Quote of the Month
“Somewhere in the world there is defeat for everyone. Some are destroyed by defeat, and some made small and mean by victory. Greatness lives in one who triumphs equally over defeat and victory.” - John Steinbeck, The Acts of King Arthur and His Noble Knights, p. 50
My Recent Writing:
What I’m Reading:
1. Why Vladimir Putin has no red lines
Why you should read it: In the New York Times, International Institute for Strategic Studies senior fellow Nigel Gould-Davies argues that talk of “red lines” - particularly with regard to Russian President Vladimir Putin - obscures more than it clarifies and leads to bad strategy to boot.
“‘Red lines’ implies there are defined limits to the actions that a state — in this case, Russia — is prepared to accept from others. If the West transgresses these limits, Russia will respond in new and more dangerous ways. A red line is a tripwire for escalation. Western diplomacy must seek to understand and respect Russia’s red lines by avoiding actions that would cross them. Russia’s red lines thus impose limits on Western actions… In truth, red lines are nearly always soft, variable and contingent, not etched in geopolitical stone. While national interests, as Henry Temple, Viscount Palmerston, said, may be eternal, the way they manifest themselves as specific commitments will reflect temporary, shifting circumstances — among them, relative power, perceptions of threat, domestic calculations and wider global trends. Diplomacy should therefore seek not to avoid an adversary’s red lines but to change them.”
“Concerns about Russia’s red lines are driven, above all, by the fear that Russia might resort to nuclear escalation. The West should avert this by deterring Russia rather than by restraining itself — or pressuring Ukraine to do so — for fear of provoking Russia. It can do so by communicating the certainty of severe consequences should Russia use nuclear weapons. Russia has tried and failed to impose red lines with nuclear threats several times since the war began — most recently in November, when Ukrainian forces liberated Kherson just six weeks after Vladimir Putin had declared it part of Russia. Ukraine and the West rightly rejected these bluffs and should continue to do so.”
Why it matters: “While the danger of Russian nuclear escalation may rise and should be studied carefully, there is no special, separate category of actions that the West or Ukraine might take that would automatically trigger it. Russia has no red lines: It has only, at each moment, a range of options and perceptions of their relative risks and benefits. The West should continually aim, through its diplomacy, to shape these perceptions so that Russia chooses the options that the West prefers… Mr. Putin was not given an offramp then [at the start of the war], and he should not be allowed to define the limits of Western policy now. Strategy needs rigorous thought, not lazy metaphors.”
2. How America turned its back on the battle of ideas after the Cold War
Why you should read it: At American Purpose, David Lowe contends that the much-maligned Congress for Cultural Freedom “can still serve as instructive models for conducting the long war of ideas against authoritarian and anti-democratic challenges that we face today.”
“By 1947, the Soviets had more than a twenty-five-year head start in conducting an ideological offensive against the West. At a time when there was still widespread opinion both in the United States and in Europe favorable to Russia in view of the role it played in defeating Hitler at massive human and economic cost, Stalin had already been spending tens of millions of dollars to seduce leading Western intellectuals—the opinion-formers of the day—with comforting ideas about peace and disarmament… The CIA’s Office of Policy Coordination found an opportunity to counter Soviet propaganda by funding civil organizations, such as the Congress for Cultural Freedom. Founded in the immediate aftermath of the Soviet blockade that occurred at the height of tensions in 1950, the Congress for Cultural Freedom was an association of leading Western intellectuals of the anti-Stalinist Left who were committed to fighting Communist ideology. American philosopher Sidney Hook was its principal founder, along with young American veteran and German-language journal editor Melvin J. Lasky. The CCF counted among its shining lights the Hungarian-born author Arthur Koestler, the French political thinker Raymond Aron, and the Italian novelist Ignacio Silone. The CCF’s aim, as pointed out by the sociologist Edward Shils, was less to fight Communism than it was “to keep alive the ideal of the rational and truthful understanding of the contemporary world.” Its target was not so much the sterility and disastrous effects of the Soviet system, but rather the falsehoods being told about it and believed by Western intellectuals. The Agency made use of both ‘dummy’ and established foundations to funnel money to the CCF."
“Although rumors had long fed speculation about the CCF’s ability to support a secretariat in Paris, a global network of world-class journals, and a program of international conferences and arts festivals, the notion of covert funding by a U.S. spy agency seemed far-fetched to many of its adherents and participants… In a symposium sponsored by Commentary magazine three months after the Braden piece [on the CCF’s CIA funding] appeared, the liberal historian Schlesinger wrote that the CIA expenditures were wholly justified, arguing: ‘For the United States government to have stood self-righteously aside at this point would have seemed to me far more shameful than to do what, in fact, it did—which was through intermediaries to provide some of these groups subsidies to help them do better what they were doing anyway.’ Even some Left-leaning historians have recognized that the magnitude of the post-war Soviet threat justified the choices made at the time. ‘In the circumstances of the time,’ observed Tony Judt, ‘who are we to say that the social democrats and liberals should have denied themselves financial resources to combat a huge Soviet propaganda machine?’”
Why it matters: “Over recent years, the democratic West has found itself confronted by both resurgent authoritarianism and illiberal populism, while Islamist militancy has extended its reach into Sub-Saharan Africa. While none of these pose existential challenges akin to an ideologically aggressive, expansionist, nuclear-armed Soviet Union, or a compelling systemic alternative to match the global pretensions of Communism, we still must struggle to address the varying threats they pose to liberal democracy itself. These include the soft power of China’s developmental authoritarianism, the ‘illiberal democracy’ of Viktor Orban and other populist leaders, and even the attacks on free speech and democratic institutions in our own country from both Right and Left that have shaken confidence in our ability to defend our most fundamental values. And while the Ukraine War has done much to undermine the appeal of Putin’s propaganda war against the West, it has nonetheless begun to expose divisions over the extent to which we are willing to commit to the long-term challenges required to counter the spread of authoritarianism.”
3. What happens when there’s no one at the wheel of the global trading system
Why you should read it: Wall Street Journal reporter Greg Ip details the ways in which the post-Cold War global trading system is slowly but surely unraveling before our eyes.
“That [post-Cold War globalization] consensus is now crumbling. The World Trade Organization, the embodiment of this rules-based order, has increasingly been sidelined as countries turn to export controls, subsidies and tariffs to promote domestic industries or kneecap adversaries… In reality, the WTO’s credibility began to erode much earlier with the rise of China, whose authoritarian, statist economy has proved incompatible with the trading system the market-based democracies built after World War II.”
“The European Union has also threatened to take the U.S. to the WTO because the law dubbed the Inflation Reduction Act only provides subsidies to electric vehicles assembled in North America… Yet complaints about U.S. behavior is at best a partial diagnosis of what ails the world trading system. A more complete picture needs to address why the Americans have become so obstreperous… The unintended consequence [of the WTO’s originally U.S.-backed binding dispute resolution mechanism] is that countries unhappy with U.S. trade laws, rather than negotiate, sue the U.S. at the WTO, and often win because WTO judges take an expansive view of their own authority to interpret and, critics say, make trade law.”
Why it matters: “This doesn’t portend a return to the 1930s, when countries dramatically raised tariffs and retreated into autarky. The WTO still exists, and most members still abide by their commitments. Some have used alternative channels to adjudicate disputes while the appellate body remains defunct… Rather than a single set of rules imposed on fundamentally incompatible systems, such as China’s and the U.S.’s, the world will migrate toward a series of regional pacts. This lets countries pick partners and sectors where their values and interests happen to align, such as Singapore’s digital trade agreement with Australia. The Biden administration’s Indo-Pacific Economic Framework represents a la carte economic cooperation: Participating countries pick from a menu of fields in which to participate—tax, infrastructure, supply-chain resilience and trade… But the future will resemble the pre-WTO past in that many disputes will be resolved through negotiation rather than litigation. U.S. officials point to the resolution with the EU of a long-running fight over each other’s subsidies for commercial airliners, which includes a joint approach to dealing with China."
4. How China’s Belt and Road has already started to fall apart
Why you should read it: Wall Street Journal reporters Ryan Dube and Gabriele Steinhauser show how projects funded by China’s vaunted Belt and Road Initiative have suffered from shoddy craftsmanship that could prove disastrous for local communities
“Today, thousands of cracks have emerged in the $2.7 billion Coca Codo Sinclair hydroelectric plant, government engineers said, raising concerns that Ecuador’s biggest source of power could break down. At the same time, the Coca River’s mountainous slopes are eroding, threatening to damage the dam… It is one of many Chinese-financed projects around the world plagued with construction flaws.”
“Now, low-quality construction on some of the projects risks crippling key infrastructure and saddling nations with even more costs for years to come as they try to remedy problems… In Pakistan, officials shut down the Neelum-Jhelum hydroelectric plant last year after detecting cracks in a tunnel that transports water through a mountain to drive a turbine… The head of the country’s electricity regulator, Tauseef Farooqui, told Pakistan’s senate in November that he was concerned the tunnel could collapse just four years after the 969-megawatt plant became operational. That would be disastrous for a nation that has been battered by rising energy prices, said Mr. Farooqui. The closure of the plant has already cost Pakistan about $44 million a month in higher power costs since July, according to the regulator… Uganda’s power generation company said it has identified more than 500 construction defects in a Chinese-built 183-megawatt hydropower plant on the Nile river that has suffered frequent breakdowns since it went into operation in 2019. China International Water & Electric Corp., which led construction of the Isimba Hydro Power Plant, failed to build a floating boom to protect the dam from water weeds and other debris, which has led to clogged turbines and power outages, according to the Uganda Electricity Generation Co., or UEGC. There have also been leaks in the roof of the plant’s power house, where the generators and turbines are located, UEGC said. The plant cost $567.7 million to build and was financed mostly through a $480 million loan from the Export-Import Bank of China… In Angola, 10 years after the first tenants moved into Kilamba Kiaxi, a vast social housing project outside the capital of Luanda, many locals are complaining about cracked walls, moldy ceilings and poor construction.”
Why it matters: “But in 2020, the Coca River’s slopes began collapsing, creating thunderous crashes and rattling the ground like an earthquake. The erosion destroyed Ecuador’s biggest waterfall. It took out a stretch of a key road and oil pipeline. The Pink House, a brothel in San Luis that locals say was popular with both Chinese and Ecuadorean workers, tumbled into the river. [Local resident Adriana] Carranza said a neighbor’s home went over the cliff… ‘Coca Codo was initially seen as really good,’ said [local resident Nancy] Chicaiza. ‘Nobody thought we’d be facing these consequences.’”
5. The rise of “minilateral” diplomacy
Why you should read it: Pakistani ex-diplomat Husain Haqqani and Narayanappa Janardhan describe the current worldwide vogue for “minilateral” diplomacy between small groups of like-minded partners.
“With multilateral organizations such as the United Nations and the European Union unable to coordinate their foreign policies, some countries now prefer to operate outside formal institutions, opting for issue-based and short-term partnerships. Minilaterals are narrower in scope than multilaterals, usually informal, and bring together fewer states that share the same interest. They are practical, adaptable, economical, and voluntary—without being tied down by institutional constraints. Most multilateral institutions must cater to the competing expectations and ambitions of more countries, slowing down decision-making and incurring large bureaucratic costs… Most minilaterals are also voluntary and not legally binding. They involve multiple stakeholders, including corporations and nongovernmental organizations, instead of being state-centric; this makes them bottom-up rather than top-down. Issue-based minilaterals tend to be geographically noncongruous, unlike regional groupings such as the South Asian Association for Regional Cooperation, the Association of Southeast Asian Nations, the African Union, Organization of American States, and the European Union.”
“Minilateralism facilitates economic cooperation in ways that multilateralism does not. Most multilateral institutions get bogged down with competing interests…Minilaterals enable like-minded countries to work together in areas that are hindered by multilaterals or bigger groups of nations. For example, minilateral groups are pursuing common goals toward practical climate targets, while it has proved difficult to reach agreement on climate issues in larger multilateral settings. In a significant development, the United Arab Emirates and Indonesia announced a minilateral formation committed to bolstering mangrove conservation around the world during the U.N. climate summit in Egypt last November. Called the Mangrove Alliance for Climate, the group also includes India, Sri Lanka, Australia, Japan, and Spain.”
Why it matters: “The changing geostrategic landscape has created new opportunities for cooperation among several middle powers. Minilateralism can provide a model for emerging markets and developing countries, too. Although its benefits seem to far outweigh its costs, it does come with some risks; minilateralism could make international organizations more ineffective than they already are and could promote contention. But in many cases, bilateral relations have reached a saturation point, and multilateral institutions are weak and ineffective. With or without the United States, minilateralism is likely to thrive in the years to come, much as nonalignment gained traction during the Cold War.”
6. How undeclared Chinese police outposts worldwide help Beijing export surveillance and repression
Why you should read it: New York Times journalists Megha Rajagopalan and William K. Rashbaum report on the phenomenon of undeclared, unapproved Chinese police outposts operating around the world - including in the United States.
“The nondescript, six-story office building on a busy street in New York’s Chinatown lists several mundane businesses on its lobby directory… A more remarkable enterprise, on the third floor, is unlisted: a Chinese outpost suspected of conducting police operations without jurisdiction or diplomatic approval — one of more than 100 such outfits around the world that are unnerving diplomats and intelligence agents… F.B.I. counterintelligence agents searched the building last fall as part of a criminal investigation being conducted with the U.S. attorney’s office in Brooklyn, according to people with knowledge of the inquiry. The search represents an escalation in a global dispute over China’s efforts to police its diaspora far beyond its borders. Irish, Canadian and Dutch officials have called for China to shut down police operations in their countries. The F.B.I. raid is the first known example of the authorities seizing materials from one of the outposts.”
“Those who discussed the F.B.I. search did so on condition of anonymity because they were not authorized to discuss the matter. The Chinese Embassy in Washington on Wednesday played down the role of the outposts, saying they are staffed by volunteers who help Chinese nationals perform routine tasks… But Chinese state news media reports reviewed by The New York Times cite police and local Chinese officials by name describing the operations very differently. They tout the effectiveness of the offices, which are frequently called overseas police service centers. Some reports describe the Chinese outposts ‘collecting intelligence’ and solving crimes abroad without collaborating with local officials. The public statements leave it murky who exactly is running the offices. Sometimes they are referred to as volunteers; other times as staff members or, in at least one case, the director… Western officials see the outposts as part of Beijing’s larger drive to keep tabs on Chinese nationals abroad, including dissidents. The most notorious such effort is known as Operation Fox Hunt, in which Chinese officials hunt down fugitives abroad and pressure them to return home.”
Why it matters: “It is not automatically inappropriate for police officers to work overseas. The F.B.I., for example, posts agents abroad. But they typically declare themselves to the foreign government and work out of American embassies. If they perform law enforcement duties, it is with the permission of the local authorities. China has made similar arrangements for joint patrols in places like Italy… That makes the off-the-books operations all the more curious.”
7. How Japan hopes to jump-start its semiconductor industry
Why you should read it: Journalist William Sposato outlines for Foreign Policy how Japan’s government hopes to revive the country’s once-leading semiconductor industry.
“To get back some of the high-tech mojo that made it an economic powerhouse, Japan is launching an ambitious program to bring back cutting-edge semiconductor manufacturing, a field it ceded to Taiwan, South Korea, and China nearly 20 years ago… It is also part of what is, in effect, a broad-based defense mobilization program to contain an increasingly ambitious China—one that fits nicely in with the Biden administration’s own plans. Washington has put increasingly tight limits on U.S. companies’ involvement in Chinese chip manufacturing, seeking to keep control of the advanced electronics vital to modern warfare—and the economy as a whole—within its wider sphere of allies like Taiwan and Japan.”
“In 1988, Japan accounted for 51 percent of worldwide semiconductor sales… Today, the global market is dominated by Taiwanese and South Korean manufacturers, especially for the most-sophisticated chips. Within this, Japanese companies still produce many of the complex chemicals that are needed in chip-making. While Japan has been moving down the food chain, it has moved up the value chain. A major player in this area is Ajinomoto, better known for its monosodium glutamate seasoning and other food products… In the buy rather than build school of business, it helped bring the world’s most successful microchip company, Taiwan Semiconductor Manufacturing Company (TSMC), to Japan with a planned $8.6 billion manufacturing plant. The Ministry of Economy, Trade, and Industry (METI) (successor to the old MITI) will put up 40 percent of the cost for the venture, which also brings in Sony… In addition, METI has corralled some of Japan’s biggest tech names, including Sony, Toyota, and SoftBank, to create the aspirationally named Rapidus with a mission to develop and eventually manufacture the next generation of advanced chips, known as the 2-nanometer chip. The consortium is teaming up with IBM, which is considered one of the world leaders in such technology. They plan to make investments totaling $36 billion over the next decade, with the government offering around $500 million in subsidies.”
Why it matters: “The plan follows failed initiatives over the years that each started with high hopes only to end in bankruptcy when it became clear the various partners couldn’t work together or backed the wrong technology. The most notable failure was the 2012 collapse of Elpida Memory, created in 1999 through a government-backed merger of the NEC Corporation and Hitachi’s memory chip operations. It started off well but ran into trouble during the global financial crisis of 2008. The government threw in yet more money, but as debts soared to around $5.5 billion, it became the biggest bankruptcy by a Japanese manufacturer since World War II… But the broader question remains of whether a government-led program can bring back past glories. China’s own top-down efforts to create a domestic semiconductor industry have largely flopped. ‘Attempts to revive Japan’s semiconductor industry through government intervention have repeatedly failed in the past,’ [economist Takahide] Kiuchi said. The problems, he added, center around the lack of massive investments required and a brain drain of necessary talent over the years. ‘Under such circumstances, even if the government supports it, it will not lead to the revival of the Japanese semiconductor industry,’ he said.”
8. Why the U.S. economy just might be on the cusp of an upswing
Why you should read it: New York Times columnist Paul Krugman recites a slew of positive economic data that indicates the U.S. national economy may finally be emerging from its post-COVID doldrums.
“It’s hard to overstate how bad things looked for Biden’s party on election eve [2022]. The last report on consumer prices released before the midterms showed inflation of 8.2 percent over the previous year, a terrible number by anyone’s reckoning. The unemployment rate was still very low by historical standards, but the news media was full of warnings about hard times ahead, and a large majority of likely voters believed (falsely) that we were in a recession… Why didn’t that [predicted Republican landslide] happen? Part of the answer may be that Americans weren’t feeling as bad about the economy as some surveys suggested.”
“A few months ago I looked at the 'misery index’ — the sum of unemployment and inflation, originally suggested by Arthur Okun as a quick-and-dirty summary of the state of the economy. I used to think this index was silly; there are multiple reasons it shouldn’t make sense. But it has historically done a surprisingly good job of tracking consumer sentiment… Well, now it has fallen off a cliff. If we use the inflation rate over the past six months, the misery index, which stood at 14 as recently as June, is now down to 5.4, or about what it was on the eve of the pandemic, when Donald Trump confidently expected a strong economy to guarantee his re-election.”
Why it matters: “Now, I’m not predicting a Democratic blowout in 2024. For one thing, many things can happen over the next 22 months, although I don’t think Republicans, even with cooperation from too many in the media, will convince Americans that the Biden administration is riddled with corruption. For another, elections often turn not so much on how good things are as on the perceived rate of improvement, and with inflation and unemployment already low, it’s not clear how much room there is for a boom… But to the extent that the economic landscape shapes the political landscape, things look far better for Democrats now than almost anyone imagined until very recently.”
9. Will the “designer economy” be our new political-economic philosophy?
Why you should read it: In Noema, magazine editors Yakov Feygin and Nils Gilman posit that America’s political economy has shifted from the previously prevailing Reagan-to-Obama era dispensation of deregulation and markets-know-best to something the authors call the “Designer Economy.”
“Over the last few decades, monetary policy has been the main (and blunt) instrument for shaping the economy, but today, policymakers from across the political spectrum are embracing a more active role for the federal government in directly configuring the ‘real economy’ — wages, employment and investment. Leaders on both left and right are actively thinking about how the government can intentionally shape markets to fashion socioeconomic outcomes… This new dispensation represents a reframing of the relationship between the state and the economy, one potentially as transformational to American capitalism as the New Deal was in the 1930s or Reaganism was in the 1980s. It is most evident in a new bipartisan openness to the old-fashioned idea of an industrial strategy, but it is broader than that. Let’s call it the ‘Designer Economy…’ In a design framework, economic policy focuses on constructing and reaching a specifically envisioned future. This is different from traditional industrial strategy: It doesn’t ‘pick winners,’ but rather pushes government agencies to have a broad awareness of technological and economic trends in order to promote specific potentialities. In contrast to planned economies or developmental states, a Designer Economy’s primary focus is on a dynamically changing future, and it aims to produce tools to enable various actors in the economy to adapt to these changes in a matter that preserves the public’s preferences through iterative experimentation.”
“Whatever visions of the Designer Economy these emerging [political] coalitions may develop, all advocates of industrial strategy will need to grapple with the limited capacities of the existing American government. As the Biden administration works to deploy the estimated $1.7 trillion in the Inflation Reduction Act, it is becoming clear that federal and state agencies have neither the necessary expertise nor the political authority to sequence and coordinate spending as part of a broad, all-of-government effort. Implementing any Designer Economy vision will require a government that can take on roles and responsibilities it hasn’t cultivated for decades. We’ll have to return to older ways of doing things… Since the 1970s, however, the parts of the government that existed to manage and coordinate the real economy have atrophied as hostility to government power and legislative proceduralism blocked ambitious government projects… Rejecting anti-government rhetoric and instead celebrating competent operators is thus a crucial first step. Managing a successful Designer Economy requires a cadre of experienced, entrepreneurial and independent government officials. Today, however, government service is difficult to enter due to a labyrinth of byzantine rules and processes. Moreover, public servants lack social prestige and are often underpaid relative to what they can earn in the private sector; a McKinsey partner earns much more than a congressional staffer or a Commerce Department GS-15. Many staffers are overworked, underpaid and can’t make ends meet in long-term government service… Again, much of the governmental capacity that needs to be developed to support the Design Economy doesn’t need to be invented wholesale — it just needs to be restored. For example, before it was eliminated in 1995 as part of Newt Gingrich’s anti-governmental reforms, the Office of Technology Assessment served as the federal node for gathering and exchanging information on emerging technologies, as well as offering expert feedback and advice to Congress. We will need such institutions again.”
Why it matters: “Unlike the old vision of industrial strategy, the Designer Economy isn’t about smokestacks and steel mills. In fact, it revives a much broader (and older) idea: Government-led economic development. That form of leadership is ultimately about trying to enact a particular vision of what a national society should look like. Given how the rise of China, the 2008-9 financial crisis and the pandemic have changed the world, this type of development strategy has a chance to achieve a new kind of political purchase… The idea of the Designer Economy has the potential to rescue the dream of intentionally transforming the economy to better serve our shared purposes. An emergent political consensus agrees that American capitalism doesn’t have to be a listless system where incomes are stagnant and growing prosperity is available only to the already wealthy. Rather than commanding one ideal path, the politics of design are about what features we want in that future. With the right structures in place, we can transform the government from a mere regulator and issuer of transfer payments into a direct investor in and implementer of a vibrant, verdant, family-friendly and egalitarian future.”
Odds and Ends
How one U.S. Navy fighter pilot shot down four Soviet MiGs on one mission during the Korean War - and how the U.S. government kept it secret for more than half a century…
The last Boeing 747 jumbo jet leaves the factory in Seattle, Washington, more than fifty years after its first flight…
How the El Cholo restaurant became a Los Angeles landmark…
Why dolphins and fisherman form such a productive duo in the waters off southeastern Brazil…
How self-repairing Roman concrete helped ancient monuments stick around to the present day…
What I’m Listening To
A brace of songs from the recently departed David Crosby and Jeff Beck:
“Almost Cut My Hair,” off the seminal 1970 Crosby, Stills, Nash, and Young album Deja Vu.
“Shapes of Things,” the lead track from Jeff Beck’s 1968 debut record Truth, with vocals from a then-unknown Rod Stewart.
A cover of “Purple Rain” at the conclusion of Jeff Beck’s 2017 concert album Live at the Hollywood Bowl.
Image of the Month
