Maritime Primacy, Network Externalities and Asymmetric Blocpolitik

Map 1. Great power blocs, independent powers, contested zones.

In an interesting and contemplative article in the current issue of the National Interest, Michael Lind casts a fresh look at world politics. His approach is to reformulate economic and security alliances as carriers of joint information about the world economy and the global balance of power. This frame of reference allows Lind to go beyond both realism and international economics. The former sees military alliances as temporary and flexible outcomes of great power balancing. In the latter, trade agreements and economic partnerships are divorced from great power politics and geared towards purely economic ends. Neither approach captures the real geoeconomics of blocpolitik.

[In theory, a state] can join one set of security alliances for purposes of military protection, a different trade bloc for commercial purposes and a third set of international alliances, perhaps drawn together by political creed and social values. In the real world, this kaleidoscopic complexity does not exist.

By construction, the overwhelming overlap of international security and economic alliances cannot be explained by purely economic logics. Likewise, the survival of the US-led Atlantic and Pacific security alliances 25 years after the capitulation of the Soviet Union is a glaring anomaly of realism. These anomalies stem from mistakenly treating ‘security and trade policy as distinct realms, each with its own internal logic and unconnected to the other.’ Lind’s novel approach allows him to put both economics and international power politics at the center of the frame of reference. He also pays attention to the neocolonial aspects of blocpolitik.

For the hegemonic power that orchestrates a bloc, the bloc multiplies national military power and wealth by adding foreign populations and foreign resources to its own. Given low fertility rates and the difficulty of raising productivity levels by innovation, the quickest and most effective way to boost the overall GDP of a bloc is to add more countries to it. Needless to say, strength based on territorial expansion as well as internal growth was the strategy of past empires. In the modern era, based on the rules of national self-determination and popular sovereignty, incorporation of additional territories by conquest would be resisted as illegitimate. But blocs that are similar to informal empires can be built up by means of security alliances and trade deals, which may be hard to distinguish from de facto colonialism where one partner is a weak protectorate and the other a great or superpower.… [Emphasis mine.]

In a world economy divided among great-power blocs, industries with increasing returns to scale, like manufacturing, are likely to be most productive and dynamic in the blocs with the largest integrated markets—that is to say, the internal markets of populous nation-states and even more populous blocs. Technological and commercial efficiencies enabled by scale can, in turn, permit higher growth, higher per-capita income and the possibility of raising more taxes in absolute terms, even with lower rates of taxation—taxes to be spent on, among other things, the military. This is the successful strategy the larger and richer American bloc used to drive the smaller and poorer Soviet bloc into bankruptcy.

So it makes economic and strategic sense for great powers to expand their blocs and grow their retinue of protectorates. Small and weak nations too gain from admission into great-power blocs.

The exporters and importers of small nations can be guaranteed access to bloc-wide markets and suppliers, and incorporated into bloc-wide supply chains. As de facto protectorates of the bloc’s dominant nations, weak countries can engage in “free riding” when it comes to defense, spending relatively little on the military.

The reference frame immediately solves the mystery of the endurance of the Western alliance. Indeed, the end of the Cold War led not to a dismantling of Nato but rather an American bid to convert ‘hegemony within its Cold War bloc into universal hegemony—turning the entire planet into a single sphere of influence.’ This bid failed ‘thanks to Chinese and Russian resistance and the war-weariness of the American public.’

‘There is not the slightest chance,’ Lind insists correctly, ‘that Chinese and Russian regimes, of any character, no matter how liberal or democratic, will ever accept as legitimate a permanent U.S. military presence along their borders.’ Whether or not Russia’s near-abroad and the South China Sea are turned into contested zones of Cold War-style military standoffs, ‘the division of the world among regional blocs and spheres of influence—will have come to pass.’

There would be neither enduring, widely accepted U.S. global military hegemony nor a rule-governed global free market. Instead, there would be, at least in the short run, a version of the world envisioned by Burnham and Orwell: an American-led “Oceania,” a Chinese “Eastasia” bloc of some kind, and a Russia-centered “Eurasia” much smaller and weaker than the former USSR. Over time, India might join the United States and China as a leading military and economic power, perhaps as the center of its own bloc—let us call it “Southasia.” Populist nationalism within Europe will doom any attempt to turn the continent into a centralized, independent bloc capable of acting as a unit in world affairs. Instead, Europe may remain a U.S. protectorate, drift into neutrality or, in the worst-case scenario, become a “shatterbelt” for which external powers once again compete.

One can quibble with Lind’s position on the European Union. The possibility of a great power based on the continent ought not to be so easily dismissed. But there are bigger issues with Lind’s prognosis.

My main beef is with Lind’s underemphasis on the extreme asymmetry of great power blocs. Russia’s sphere of influence in its near-abroad is a faint echo of the Warsaw alliance. China’s sphere is nearly non-existent. The only country firmly within the Chinese sphere is North Korea. Even Mongolia and the nations of the central Asian steppe are not yet in the Chinese sphere of influence. Meanwhile, the United States has a retinue of some sixty protectorates; including almost all the great industrial nations of the world—Japan, South Korea, Taiwan, Australia, Germany, France, Italy, Britain, and Canada. Moreover, the United States remains the preeminent foreign power in Central America, South America, Africa, Southwest Asia, and Southeast Asia. Even lesser powers that pursue stridently independent foreign policies from Washington—Vietnam, India, Iran, Cuba, Brazil and Venezuela—are likely to seek admission into the US bloc.

Instead of a world ‘divided among great-power blocs’ what we have is a near-unipolar configuration of global alignments. The US bloc militarily, economically, and technologically dwarfs the rest of the world combined. Due to the diffusion of reconnaissance-strike capabilities, the US can no longer impose primacy on China or Russia in their immediate neighborhoods. In particular, China is now in a position to hold all US surface assets in the Western Pacific at risk. In the event of a major confrontation, the US will no longer be able to send aircraft carrier groups to the Taiwan Straits to intimidate China. It will instead have to rely on less effective long-range and undersea platforms to project power.

As China closes the power gap, the exit from the unipolar world approaches. Even in a multipolar world, however, the US bloc would continue to enjoy decisive advantages. Above all, the United States would continue to enjoy maritime primacy until another great power becomes at least somewhat competitive in open ocean warfare. We are so far from that scenario that no other power has even contemplated mounting such a challenge. Because the plumbing of the world economy is sea-based, maritime preponderance gives the US bloc a decisive advantage against other blocs.

A second advantage that is no less decisive is that blocs enjoy network externalities. Beyond the economies of scale, blocs are also containers of technology and situated knowhow. To put it bluntly, the US bloc contains the entire tripolar core of the world economy. From an international politics perspective, these externalities generate a bandwagon effect whereby states outside face tremendous incentives to seek admission into the US bloc. This is why, for instance, Kerry got his opening in Myanmar.

So while I agree with Lind that international politics will become more contested as this century progresses, I seriously doubt that Russia or China will be able to forge a bloc even vaguely comparable to the US bloc. They will definitely try—China’s development bank and the New Silk Route are efforts in precisely this direction—but it will be uphill all the way. Blocpolitik is a useful frame of reference but we should not implicitly endow it with false symmetries.

World Affairs

Trump is Pushing Iran into Russian Arms

The most important consequence of the Bush demolition of the Iraqi state has been the reemergence of Iran as the most influential power in southwest Asia. The core of southwest Asia is now a vast zone of Iranian influence that General Suleimani ominously calls the “Greater Persian Gulf region.” Iran is now the dominant foreign power in Lebanon, Syria and Iraq, and has significant influence in Yemen and Afghanistan as well. With thousands of Iranian troops fighting in the Levant, Iran is projecting its power further west and more deeply than at any time since the peak of Safavid power in the seventeenth century.

Part of the reason is simply that Iran is arguably the most powerful state in the region. Figure 1 shows the distribution of war potential in the Middle East. All data is represented as national shares of selected power resources of the regional powers. Iran has a population of 80 million, a close second to Egypt’s 85 million. Its economy is comparable in size to Turkey’s and Saudi Arabia’s (although the latter is mostly income from oil sales on the global market and is not reflective of national capabilities). Iran has proven oil reserves of 160 billion barrels, second only to Saudi Arabia’s 269 billion. Its endowment of arable land is second only to Turkey’s. Most astonishingly, some 269,000 Iranians graduate with degrees in engineering or the sciences every year compared to just 212,000 in the rest of the regional powers combined.

Figure 1. Distribution of war potential in southwest Asia. Source: CIA, World Economic Forum.

Israel is barely visible in the spider chart of war potential—a major flaw of these metrics. Israel punches dramatically above its weight for a number of reasons. First, Israel is a settler colony of the crème de la crème of Europe. Perhaps as a result of sustained selection on cognitive ability in medieval Europe or the survival effect of the liquidation of the bulk of European Jewry (smarter Jews presumably escaped at higher rates than dumber Jews from the Nazis), Ashkenazi Jews have the highest IQs of any ethnic group ever recorded. Not coincidently, Jewish people are massively overrepresented among Nobel Laureates. Combined with the traditional Jewish emphasis on education (with universal literacy probably as early as the second century CE), the per capita skill-set and knowhow of the Jewish state has no counterpart anywhere else in the world. Second, Israelis are far more willing to fight for the flag—a very important factor in warfighting capabilities since the rise of nationalism at the end of the eighteenth century—than any other nation for obvious historical reasons. Third, like Prussia in the classical European balance of power, Israel’s geostrategic position has led to the development of a highly effective operational art of war that has made it into a modern day Sparta. Surrounded by hostile states and with neither the resources nor the manpower to win long, drawn-out wars of attrition, the militaries of both states cultivated an art of war that sought to front-load conflicts and seek the decisive victory. Fourth, Israel has successfully cultivated a close security relationship with the unipole—in no small part due to the influence of American Jewry. This has given Israel greater access to advanced weapons and military knowhow than any other regional power including Turkey (even though Turkey, unlike Israel, is a member of Nato).

Still, modulo the special case of Israel, Figure 1 provides a good approximation of the war potential of regional powers in southwest Asia. It shows that Iran has the most balanced portfolio of intrinsic power resources in the region. Saudi Arabia, by contrast, is a pure petrostate. Iran’s population is 2.7 times as large as Saudi Arabia’s. It has 5 times as much arable land, 4 times as many graduates, and produces 6.7 times as many engineers and scientists every year as Saudi Arabia. The Kingdom has been able to access and sell—with foreign expertise and knowhow—a much greater portion of its oil deposits and has, as a result, accumulated considerably greater financial resources than Iran.

Saudi Arabia has tried to convert its financial firepower into military might by spending gargantuan sums of money on weaponry. Figure 2 displays the real military spending of the regional powers as well as the real price of crude. (We start the clock in 1971 when the British left and the gulf RSC emerged.) The salafi oil monarchy is by far the biggest military spender in the region. Since 2003, Saudi military spending has grown rapidly along with the price of crude to reach levels dramatically higher than other regional powers.

Figure 2. Military spending by regional powers in southwest Asia. Source: SIPRI.

But it is extremely difficult, if not outright impossible if other ingredients of national power are lacking, to convert financial resources into warfighting capabilities simply by spending giant sums of money. The most important determinants of national warfighting capability are after all the size and skill-set of the populace and its willingness to fight for the flag of the nation-state. The Saudi populace is much smaller, much less skilled, and not nearly as motivated to fight for the flag as that of Iran. This is why a war between Iran and Saudi Arabia will be pretty much a one-sided affair. However, since Saudi Arabia is a US protectorate it is not at risk of being conquered by its stronger neighbor. Due to the presence of the US pacifier, security competition in the bipolar gulf region has instead been projected onto regional playing fields.

The dominant story of the region since 2003 has been the expansion of the zone of weakness. Three hitherto strong states of the region, Iraq, Syria, and Libya, have joined Lebanon, Palestine, Yemen and Afghanistan (the last is on the border of southwest and south Asia) as the playing fields of the regional powers. The regional players are Iran, Saudi Arabia, Egypt, Turkey, and to a lesser extent Israel. Although each regional power has their own particular security interests, the object of the regional game is to secure the orientation of weak states, or if there is no central authority, to secure influence in the polity or security zone by bankrolling and arming local security actors. Even more important than the push factors of regional security competition are the pull factors of sub-state actors seeking patrons. These features are manifest in the Syrian war but are no less true of other parts of the zone of weakness.

Some players are more in demand than others. No one except the Phalangists wants to be caught hobnobbing with the Israelis. Even the Kurds are tight lipped about their security cooperation with the Jewish state. More generally, transnational identities allow states in the region to mobilize opinion across borders. Sunni Arab groups, including many salafi jihadists, look to Saudi Arabia and the other Sunni Arab oil monarchies for support. Shiite actors seek Iranian support. Due to the rise in sectarian temperature—most dramatically as a result of the Syrian war—regional Sunni Arab actors, like the Palestinian resistance groups Hamas and Islamic Jihad, that used to be Iranian clients have pulled back. On the other hand, actors that were barely Shiite, such as the Alawi regime in Syria and the Houthis in Yemen, have become Shitte, and pushed further into Iranian arms. So the rise in sectarian temperature cuts both ways.

this-map-shows-the-brewing-proxy-war-between-iran-and-saudi-arabia

Figure 3. The regional game.

When the Syrian uprising began, Saudi Arabia saw a major opening to wrestle away Syria—a state that is central to the Sunni Arab imaginary—from the Iranian orbit. Weapons, money and fighters poured into the warzone through the Turkish rat line. Much of the flow originated in the oil monarchies and went to salafi jihadist groups such as ISIS, JN and Arhar al Sham. But the Iranian-Hezbollah intervention prevented the fall of Assad. Once the Russians intervened on the regime’s side, the great Saudi dream of rolling back Iranian influence in the Levant became tenuous. With the fall of Aleppo to the regime’s forces, all such hopes were dashed.

Meanwhile, the US-Saudi puppet in Yemen had been displaced by the Houthis with the support of the former Yemeni president (a Sunni). Saudi Arabia’s aggressive young leader Mohammed bin Salman al Saud (MBS), responded by launching an air war with the logistic and diplomatic help of the Obama administration. There was a lot of brouhaha about Iranian influence in Yemen; Saudi Arabia’s backyard. But Iranian influence was always more imagined than real. The Houthi political movement, in fact, enjoyed broad-based, cross-ethnic support and was neither simply a Shiite group nor an Iranian proxy. The main consequence of the Saudi terror campaign in Yemen was to give a boost to Al Qaeda in the Arabian Peninsula (AQAP), one of the most dangerous and capable salafi jihadist groups in the region. (Yemen was not the only place where the main result of Saudi meddling was to strengthen salafi jihadism.)

Lost in the regional narrative was a potential gamechanger. This was an alliance between Russia and Iran—something that has never obtained ever before in history. Even though both were simply fighting together to save the Assad regime and there were no plans for a broader alliance, there was always the potential for one. The Obama administration was smart enough to know that it would not be in the US interest if Iran acquired a rival great power patron. (Obama went so far as to say that the Saudis and the Iranians would have to “share the region.”) As long as the United States could keep the door ajar just a little bit, Iran had more to lose from defying the Western alliance than gaining a great power patron.

In this trip, Trump has slammed the door in Iran’s face. It may further the interests of the oligarchs connected to the Trump White House. But it makes no sense in terms of US interests in the region. We should not be surprised if Iran gets closer to Russia and the Ruskies extend their influence in the Middle East as a result. I am not suggesting that this is a certainty. Russia has so far pursued defensive and limited aims—basically shoring up the Assad regime. But that is no guarantee that the Kremlin will not exploit this opening.

There was something deeply shameful about Trump declaring Iran to be a sponsor of terror whilst standing in the heart of terror finance; entirely bogus claims based on Iranian patronage of Hezbollah and Hamas, which for all their Islamic rhetoric are nationalist resistance groups; not Islamic terrorists. Islamic terrorists, like the one who murdered young kids in Manchester this week, are without a single exception salafi jihadists who are bankrolled by financiers in the permissive jurisdictions of the gulf oil monarchies that Trump just declared his eternal love for. In fact, Iran is the one Muslim power that is guaranteed to be an ally against salafi jihadism. If the United States was serious about tackling salafi jihadism, the place to start is to put the oil monarchies is a financial straightjacket—all financial flows out of the gulf ought to monitored by a terror finance task force set up by Western intelligence agencies.

It’s too easy to blame the Trump administration for following policies that are so manifestly against the US and Western interest. The truth is that the blame lies on a broad swath of the foreign policy community—including Democrats. Somehow the debacles of the Bush administration have failed to kill the rogue states doctrine that is at the root of America’s failed foreign policy.

Thinking

Gary Johnson and the Case for Isolationism

gary-johnson

Gary Johnson’s humiliation (“What is Aleppo?”) at the hands of Mike Lauer of NBC has gone viral. Johnson’s remarkable ignorance of foreign affairs is widely seen as disqualifying. This is not an unreasonable judgement but I will argue that it is mistaken. The knowledge and sophistication of the President herself is of secondary importance. What matters first and foremost is the nation’s grand strategy.

The Libertarians, including and especially Johnson (“No more policing the world”), are Isolationists. Because Isolationism has been demonized for decades Libertarian political entrepreneurs try very hard to avoid the label. But that is also mistaken. Isolationism is and will always remain a viable and attractive grand strategy for the United States.

A grand strategy is a state’s core formula for survival and security in a dangerous world. It serves as the organizing principle of foreign policy. Great Britain’s nineteenth century grand strategy was to maintain maritime primacy and act as an offshore balancer on the Continent. Bismarck’s grand strategy in the 1870s and 1880s was to ensure that Germany was always in a “party of three” among the five great powers. Both grand strategies were informed by the geopolitical positions of the state and were thus very effective.

The first fundamental fact about the United States’ geopolitical position is that vast oceans separate the United States from all other great powers. Because of ‘the stopping power of water,’ even if the United States were not the strongest state in the system it would continue to remain extraordinarily secure. The second fundamental fact about the US’ geopolitical position is that it has been the strongest state in the system for over a century.

Because of these fundamental geopolitical facts, the United States enjoys extraordinary leeway in choosing its grand strategy. Unlike any other great power in the system, the United States can choose its level of strategic engagement outside its home region. Different grand strategies correspond to different levels of strategic engagement. Put another way, the United States can choose to define its national interest more and less expansively and deploy its considerable power resources accordingly. There are five main grand strategies available to the United States which can be ordered by the level of engagement:

Pure Isolationism: US forces would be withdrawn to the US homeland. And the United States would strategically disengage from the rest of the world (incl. S. America) leaving it to other powers to sort it out. It would continue to interact with the rest of the world economically and culturally but not in the security sphere. Instead it would husband its own strength.
Hemispheric Isolationism: The US defense perimeter would be withdrawn to the middle of the Atlantic and the Pacific; thus strategically isolating the western hemisphere. The US would maintain preponderance in the hemisphere but avoid security interactions with Eurasia unless the western hemisphere is threatened.
Offshore Balancing: The US would maintain global maritime primacy and prevent other great powers from replicating its feat of achieving regional preponderance. In practice, this means that the US would strive to maintain a favourable balance of power in the two extremities of Eurasia. However, US forces would not be deployed on Eurasian land unless they were necessary for deterrence (as was the case in Europe during the bipolar era). It would also ignore weak states unless there was a clear threat.
Defensive Hegemonism: The United States would play the role of the global policeman. It would take it upon itself to defend the territorial order by the force of its arms; identifying its national interest with the stability and security of the international system. It would seek to contain near peers and grow its retinue of protectorates. US forces would be deployed across the world for deterrence and enforcement of rules multilaterally when it can and unilaterally when it must.
Offensive Hegemonism: The United States would play the role of the global policeman. But instead of simply defending the territorial status quo by the force of its arms it would seek to forge a more favourable international order. It would in effect act as a revisionist hegemon, seeking to “roll back” near peers instead of containing them, and conquering and reconfiguring weak confrontation states where possible.

In accordance with Parkinson’s law of international politics, the definition of US national interest has expanded along with its relative power. In the first century of its existence, the United States followed the strategy of Pure Isolationism. During the 1890s the US shifted to Hemispheric Isolationism. In the short twentieth century (1915-90), the United States deployed military forces in Eurasia to defeat and contain a sequence of potential regional hegemons (Imperial Germany, Imperial Japan, Soviet Union) and sought and achieved maritime primacy in accordance with Offshore Balancing. With the capitulation of Soviet Russia and the advent of the unipolar world, the United States has lurched back and forth between Defensive Hegemonism and Offensive Hegemonism.

Pure Isolationism is not a viable grand strategy for the United States; nor has it ever been entertained as such since the United States emerged as a great power. It would mean the end of the Monroe Doctrine; something that is unlikely to be on the table for a very long time. Offensive Hegemonism is also no longer on the table since it is widely seen to have been tried and failed. The lesson that US policy elites have learned from Iraq and Afghanistan is that the costs of stability operations are simply incommensurate with the expected gains. As former Defense Secretary Robert Gates put it:

Any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should have his head examined.

We are thus left with (Hemispheric) Isolationism, Offshore Balancing, and (Defensive) Hegemonism. Loosely speaking, Libertarians prefer Isolationism; Realists prefer Offshore Balancing; and Liberals (esp. beltway foreign policy wonks) prefer Hegemonism.

The Policy Tensor prefers Offshore Balancing but that is not because Isolationism is not viable. Isolationism has the virtue of being cheap. Bringing the boys home would allow the United States to cut its wasteful defense spending. More importantly, the United States would entirely avoid meddling in weak states (which is also true of Offshore Balancing). And perhaps most importantly, it would remove a major driver of friction with other great powers.

A key issue in the coming years is whether a rising China should be contained or accomodated. In particular, Whether, and if so when, the United States should surrender maritime primacy in the Western Pacific. Isolationists would argue that even if China were to become preponderant in Asia, it would not threaten the United States. And this is indeed the case if US national security interests are defined exclusively in terms of the defense of the homeland, which would remain protected even after the exit from unipolarity as a consequence of the insularity of the US homeland and strategic nuclear deterrence.

If however, continued prosperity and international influence are seen as vital US national interests, then Isolationism would likely fail to achieve it. In particular, US access to world markets and resources would be subject to the veto of other great powers who would take the place of the United States in the game of world power. The Isolationists would counter that the United States would not suffer very much at all even if China became the dominant power in Asia because the United States would remain a very attractive trading partner and source of technology and innovative ideas. That depends on the state of the world. If the United States poses no threat to other great powers, they may be willing to grant it access to world markets. If they see the United States as a potential threat, they may not. In either case, the United States could easily survive but it might be poorer and marginalized.

The fundamental issue then is whether global influence is a vital interest of the United States. Isolationists argue that global power and influence are unnecessary and probably immoral. I don’t agree with it but is a consistent and ethical position. And it should be up to the American people to choose. The American people have in fact long been denied this choice. I therefore hope that Gary Johnson makes it to the debates.

World Affairs

The Plot to Kill President George H.W. Bush

Source: New Yorker

THE ROAD to the Iraq War began not with 9/11, nor with Bush’s election, nor even with the Project for the New American Century. It began instead with the capitulation of the Soviet Union.

Once it became clear that the Cold War adversary was going to knuckle under, the US military became extremely worried about the political sustainability of the military budget and the forward deployment of US forces around the world. For without the Communist threat, how was the US taxpayer to be persuaded to pay for garrisoning the planet? The solution that was hit upon—as early as 1988—was to inflate the threat posed by confrontation states. The idea began with talk about the “military sophistication of Third World dictators,” later morphing into the need to confront “outlaw states,” “backlash states,” and the one that really stuck: “rogue states.” The rogues’ gallery included Iran, Syria, Libya, Cuba, and North Korea. But the poster child was unambiguously Iraq, in light of Saddam’s impressive record of military aggression, chemical weapons use, and human rights abuses.

For twelve years between the two wars, a considerable portion of US diplomatic and military muscle was deployed towards the containment of Iraq; featuring not only the most brutal trade embargo in history, but also the imposition of no-fly zones over northern and southern Iraq and the de facto partition of the country; thousands of airstrikes and cruise missile strikes; and covert operations to topple Saddam Hussein. This low-intensity war on Iraq was supported by a bipartisan consensus in the United States on the threat posed by Saddam to US security interests. So when W looked to reconfigure the Middle East by force after 9/11, Iraq under Saddam offered the path of least resistance.

But the consensus did not emerge overnight. In fact, early in the Clinton administration there were significant moves towards a thaw in US-Iraq relations. The week before he took office, Clinton gave a wide-ranging interview on foreign policy in which he mused that he was not “obsessed” with Saddam.

REPORTER: But you don’t take the view that there can be no normal relations with this man or with Iraq as long as he is in power?

CLINTON: Based on the evidence that we have, the people of Iraq would be better off if they had a different leader. But my job is not to pick their rulers for them. I always tell everybody, “I’m a Baptist; I believe in deathbed conversions.” If he wants a different relationship with the United States and with the United Nations, all he has to do is change his behavior.

It was, of course, politically trecherous for a Democrat in the White House to back-off from confronting a brutal dictator that the men and women in uniform had fought not too long ago. The administration was not on the verge of bringing in Saddam from the cold, “if for no other reason,” opined Leslie H. Gleb in New York Times, than that “they know this would mean political suicide.” Still, signs of hope continued to flicker. The Pentagon said on February 3 that the Iraqis “had changed their behavior.” In mid-February, Saddam reached out to Clinton for a reset, and went out of his way to cooperate with UN inspectors. By the end of March, Clinton was saying he wanted to “depersonalize” the conflict with Iraq. New York Times reported on March 29, 1993, that

The United States and Britain have begun to move away from their insistence that the trade embargo against Iraq cannot be lifted while President Saddam Hussein remains in power.

But these early moves towards bringing Saddam back in from the cold came to naught when a plot to kill President George H.W. Bush, allegedly masterminded by Iraqi intelligence, came to light in May. The break in diplomatic momentum towards a thaw in relations was immediate and permanent. The plot therefore marked a decisive moment in the long road to the Iraq War.

THE ALLEGED Iraqi plot against Bush was in reality a fraud perpetrated by the Kuwaitis, who had been watching the emerging thaw in US-Iraq relations with increasing panic. Kuwait had arrested 17 drunk bootleggers near the Iraqi border for smuggling whiskey; a serious crime in Kuwait but a common enough practice along the Saudi-Iraqi-Kuwaiti border.

Four days later, one of the bootleggers suddenly confessed to a conspiracy to kill President H.W. Bush during the former president’s visit to Kuwait that was underway. The confession was later retracted in court and the defendant alleged that it was extracted under duress. As a consequence of the confession, the Kuwaiti police said they were able to locate a two-hundred-pound bomb in the suspect’s vehicle that had been in their custody for four days. The Kuwaiti foreign minister alleged that the defendant was a Iraqi intelligence officer and had been ordered by Saddam to assassinate President Bush.

But the Kuwaitis were not exactly known to be reliable. Kuwait had earlier moved the UNSC alleging a territorial violation by Saddam that turned out upon investigation to have been a violent dispute between smugglers. As for the foreign minister himself: His daughter had given an eloquent testimony to Iraqi crimes involving the killing of babies during the Iraqi occupation that later turned out to be fraudulent.

Still, in light of the serious nature of the allegations, the White House tasked the FBI and the CIA to investigate the matter. While some hawks in the White House, including Sandy Berger and Martin Indyk, were claiming that there was highly reliable evidence tying Iraq to the plot against Bush, official White House policy was to wait for the investigations to reach a conclusion. “We’re still in the middle of the investigation,” said George Stephanopoulos, the White House Communications Director. President Clinton himself was skeptical of the case; as was the Attorney General, Janet Reno.

But in May and June, a number of reports in the Washington Post and the New York Times, citing anonymous officials (probably Indyk), claimed that there was strong evidence pointing to Iraqi sponsorship of the assassination attempt. By late June, the President had lost all control of the media narrative. Finally, on June 24, the FBI report came out and provided what the White House considered to be sufficient evidence of Iraqi complicity. Clinton ordered a barrage of 23 cruise missile strikes on the headquarters of Iraqi intelligence—to near-universal applause in the media. On that day, any possibility of bringing Saddam in from the cold vanished into thin air.

Seymour Hersh’s report debunking the government’s evidence appeared in the November 1, 1993 issue of the New Yorker. A big part of the forensic evidence tying the bomb to those known to have been put together by Iraqi intelligence, outlined by Madeline Albright, was that the remote-control firing device found in the Kuwaiti car bomb has the same “signature” as previously recovered Iraqi bombs. Hersh spoke to a number of forensic bomb experts.

[All seven experts] told me essentially the same thing: The remote-control devices shown in the White House photographs were mass-produced items…

The fact that the two devices were similar is simply not that significant, I was told by Donald L. Hansen, a twenty-eight-year veteran of the bomb squad of the San Francisco Police Department, who has served as the director of the International Association of Bomb Technicians and Investigators… and is widely considered to be one of the top forensics experts in the field. “They’re very generic devices… If these circuit boards are what they’re hanging their signature issue on, they’re really stretching the envelope.”

The FBI also concluded that the defendants were not coerced after their arrest, despite their testimony in court that they were indeed beaten and forced to confess. The only American reporter at the Kuwaiti trial, Miriam Amie, reporting for the German news agency DPA, told Hersh that the main suspect, Wali al-Ghazali, showed up on the first day of the trial with “a fresh scar on his forehead and a blackened nail on his thumb.” James E. Akins, former US Ambassador to the Saudi Arabia, told Hersh:

Either the investigators were idiots or they were lying. It boggles the imagination. There’s no way the Kuwaitis would not have tortured them. That’s the way the Kuwaitis are, as anyone who knows the Kuwaitis or the Middle East can tell you.

Meanwhile, back on May 23, 1993, Boston Globe reported that it had obtained a copy of the CIA Counter Terrorism Center’s report concluding that the alleged plot was a Kuwaiti fraud.

Kuwait, the report says, “has a clear incentive to play up the continuing Iraqi threat” to Western interests, and hence may have “cooked the books.”

To support this contention, it cites US diplomatic reports earlier this year that the Kuwaiti government was expressing “frustration” that the Western coalition was not taking a tougher line against Saddam Hussein and concern that the Clinton administration might abandon Kuwait in favor of better relations with Iraq.

Usually rabbit holes have a way of ending with Seymour Hersh’s reporting. Not this time. The FBI’s forensic investigation in the alleged Iraqi bomb plot was led by Frederic Whitehurst, a forensic chemist specializing in explosive residue analysis, described by the New York Times as the agency’s “top bomb-residue expert,” who provided expert testimony in the O.J. Simpson trial among many other high profile cases. He later became America’s first FBI whistleblower exposing extensive forensic fraud at the FBI crime lab.

During the investigation into alleged misconduct at the FBI crime lab it emerged that Whitehurst’s superior, J. Christopher Ronay, had misreported Whitehurst’s findings in the alleged Iraqi plot to kill Bush. The 1997 DOJ enquiry reported that,

Whitehurst alleges that he compared the explosive material in the main charge of the Bush device to explosive materials in known Iraqi devices and told Explosives Unit Chief J. Christopher Ronay that the explosives were different. Whitehurst claims that Ronay purposely misinterpreted these results in order to link the explosive material to Iraqi agents. Whitehurst further asserts that very possibly his results were changed to support the retaliatory missile strike by the United States.

Neil Gallagher, Chief of the FBI Counter Intelligence Section, told the DOJ that

The FBI could not connect these explosives chemically or say that they came from the same shipment, sources, or country.

Yet, the DOJ enquiry continues,

Subsequent reports on the matter tended to ignore such chemical differences. Moreover, even after the missile strike, the FBI and CIA continued to report simply that PE-4A plastic explosive had been identified in the Bush device and other Iraqi explosive devices, including those from Southeast Asia.

Thus: The FBI misreported the findings of the agency’s top bomb residue expert, mistook the congruence of mass-produced remote-control firing devices as the signature of a common Iraqi source, and took confessions extracted from suspects using torture at face value. Meanwhile, the CIA’s accurate conclusion that the plot was a Kuwaiti fraud was simply ignored. Hersh again:

When Clinton finally acted, on the afternoon of Saturday, June 26th, he was not leading the nation, as was widely assumed and reported, but merely following the path of least bureaucratic and political resistance.

World Affairs

A Confession of Sorts from Saudi Arabia

Saudi Arabia has threatened the United States with grave consequences if lawmakers were to pass a bill revoking part of a 1976 law that gives foreign nations some immunity from lawsuits in American courts “in cases where nations are found culpable for terrorist attacks that kill Americans on United States soil.”

The Saudi threat amounts to a de-facto confession that Saudi officials or princes had ties to Al Qaeda at the time of the September 11, 2001 attacks. Why else would they panic and issue ultimatums? Even if it was not senior officials and just some energetic royals, they might have good reason to worry. US courts could be persuaded that senior princes are part of the Saudi monarchical state—there is surely legal precedent from the nineteenth century.

After Saddam’s invasion of Kuwait in 1990, bin Laden met with King Fahd and offered to raise a mujahideen army to defend Saudi Arabia. The monarch rebuffed his offer and instead accepted a deployment of US forces (Operation Desert Shield). It was at this point that bin Laden turned on the Al Saud, against whom he raged for two years before being exiled to Sudan. But there is some evidence to show that Saudi intelligence continued to maintain contacts with Al Qaeda during the mid-1990s. The question is: Did this relationship last into 2001 and beyond?

A priori, it seems unlikely that there was active support for Al Qaeda at the official level and in the upper echelon of the Saudi royalty circa 2001. But then, why the panic?

On the related, broader question of support in Saudi moneyed circles for Al Qaeda, and more generally, salafist jihadism, there is no doubt whatsoever. It is very well-understood that the bulk of the money powering global jihadism originates in the gulf monarchies, in particular, the Kingdom of Saudi Arabia.

Global jihadism does not grow in a vaccum. It is intrinsically tied to salafism. Indeed, global jihadism is synonymous with salafist jihadism. And it is here that one finds the real challenge posed by Saudi Arabia. For the Kingdom is the principal propagator of salafi ideology worldwide.

The Saudi state has invested its vast oil wealth, and utilized its pivotal position as the host of the annual Muslim pilgrimage, to promote a vicious ideology that combines Sunni supremacism with puritanical fanaticism. The ideology demands a return to the version of Islam practiced under the first four caliphs. That is, it demands a return to the practice of the Jihad-State at Medina, before the caliphate moved to Damascus (and presumably got corrupted).

The innovation of the salafist jihadists is merely to point out the essential incompatibility between the Saudi state ideology and its de-facto alliances with the near, Zionist enemy and the far, Crusader enemy; and therefore to demand armed revolt instead of obedience to the Al Saud. This is an argument that the Al Saud are quite possibly rigged to lose. Indeed, if there is a state that is not already engulfed in a civil war that is at risk of being overrun by ISIS, it is Saudi Arabia. No one is more at risk; not even Pakistan.

As for the Saudi threat to sell their hoard of US Treasuries. First of all, Saudi Arabia does not have $750 billion as the paper of record alleges, it has slightly less than $600 billion in reserves. Second, if the Saudis were to dump all $600 billion in Tbills, it would not make much of an impression: It would amount to less than 1 per cent of total dollar credit outstanding (about $60 trillion). Even as a share of daily funding in the wholesale market (about $4 trillion onshore and an even larger amount offshore), it would be a drop in the bucket. At best, it would make for an interesting day in global money markets.

Third and lastly—and this one is the kicker—it would be outright beneficial to the global financial system which has had a structural shortage of Tbills for years! Indeed, it would bring down the premium now being paid for Tbills in Europe. Figure 1 shows euro/dollar cross-currency basis swap spreads which capture the liquidity premium. (When they fall below zero it implies that there is a shortage of Tbills.)

Figure 1: Euro/USD cross-currency basis swap spreads (Source: ECB).

The bigger issue at stake here is the future of the US-Saudi relationship. It is time to go back to basics: It is in the US interest to protect the Kingdom from external aggression. But it is not in the US interest to go along with the Al Saud’s regional adventures (re Yemen). And it is certainly not in the US interest to watch the Saudis propagate their vicious ideology worldwide. The United States needs to stand firm on these issues. To that end, Congress should pass the 9/11 bill and the Obama administration should shelve its ill-thought opposition to the same.

World Affairs

A Dangerous Inflection Point in the Syrian War

Tensions between Russia and Turkey have escalated dramatically in the past few weeks, so much so that direct military confrontation cannot be ruled out.

Under the cover of Russian air power, Assad’s forces have almost completely encircled Aleppo. Assad plans to repeat the siege-and-starve tactic he followed to regain control of Homs City is May, 2014. The coming siege has prompted some 150,000 residents to flee towards Turkey, which has closed its border to the refugees.

US-backed Syrian Kurds are hoping replicate the achievement of the Iraqi Kurds and forge a statelet along the Syro-Turkish border. YPG forces exploited the opportunity opened up by regime gains north of the city to seize territory held by Turkish-backed rebels near the border, including the Menagh Airbase. Ankara responded by shelling their positions; ignoring US calls for restraint. Moscow has been effectively supporting the YPG by conducting airstrikes on non-Kurdish rebels in the region.

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Aleppo City is held by a motley collection of some fifty odd Turkish, Saudi and Qatari-backed rebel groups. Most of these groups are no more than neighborhood militias with dozens or hundreds of fighters. The biggest is Turkish-backed salafist outfit Ahrar al-Sham, which has tens of thousands of fighters and controls the strategically important Bab al-Hawa crossing, the only remaining line of communication into Aleppo.

Ahrar competes with Jabhat al-Nusra (JN) for leadership of the Aleppo rebels. JN controls the main water and power plant in the city and enjoys a degree of leverage over other groups. It has disarmed and absorbed at least three US-backed groups in the past year.

Both JN and Ahrar have a significant presence outside the city and are likely to survive and perhaps even make strategic gains as a result of the siege. Other US and Turkish-backed groups are at risk of annihilation and absorption by the big two. The same goes for the Saudi-backed Jabhat al-Shamiya and Jaysh al-Mujahideen.

That the loss of Aleppo would be a turning point in the proxy war is not lost on the Saudis. Mohammad bin Salman, the 30-year-old Deputy Crown Prince and Defense Minister, is “willing to take military, financial and political risks in order not to fall behind in regional politics,” according to German intelligence.

The Kingdom’s aggressive new foreign policy was on display in Yemen, where the Saudis rashly intervened to push the Houthis back to the hills and restore their man to the helm. It is on display again in Syria: Riyadh is deploying fighter jets to the southern Turkish airbase of Incirlik.

Turkey is considering a military intervention in northern Syria. This is not because Ankara has any illusions that it can put up a fight with Russia, with or without Saudi help. Turkey is counting on Article V of the North Atlantic Treaty which states that “an attack on one Ally shall be considered an attack on all Allies.” In other words, Turkey may be betting that the United States will deter Russia from directly attacking its Nato ally.

The situation is starkly similar to the July Crisis. Back then, German guarantees prompted Austria to attack Serbia, a Russian protectorate. Today, US guarantees may prompt Turkey to attack Syria, a Russian ally.

It is time to diffuse this dangerous confrontation. It would be extremely damaging to US credibility to back-off after the event. On the other hand, unlimited guarantees to Turkey could embroil the United States in a major military confrontation with Russia that would serve no conceivable US interest. The US needs to inform Turkey post-haste that the United States is not going to war to protect Turkish interests in Syria.

World Affairs

A Decade of War

The theme of the Nov/Dec 2014 issue of the semi-official periodical Foreign Affairs published by the Council on Foreign Relations, is the lessons that the United States ought to learn from its wars in Iraq and Afghanistan. This is a supremely important exercise for America’s foreign policy elite. The result, unfortunately, is disappointing. In what follows, I will first describe what the five contributors argue. All of them, as well as the editors, agree that the wars have been unambiguous disasters. But none of them have tried to grapple with the bigger questions raised by this debacle. Why did the United States launch on such a misguided adventure in Iraq, a nightmare from which we are very far from waking? How did it come about that there was such widespread support—in the beltway and the foreign policy community—for such a fool’s errand? Why did the warnings of realists—not to speak of anti-war radicals—go completely unheeded in the rush to war? These fundamental questions are largely ignored in the issue.

In his essay, “More Small Wars: Counterinsurgency is here to stay,” Max Boot is still peddling his book, The Savage Wars of Peace: Small Wars and the Rise of American Power. Boot argues that whether it likes it or not, the United States will find itself in many more small wars or pacification campaigns in the decades to come. “Since Washington doesn’t have the luxury of simply avoiding insurgencies, then, the best strategy would be to fight them better.” He proceeds to recount the lessons that emerged from his study of the hundreds of small wars carried out by Britain and the United States over two centuries. These lessons are of the management literature type: plan for the peace, revaluate strategy, train forces for counterinsurgency missions, learn the language of the occupied, send a sufficient number of troops, have patience, and so on and so forth. One thing that he failed to consider in the book and which is also conspicuously absent in his essay is precisely how the United States stands to gain by fighting small wars at all.

Richard K. Betts is the most reasonable. His first-order lessons sit well with the present author, even though he mixes tactical questions with strategic ones:

First, the United States should fight wars less frequently but more decisively, erring, when combat is necessary, on the side of committing too many forces rather than too few. Second, the country should avoid fighting in places where victory depends on controlling the politics of chaotic countries, since local politicians will rarely do what Americans want when that differs from their own aims. And third, Washington should give priority to first-order challenges, focusing its military planning on fighting wars with great powers and focusing its diplomacy on preventing them.

Deterring aggression by other great powers is the biggest—if largely unacknowledged—achievement of US foreign policy since World War II. The United States prevented the Soviet Union from dominating Eurasia. It made sure that Germany and Japan were defanged, and threatened nobody. As China emerges as a powerful force in Asia, American protection has reassured China’s worried neighbours. On the other hand, America’s efforts to impose itself on minor powers and small states—from Indochina to the Middle East—have largely failed. This is because American power is well-suited for deterring great power adversaries and ill-suited for pacification campaigns. When Boot says the US military should focus on training for counterinsurgency operations, he is wrong. The United States cannot sacrifice combat effectiveness and divert scare resources away from preparing to fight great power adversaries. This is simply because maintaining a favourable balance of power is the United States’ primary strategic interest. As Betts puts it, “the United States needs to temper the ambitions unleashed by its post–Cold War dominance, not only in reaction to the setbacks it has experienced in small wars but also to prepare for bigger wars for bigger stakes against bigger powers.” If swatting flies in the muck is sapping the strength of the US military, the United States should simply stop patrolling the marshes.

Daniel Byman and Jeremy Shapiro (“Homeward Bound?”) are not drawing any lessons from the wars. I have no clue why their essay is included in this section. Their concern is to evaluate the risk of radicalized Westerners now fighting for the Islamic State returning home and unleashing terror. They argue that this is a manageable threat (since it is quite easy to flag the returning jihadists) and there need be no panic about it.

Rick Brennan (“Withdrawal Symptoms”) complains about the Obama administration’s failure to reach a status-of-forces agreement with Baghdad. He points out that the reason why the negotiations failed was because the administration insisted on legal immunity for all US forces in Iraq, something that was politically impossible for any Iraqi government to accept after the Blackwater massacre. Brennan claims that Iraq’s descent into its current nightmare was foreseen with “eerie accuracy” by the military. Specifically, a 2010 internal assessment concluded that in the event of a American pullout, “the central government in Baghdad would become ever more corrupt, sectarian, and acquiescent to Tehran, setting the stage for a revival of the Sunni insurgency, a resurgence of AQI, and the end of the relative stability that the United States had worked so hard to foster.” The same thing, Brennan claims, is happening now in Afghanistan where the Obama administration is planning to pull out all American troops by 2016.

Peter Tomsen reviews three new books on the “forgotten war” in Afghanistan. The most interesting of these is Carlotta Gall’s The Wrong Enemy, wherein she documents Pakistan’s double game of “public support and private official assurances that Pakistan is allied with the United States and NATO, but clandestine ISI support for radical Islamist terrorism.” Citing an “inside source,” Gall goes so far as to claim that not only was Pakistani intelligence aware of bin Laden’s whereabouts, the ISI “ran a special desk” to handle bin Laden. [More on it when I’m done reading the book.] Tomsen shows that Afghanistan is headed towards calamity, with possibly a full-scale return of the Taliban when the US departs. He argues that it is high-time to arm-twist Pakistan. Specifically, the US should do three things:

The United States should designate the Afghan Taliban as a foreign terrorist organization, which would result in financial sanctions against banks and other institutions in Pakistan that the group relies on for funding. Then, Washington should make clear that U.S. military aid to Pakistan will end if Islamabad does not shut down the ISI’s terrorist proxies. Finally, Washington should warn Islamabad that if Pakistan continues its support for extremists in Afghanistan, the United States might designate Pakistan as a state sponsor of terrorism—a move that would produce severe economic, political, and diplomatic consequences for Pakistan.

Brennan’s assessment, shared by Tomsen—that US forces ought to stay till the dependent state can manage its own affairs—reinforces the case against small wars. If the United States cannot leave until the nascent state can survive by itself, this significantly increases the ex ante cost of pacification campaigns. But whether or not the United States should fight small wars is not a question of costs alone. The most important question raised by these failures is nowhere to be found on the pages of Foreign Affairs. When should the United States fight small wars? This is not rocket science—the answer is straightforward. America should only fight small wars when it has a vital interest at stake that cannot be achieved by any means short of war. Small states are of little consequence to America’s standing in world affairs. As a rule, small wars invariably sap the strength of great powers instead of enhancing their power position. Given the high costs and dubious gains of small wars, the United States is best off undertaking them only in the most extreme of circumstances. For instance, the Islamic State is arguably a case that requires the deployment of US ground forces. The threat to American security is unambiguous. Airstrikes are incapable of doing the job. And regional players are either incapable or unwilling to destroy the Islamic State. Even though there is little appetite in America for a ground war, the alternative—a salafi jihadist state in the heart of the Middle East—is even less appetizing.

By spilling the blood of tens of thousands of Muslims, America’s Iraq debacle inflamed anti-American sentiment in the Middle East, thereby making it a fertile recruiting ground for Islamist radicals. Thousands of American troops have returned in coffins, and tens of thousands have been crippled. The war cost American taxpayers trillions of dollars. Yet, no vital American interest in Iraq had ever been identified. Moreover, even America’s military capability has suffered as a consequence. It is no longer in a position to fight in two regional campaigns simultaneously—the gold standard of the US military. Furthermore, American prestige has suffered a lasting damage. For instance, Iran no longer fears an American invasion aimed at regime change. Iranians know that America will not be landing a large land army in Eurasia any time soon. The threat of the use of force is considerably more useful than the use of force itself.

What this issue of Foreign Affairs shows is that the mandarins at the Council on Foreign Relations have failed to consider the most important questions raised by the decade of war. If there is any soul-searching in the foreign policy community, there is no sign of it. For the most fundamental question that arises in the aftermath of Iraq is this: How did the foreign policy community fail to see the obvious? Namely, that no conceivable US interest could be secured by removing Saddam and taking up the task of pacifying Iraq. Elsewhere, I have grappled with this question. The answer that emerges is not pretty. Basically, Saddam came to play a central role in the formulation and justification of a muscular US foreign policy—the “rogue states doctrine”—in the aftermath of the collapse of the Soviet Union. In the twelve years between the Gulf War and the Iraq War, Saddam became a litmus test for beltway insiders and foreign policy elites to prove their cred. With the neocons firmly in the saddle, the United States launched an ill-considered policy to reconfigure the Middle East by force. When Bush went after Saddam he was following the path of least resistance in the domestic political economy of US foreign policy. The foreign policy elites offered little resistance because they had long-ago lost sight of realism.