatic? Independent? Globalist? None of the above? On the eve of the 2016 presidential election, Ian Bremmer, founder and president of Eurasia Group, and Scott Malcomson, author of the recently published Splinternet: How Geopolitics and Commerce Are Fragmenting the World Wide Web, discuss the challenges facing the next president, casting a cool gaze at the world that stares back at America, waiting to see what happens on November 8, 2016.
SCOTT MALCOMSON: In Superpower: Three Choices for America’s Role in the World, which came out earlier this year, you take the question of American leadership in the world and pose three different views of what America’s role should be. You then argue for each one in turn: Indispensable America, Moneyball America, and Independent America. “Indispensable” is what most people probably associate with the Clinton Administration. It maintains that no country but the U.S. can provide leadership based on its values, but also on the projection of power, gradually bringing other states around to something like the American model of democracy, free markets, and liberal values. “Moneyball” is what it sounds like: a pragmatism or realism that looks at the choices America faces and, while holding its values dear, mainly tries to find out the best route to take based on the available options and leave it at that. Finally, “Independent” emphasizes that America’s mission is really for America, and its greatest responsibility as a democracy is to its own citizens—to its own values and their unending refinement. “Independent” America leads by example more than by the assertion of power.
I would think of George W. Bush as being an “Indispensable” America kind of guy, if maybe of a particular confused type and with the wrong cabinet. Obama, as you argue, might have started out as an “Indispensable” America person but has governed as a “Moneyball” president. “Independent” America made me think of Donald Trump.
In the “Independent America” chapter you talk about how NATO costs too much, our allies do not contribute enough, and NAFTA has its shortcomings; that Vladimir Putin merits some sympathy and the millions of ethnic Russians on Russia’s periphery deserve a hearing as well; and that the frequent use of drones by the United States under President Obama has been an error. If Donald Trump were at some point able to articulate his foreign policy, it seems to me it would probably be “Independent” America. So when you wrote at the end of your book that you really feel strongest and best about the Independent America model, I thought: Is Ian going to be the Donald Trump explainer?
IAN BREMMER: Absolutely not, but it is complicated. Let me start with the absolutely not. I agree that Obama is more of a “Moneyballer,” and that Hillary Clinton and Bush are more “Indispensable,” if in somewhat different ways. But is Trump “Independent”? You started off saying an Independent America leads by example. Trump is the antithesis of leading by example. The way he talks about the Muslim community in the United States, the way he talks about people that need to be “sent back,” the way he talks about torture. It is very clear that under a Trump administration other countries would run in the other direction as fast as they can. I actually think that in a Trump presidency there would be at least a 50% chance, probably more, that López Obrador would win as the next president of Mexico. That is not leading by example. It is not getting other countries to be more like you. That is other countries having presidents who supported the U.S. so weakened that anti-U.S. populism is actually strengthened.
MALCOMSON: You could call that leading by repulsion.
BREMMER: Yes, and I think that Trump leading by repulsion is the exact opposite of what “Independent” America is. But, as I said, it is complicated. Trump understands and can deliver a message that resonates with the American people—because the establishment is missing a lot about where America is heading in the world. It does not matter how unsuited temperamentally and experientially to be president Trump in fact is. He delivers a message that resonates. For example, when Trump said, “If the South Koreans and Japanese are not going to pay more for their defense, then let them go nuclear,” and Hillary Clinton went nuts. She said, “Oh, my god, does he know what he is talking about? I mean, go nuclear? Nuclear war? Does he have any idea what nuclear war is?” But hold on a second. The South Koreans and the Japanese would be two of the most responsible countries imaginable with nuclear weapons, in terms of transparency.
MALCOMSON: Surely no one understands nuclear war like the Japanese.
BREMMER: Absolutely. And if you ask the average American would they have a problem with the idea that the U.S. would do less and Japan and South Korea would do more for their defense, I think they would be okay with it. Japan’s prime minister, Shinzo Abe, wants to change the constitution to move in that direction. And, you know, when Trump talks about European allies as being free riders, heck, Obama said that when he was interviewed for the Atlantic. But because Trump is such a buffoon and because he is willing to use racism, xenophobia, and all of the worst and basest impulses, he is also discounted as a buffoon—even when he says something that resonates.
For example, I was, for my sins, in both Cleveland and Philadelphia for the conventions this year. I was on the floor when Trump said: “We’re going after the globalists.” I have never heard an American president say he was going after the globalists, but Trump has a point. A lot of my friends, you and me included, have more in common with people sitting in conference rooms like the one we are sitting in here in New York, and in other commercial centers around the world, than they do with the people listening to Trump at the Republican Convention in Cleveland. Trump is calling BS on that, and I think that is important. I think that resonates. A lot of people in the 1%, both economically and in terms of influence—public intellectuals, the media—really have allowed that bubble to let them forget.
MALCOMSON: I am preoccupied by the idea that there is an emerging electorate united around the negative idea of anti-globalization but not necessarily around a more positive idea about what America might stand for, what its values might mean to the rest of the world. With the right leadership, could that be a real electoral grouping that would have any stability? It does not seem like either Hillary Clinton or Donald Trump is able to really corral that. Certainly the idea that Donald Trump would be the spokesperson for the 99% is, on its face, pretty hard to believe. At the same time, Hillary Clinton hasn’t managed to bring Bernie Sanders voters behind her with any enthusiasm. But, theoretically, say there was some other, more suitable candidate. Is there a stable or even somewhat coherent anti-globalization electorate within the U.S.?
BREMMER: If Bernie had said, “Look, Hillary Clinton is by far the most establishment candidate out there, and that’s what we have a problem with. Special interests in the United States have eroded and destroyed the social contract and the legitimacy of U.S. political institutions. We need dramatic change. The only way we are going to get that is with the only candidate we have right now. So, we have got to hold our noses on the things we disagree with. We are going for Trump.” Well, I think that then you would have had a more coherent movement. The problem Trump really has is not that he is a billionaire who grew up with a rich father; he still comes across as someone who was never really allowed into the establishment.
The problem is that a big part of Trump’s message is aimed at disgruntled, undereducated white folk. America in general is becoming more secular, more pro-immigrant, much more multicultural, more socially liberal. And these undereducated, older white people do not like that. They feel like they have been forgotten and they have been told that it is not okay for them to articulate their grievances. Not only have they been left behind, their suicide rates are through the roof, their behavioral disabilities are horrifying, and their life expectancies are going down in ways unimaginable for an OECD demographic. They have also been told by President Obama (or are convinced they have been told): “You are not allowed to talk about it.” Right? “You are not the ones with the problems here. And you can cling to your guns, your religion.” Or Hillary can dispense with them as “deplorables.” It is not okay for them to even have an identity as an aggrieved population because they’re white men.
MALCOMSON: And white people, by definition, cannot be aggrieved in the United States.
BREMMER: Correct. White people cannot be aggrieved in the United States. I think that Trump really embraces that group, but it is entirely too small to win and it is dying off. In Europe, however, that demographic is actually much more coherent across generations because of the Islam issue, the migrant issue, and because the history of being much more nationally coherent is very strong.
MALCOMSON: Hillary Clinton: “Indispensable” on the campaign trail, “Moneyball” in office? Similar to Obama in that trajectory?
BREMMER: She is “Indispensable” by temperament. I think that Obama was “Moneyball” by temperament. He did not want to do what the establishment wanted him to do. I think Hillary does. She’s more interested in recalibrating and rebuilding the traditional relations with countries like Saudi Arabia. She is much more pro-Israel. She would be much stronger about NATO. She would be more hawkish about interventions against terrorism in a lot of countries around the world. But constraints in terms of the situation on the ground in those countries and how much American allies are willing to support, as well as just how unwilling the American public is to go along with this stuff—these are some of the factors that will probably make a more pragmatic Hillary emerge.
You know, the Trans-Pacific Partnership (TPP)—that trade agreement was something Clinton really wanted. She was the architect. She is ostensibly opposed to it now. I have talked to enough people around Hillary who make it very clear that she fully intends, assuming she wins, to get back behind it and try to find a way to lawyer that. It is that kind of dynamic that ends up making Hillary more of a “Moneyballer.”
MALCOMSON: There is also, theoretically, the Transatlantic Trade and Investment Partnership (TTIP), which has fallen on hard times politically in Europe. I do not think it ever got prominent enough over here in the U.S. to fall on hard times, but, presumably, it would.
BREMMER: It would have, yes.
MALCOMSON: Is TTIP dead in the water, so to speak?
BREMMER: The Germans have said so, the French have said so. I do believe that if Brexit had not happened, the Germans and the French would not have made that announcement. But with Brexit they know that what they have to do now is this negotiation with the U.K. They do not know what that is going to look like or how long it is going to take, and they have their own domestic constituencies that are absolutely not clamoring for trade agreements right now.
MALCOMSON: What I find interesting about that reaction was that Germany and France began speaking as sovereign nations more than they had been. Not long ago the Germans were acting, up to a point anyway, as good Europeans within the context of the European Union and pooled sovereignty. Once Brexit happened and this issue came up of European nations’ attitudes to a transatlantic trade agreement, they began to speak as nations. My presumption is that Germany and France will continue to speak more and more about and as nations rather than as partners in a greater European project, whether in economic or security terms. Would you agree that the European dynamic is towards increased national expressions, particularly by the more powerful countries?
BREMMER: I would argue that the Germans have been doing that much more so than the French over the past years. They are the ones that we really look to for being the voice of Europe. The French do so somewhat, but would we have the sanctions against Russia that we presently do if not for the Germans? No. The French were only modestly constructive on that. The Greek deal was all about the Germans, both being constructive but also wielding a stick as necessary. The French were very much a junior partner. But your point is an important one: you look at these countries and they all increasingly look like it is becoming “every nation for itself.”
And this is all taking place in the heart of what had been the most successful, by far, experiment in supranational governance that the world had ever seen. It is disconcerting for people hoping for a strong Europe; it is still more disconcerting for Germany. The ability of the Alternative für Deutschland (AfD) party, the Eurosceptic party, to go from nowhere to beating chancellor Angela Merkel’s own party in her home district is something Merkel would have found astonishing even six months before.
Merkel came from East Germany. When the Berlin Wall came down, she saw the U.S. as the savior of the planet. The Americans were the staunch anti-communists who worked very hard to free the Eastern Bloc. They were there for the Germans, bringing the wall down. And now Merkel saw these people who were in need: refugees. They were being oppressed, they were starving, they were being shot at, they were dying, and they had nowhere to go. Germany had the money and had the ability to take care of them, and said they were going to. Merkel and Germany then look to the United States—which does nothing. Merkel looks around to other European countries. They do nothing. Merkel looks within Germany and sees the nation is not up for it. I think she was very deeply surprised.
MALCOMSON: In the local Mecklenburg election you mentioned, Alternative für Deutschland (AfD) took votes away from Merkel’s Christian Democratic Union (CDU) but also from the far-right NPD, the Greens, the Social Democrats. Similar to what we were discussing with the U.S.: Is there a coherent, durable electoral grouping that would make sense in the German context, analogous to the would-be Trump-Bernie coalition?
BREMMER: Absolutely. You definitely could make that argument. This is a fairly new party, and their leaders are not well known. So, as easy as it is for them to cohere, bad leadership can make them fall apart. What is Trumpism without Trump? Right now it is nothing. So we will see. But for Merkel’s upcoming 2017 election, I firmly believe that the AfD will be the main opposition. That is an enormous change in a short period of time in the country that matters the most for Europe. It could be the most important risk coming out of Europe in 2017. And that is in the context of an Italian referendum, and French elections, and the Hungarian referendum, and a Turkey refugee deal, and potential Italian and Portuguese banking crises, and Spain not having a government, and the Brexit negotiations. There are lots of things to worry about in Europe.
MALCOMSON: On the subject of nationalism, we have the European example and, in its own strange way, the American example. Nationalist parties have also come to dominate East Asia and, to a significant extent, South Asia since around 1997. They are very, very different situations, but if you were to look from way above the earth, you could argue that there has been an advance of nationalist politics and power beginning in Asia and then rising more in Europe and in North America. Do they have anything in common? I understand that in itself “nationalisms” having something in common is a slightly weird concept. It is not meant as a shared ideology.
BREMMER: And yet you have Vladimir Putin providing financial support for the French National Front and Nigel Farage in Mississippi stumping for the Trump campaign. It feels weird and yet you kind of get it.
MALCOMSON: It is a great destabilization policy, which seems to be Putin’s immense strength as a politician.
BREMMER: But they do address similar kinds of issues. I do not think this is just politics making strange bedfellows. There is something structural there. Asia is different. The hollowing out of the middle class that is happening in the U.S. and Europe that has driven so much of this populism and nationalism—that is not what we are seeing in Asia.
In Asia the middle classes have gotten stronger, and a lot of that nationalism is actually patriotism that is supportive of the pretty strong governments in place. That is certainly true with Xi Jinping in China. It is certainly true with Narendra Modi in India. There, the middle classes have been rising very significantly because of globalization. People feel like their governments have helped facilitate that. There is a lot more nationalism in China today than there was 20 years ago, but that nationalism is supportive of Xi Jinping and of China becoming number one economically in the world. In India, it has not reached anywhere near that level, but Modi is still taking advantage of a younger, prouder India that is willing to get behind him. And there is a danger, of course, that that could lead to anti-Islam sentiment in India. Certainly, it could cause more conflict with Pakistan over time. But as long as the leaders are strong and they have the people with them, they have the ability to tamp down the more destructive elements that lead to protectionism or lashing out geopolitically. For now, I actually think that Asian nationalism is a more constructive force.
MALCOMSON: Both of the Koreas, including the southern one, also have nationalist governments, as does Japan under Abe. The three-way conflict between Korea, China, and Japan is one of long standing. Do those respective nationalisms—taken in combination—worry you? The narrative in Japan is often of a kind of restoration of normalcy. The idea that there is a normal level of nationalism is itself kind of an odd one, but you can see that it has a grip on people. Does that nonetheless add up to a fairly combustible situation, obviously factoring in the East China Sea issue?
BREMMER: I do not think so. Obviously, these are countries that historically have fought against each other. There is a lot of propaganda. There are history textbooks that demonize the other and that is not great. And yet the business that is being done between Japan, South Korea, and China is very significant and is increasing a lot. Record numbers of Chinese are traveling to Japan as tourists. Younger Chinese are really excited to go to Japan. Abe himself definitely feels China is a malevolent force that at some point will pose a fundamental and even existential threat to Japan, but younger Japanese do not feel that way. They kind of want to get on with their lives and think more about the economy and their friends; they are not as interested in this historical enmity. The South Korean government and those who remember the Korean War are absolutely oriented toward the U.S. and the military relationship, the bases. You talk to South Koreans under 35, they think that all of that is a disaster for the country. The U.S. is in decline. They think it causes problems with North Korea. They think China is the future, and that is where they want to be oriented. So I actually think that the longer-term trend in all three countries is much more pragmatic and not prone to emotional outbursts over symbolism.
MALCOMSON: Russia has a more or less single-resource economy and lacks the trade incentives to create the kinds of ties that a country like China or Korea or Japan would have, or that most non-petrol states would have. There is also a nationalism in Russia. There is unquestionably an anti-globalism feeling, although the degree to which that can be separated from anti-American feeling is hard to parse. Is Putin a manifestation of something that is going to last beyond him in terms of Russia’s approach to the rest of the world, whether it be Europe or China or the United States?
BREMMER: I am pessimistic about Russia’s future. That feeling of “Great Power” status being deserved but lost is manifest in almost every Russian you talk to, and Putin is the guy who finally has stood up to the West, even at some economic cost. As a consequence he is being lionized across the country, and he has made it much easier on himself to really consolidate power and gut any possibility of pluralist institutions in Russia.
The Russians have some legitimate grievances about the West, but their real worry has to be China. The Chinese have a trillion dollars to spend on infrastructure of various sorts outside their country. They are going to spend it everywhere, but not in Russia. The deals just are not there.
MALCOMSON: Xi Jinping’s signature One Belt, One Road initiative goes right underneath Russia.
BREMMER: And the countries along that road are countries the Russians believe are fundamentally really theirs: Kazakhstan, Uzbekistan. And the Chinese are going to dominate these countries economically in short order. The Russians are going to feel really encircled. They are not going to like it.
MALCOMSON: Can we revisit the “G2” concept?—that is, with regard to the U.S. and China joint announcement on climate change and clean energy cooperation. In terms of climate change, over the eight years of the Obama administration, the White House has emphasized what amounts to fairly quiet, if not secret, diplomacy on climate issues.
BREMMER: With China.
MALCOMSON: With China. And it might, in retrospect, be looked at as one of the real foreign policy successes of the Obama administration. Is there still a little life left in the G2? They also had a cyber agreement that might or might not be viable, depending on the day.
BREMMER: I am glad you raised that because there are big challenges before G2 becomes possible. We are not close to an agreement right now. One look at the U.S. presidential race explains why. The Chinese are definitely doing more internationally, not just on climate. The Chinese are providing some humanitarian support to Syria. They would not have done that before. The Chinese are putting a military base in Djibouti in the Horn of Africa. The Chinese are building out economic architecture: the new Asian Infrastructure Investment Bank (AIIB), for example. As their economic interests are becoming bigger and more global, the Chinese are recognizing incrementally that their national self-interest is in creating and defending better security for those investments. That does make them more aligned with the U.S. over time.
But the Chinese still have to work through this extraordinary and unprecedented domestic transformation, which will both be their top priority and distracting, and also may not work. Right now most Americans are probably less interested in all of this because of the growing populism here at home in the U.S.
MALCOMSON: In fairness, there is the famous elephant curve of Branko Milanovic, the economist and scholar of income inequality, which essentially shows that the Chinese middle class, in particular, has benefitted greatly from globalization at the same time that the American lower and middle classes have not.
BREMMER: There are all sorts of policies that could allow you to redress the comparative losses of the middle classes in advanced industrial democracies. But let us keep in mind that the biggest money has been made by multinational corporations that are getting cheaper rates by going over to these other countries, which they want to continue to do. That is capitalism. But those profits do not need to only go to the 1%, because if they keep doing that, they are going to really piss off those middle classes who are going to eventually call for a very dramatically different system. And you are going to have to repress them, or they are going to vote you out of power, or you are going to end up walling them off. Those are options, but I think most of us do not want the bad options.
The good option is to ask: how do you best address this? What do you do with these people? Denmark has basically said, “We know we are not going to have jobs for these people. Those jobs are mostly going to be in China and in Mexico, and, frankly, they are going to be automated. And, by the way, when they get automated, a lot more of the profits are going to come back to our countries, right? So then the emerging markets are going to have a big problem.” This still does not help the middle classes unless you do something for them.
Denmark is basically saying that labor is going to be like Airbnb. Every individual has a set of skills—and those skills, some are highly paid, some are not as highly paid, but they need to be made much more efficient. They are not going to be tied to one job, and at certain times of the year, they will respond to certain market indicators.
With your job, there is going to be surge pricing. You will not be working all the time, and it will not be regular, and you may be really crushing it for three weeks, then you may be unemployed for two months. But you know what? Your benefits and your baseline ability to live are going to be attached to you as an individual, not to your employer—because you are not going to have an employer. There are things you can do to address the dip in the elephant curve, but we have chosen not to do them, in part because the U.S. political process has been captured by special interests, who have no interest in supporting reforms.
MALCOMSON: What you said about automation implies that the back of the elephant, so to speak, will be lowered over time.
BREMMER: Right, but the tip of the trunk will be fantastic.
MALCOMSON: You seem to be thinking mainly of American multinationals. If you look at the way they have been able to take their supply chains around the world, it is a technologically enabled means of lowering labor inputs and decreasing other costs, such as for transport. Those companies have tended to park their profits overseas when they can, to keep them away from American taxation. Can that continue indefinitely?
BREMMER: If people are angry about the fact that Starbucks is not paying taxes, they have the ability to say, “We’re not going to actually use your products if you don’t change your behavior.” Governments will respond to the mob as well. The real question is whether or not those two responses from governments and from mobs are too diffuse and too ineffectual—because there is a third alternative, which is that the disenfranchised just get walled off virtually. And that is happening. Israel/Palestine is a great example of it, but you also see it in parts of the United States and Europe right now. If that continues, then multinationals are still going to have a pretty strong ride before they are actually disabused of some of their present practices.
MALCOMSON: In the contemporary framework, is state capitalism, or rather the capitalist state, the only likely defender of the non-corporate citizen? In other words, when it comes to the inequality-increasing aspect of technology, is it really only up to the state to be able to manage that in a way that will not just simply abandon large portions of the population?
BREMMER: Look at GenXers, who are running a lot of these big multinational corporations—which seem to be going incredibly well, world-busting places—and they are not paying much attention at all to this growing inequality. But they are very competitive, these people. And if they see that the social contract is starting to erode, and if they understand that if they do not start doing something that actually addresses the social contract for these people, that—god forbid—one of their competitors does and it hurts them and they are now the villain, but the other one is now the nice guy? Then, they are going to want to be out there first.
So maybe the private sector will be a part of the solution. I hate it when people say that, but I think that is possible.
This conversation, which took place at the New York headquarters of Eurasia Group in September 2016, was edited for clarity and length.