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The missile defense dilemma

The NYT reports that next month Obama will announce his strategy for ballistic missile defense (BMD). The administration must by now be fully aware of the bind they’re in. I’ll be surprised if he does anything other than kick the can down the road, as he is doing with both Iran and North Korea.

Missile defense has always been one of the catch-22s of Obama’s political platforms (hate to say I told you so). US BMD assets in eastern Europe have become very important to our allies there (Poland hastily approved the plans within days of the Georgian invasion last August, for obvious reasons). The program would be implemented in what Moscow sees as Russia’s sphere of influence, which has prompted serious anger from the Kremlin with promises to place Russian nuclear assets in western Russia and Kaliningrad. The ultimate catch-22–embarrassingly predictable–is that Obama promised a new, gentler foreign policy, and his bluff was promptly called by Moscow. If Obama really wants Change, Putin & co. argued, he will not be so belligerent as to place missile defense near Russia’s border. But Obama knows that abandoning BMD will be seen as feebly caving to pressure from Moscow and abandoning highly strategic US allies in eastern Europe.

Obama’s little mess is complicated by his clear lack of will regarding Iranian proliferation. I’ve been arguing for some time that when Iran proliferates the political demands for missile defense, from both domestic constituencies and our Middle Eastern and CEE allies, will become irresistible. At that point, not only will abandoning missile defense look like caving to the Kremlin, but it will also look like exposing the US and its allies to a real nuclear threat for the first time since the Cold War. Note that this is all political–whether missile defense can be effective or not is largely irrelevant to Obama’s catch-22.

Bush II overstretched US military assets. Obama has shown a clear lack of will to pursue costly interests. As such, the United States has chosen to allow Iranian proliferation, perhaps during Obama’s tenure. Is he ready to deal with the consequences of this choice? One of these will be the requirement that he directly confront the convoluted missile defense issue.

Zach recently wrote a fantastic post arguing that sanctions against Iran have been and will be ineffective in curbing Tehran’s nuclear program. The notion that sanctions effectively change behavior is, well, unrealistic. He recommends engagement which he says “remains the best option to reduce the threat of Iran’s nuclear program.”

While I agree that sanctions have a dismal record of prompting behavioral changes among autocracies, I wonder if engagement has produced any better results. Is there any record of states halting the pursuit of their interests as a result of engagement and “inclusion” in the international community? The best examples of engagement we have are from the Cold War: Nixon/Brezhnev and Reagan/Gorbachev. In both instances, American interlocutors were successful because negotiation and compromise were in the interest of the Soviets. Setting aside for now the recent domestic turmoil in Iran, proliferation has been a key national interest for Tehran since the early 1980s. Is there any evidence that Tehran would abandon this interest as a result of engagement? Have we any carrots to offer that would change Tehran’s calculus of interests sufficiently to prompt a halt in proliferation? I can think of none. (Though, domestic problems may result in a change in Tehran’s interests).

We do know that Iran temporarily halted enrichment shortly after the Iraq invasion. It resumed in late 2005 when it was apparent that the invasion had turned into a quagmire. Libya halted its nuclear program in late 2003. Did these regimes fear American action against their nuclear programs as a result of the Iraq War? Did the quagmire then undermine Washington’s threat credibility and prompt Tehran to resume enrichment? It’s impossible to know for sure, but it’s difficult to assume coincidence in the timing of these actions. In other words, credible threats of force are likely to have prompted the halting of two belligerent nuclear programs. “Engagement” has no such record. Unfortunately, the poor planning and execution of the Iraq War have deprived us of knowing whether fear of invasion would have precluded further enrichment.

So, barring serious developments as a result of the election catastrophe (Bueno de Mesquita says it’s a game-changer in our favor!), the current course of “engagement” promises nothing positive–empirically or theoretically. In fact, as I’ve argued before, Iran doesn’t even have a reason to engage with the US, since Tehran will gain dramatic leverage after proliferation. So it seems that the bigger question is:

Are we willing to accept a nuclear Iran? If yes, the politicians must stop wasting time and begin planning for the fallout. Serious domestic demands for missile defense and demand among our Sunni and Israeli allies for an increased defense umbrella are the most obvious consequences. This may still not be enough to satisfy Israel, which may have the capability to halt the Iranian program without doing so on our terms. Are we prepared for these exigencies? Certainly not now.

If we’re unwilling to accept a nuclear Iran, we must stop wasting time assuming that “engagement” on its own will solve the problem. Engagement and negotiation are only useful if they can be used to change the calculus of Tehran’s interests. This means credibly demonstrating that the regime will be worse off after proliferation than if it abandons its nuclear program. Yes, this would require the threat of force–but if the threat is credible, the use of force would be unnecessary. Whether this threat can be credible will depend on both US military resources and world perception of Obama’s will and willingness to protect US interests. Neither are in great shape.

Obama and Congress must provide an honest dialogue about the consequences of Iranian proliferation. Many on the Left are disturbingly cavalier about the way a nuclear Iran affects the world order and Middle Eastern stability. And, kicking the can down the road, which Obama seems to be doing, is irresponsible.

There are a number of reasons that the US should refrain from passing sanctions against Iran at this point, particularly the proposed Iran Refined Petroleum Sanctions Act.

1. As a nondemocracy, sanctions are unlikely to affect the ability of the ruling elites to maintain power for the foreseeable future. Instead, sanctions will probably just induce patriotic flag-rallying among the population, and inadvertently ease the current regime’s legitimacy problems. Moreover, Hamid Dabashi warns that sanctions could merely “enrich and empower” the Pasdaran and the Basij, which have major control over the export-import components of both the official and the unofficial economy.

2. The weak US-Iran political and economic relationship makes American sanctions less costly to Iran. Moreover, it is unlikely that the US will be able to garner enough multilateral participation to entirely cut off Iran’s access to alternative markets. This significantly lowers the likelihood that sanctions will be effective.

3. Although Iran is currently a net-importer of refined petroleum, it is implementing several measures to reduce this strategic vulnerability. First, it has expanded seven of its nine refineries and is in the process of building seven more. By 2012 it is expected to be gasoline self-sufficient and soon after a net-gasoline exporter. Second, Iran has vigorously explored alternative energy measures, including conversion of car engines to run on natural gas and methanol. Thus, sanctioning Iran’s gas imports is unlikely to possess enough leverage to significantly deter Tehran’s nuclear aspirations.

4. Historically, sanctions against Iran have proven ineffective. Three decades of extensive sanctions have slowed but did not stop the Islamic Republic’s move toward nuclear energy, weapons of mass destruction, support of Hamas and Hezbollah, and internal repression. Moreover, a recent report suggests that American sanctions have generally had significantly negative economic effects but only minimal political consequences.

Recommendations

Engagement remains the best option to reduce the threat of Iran’s nuclear program. For now, given the turmoil within the Iranian regime, Washington should continue to wait for a response from Tehran. All negotiations should be approached multilaterally through the IAEA.

As previously noted, sanctions are unlikely to be effective against Iran. However, if it becomes necessary to placate domestic audiences clamoring for some action to be taken, sanctions should be developed to target only members of the ruling regime, and not adversely affect the lives and welfare of the majority of Iranians.

The best option long-term for the US is to drastically improve the level of trade, exchange, and dialogue with Iran. It should re-open its embassy in Tehran, promote mutual understanding, and encourage Iran’s full inclusion into the international community.  Even though that is unlikely to prevent Iranian proliferation in the short-term, it is the only realistic and viable option that the US has left.

On altruistic interventions

I was surprised by Michael O’Hanlon’s op-ed in today’s WP. He argues that the US should put troops in the DRC, but he never argues why.

If the situation is to improve, we need to do the one thing that is required above all others — strengthen security, especially in eastern Congo. And by now we should have learned the hard way that there is only one way to do so — by leading through example, with the deployment of at least modest numbers of American troops.

Like so many others with honorable ambitions, O’Hanlon blithely ignores the complicated nature of humanitarian intervention. Instead of making an argument for why we should intervene, he wastes his article discussing how to intervene. I have argued before that humanitarian intervention–specifically in Africa–is precluded by US interests in the region (see US interests in Africa), but since the quest to magically save the world by sending troops to stop complicated conflicts, pick sides in conflict-driven humanitarian crises, or spread democracy is still popular, I should expand on my arguments.

Not only should the advocates of intervention consider Washington’s dismal record of intervening, but they should also consider these additional issues:

Altruistic intervention is typically ineffective without occupation and/or nation-building. These endeavors are extraordinarily costly–in blood and treasure–and require an attention span of which the American public is not capable. Just as the CNN clips of starving/gun-wielding children can prompt public demands for intervention, the cameras inevitably find dying US soldiers and prompt demands to bring troops home. Further, insurgencies are extremely difficult to contain and often render the occupation itself ineffective.

Intervention is inherently inconsistent. As the claims of proliferation were debunked, the rationale for the Iraq War was focused on its humanitarian justifications: Saddam was a brutal dictator who silenced and tortured his opponents. The world is full of dictators and conflicts. Africa has dozens. They are in Iran, North Korea, Myanmar, and elsewhere. The US simply cannot afford to intervene in all of them, so the justification for intervening in specific instances is bound to be driven by politics and emotion rather than responsible calculation. Further, this inevitable inconsistency breeds resentment elsewhere and sets bad precedents.

Many interventions are bound to fail. Failed interventions diminish US perceived power and increase the likelihood of future confrontation (think Lebanon or Somalia).

Interventions driven by emotion instead of interests have prohibitive opportunity costs. While troops are quagmired in non-necessary interventions, threats to US interests may arise which require military resources. Policymakers are then forced to sacrifice US interests or break humanitarian commitments.

Two counter-arguments can be made against the above. The first is that altruism by force in the form of humanitarian intervention, peacemaking, or democracy promotion is a moral imperative. This should be easily addressed by the above: regardless of morality, the costs and inconsistencies of such interventions are prohibitive. Additionally, however, morality is more complicated than its advocates recognize. Policymakers have a moral obligation to protect state interests. If an intervention is obviously counter to US interests, policymakers would be immoral to employ US resources to intervene. Any further moral imperatives should be handled through NGOs or the UN where costs are shared. In many cases, the moral obligations of the United States should stop after the US has authorized UN actions. If the UN refuses to fulfill its own mission by enforcing mandates, that is no fault of Washington’s.

Another concern is about spillovers. Many conflicts spill over to neighboring countries. If these spillovers are an equal threat to all world citizens, the costs of containing them should be shared at the UN. If the spillovers pose a serious threat to US interests, the US should act to protect those interests. The US does not have the resources or obligation to bear the costs of global public goods.

Advocates of any intervention should demonstrate that it furthers US interests. The probable benefits of intervention must exceed its costs, and in many cases in Africa, this is not the case.

I’ve always been of the impression that the likelihood for Chinese imperial ambition is a weak one. Historically, China, due to its ethnocentricity, concluded imperial conquest beyond its immediate borders (Tibet, Mongolia, etc.) to be unworthy of its attention. But recently I stumbled across a compelling argument in Richard Cooper’s The Breaking of Nations in which he gives consideration to the possibility of Chinese and Indian imperial conquest in the coming future. His argument is based on the trend that internal cohesion within a state is a prelude to external expansion. As examples he offers Britain’s imperial conquest after England and Scotland unified; Japan after 1868; and Germany in 1871. As Cooper argues:

“Both China and India, though they are part of the nation state system, have some of the characteristics of empires.  Were they to develop the nation state’s ability to concentrate loyalty and power they would be very formidable indeed. In fact, the arrival of any cohesive and powerful state in many parts of the world could prove too much for any regional balance-of-power system.”

It’s a short, compelling argument to mull over. Britain, Japan, Germany, and many others expanded outwards after establishing internal stability and cohesiveness. Will China and India follow suit after establishing its internal stability and political cohesiveness? Not in the near future as both states sheer size presents formidable challenges to creating a sense of loyalty and securing essential economic interests; but in the coming decades, Chinese and Indian imperialism, especially motivated out of a sense of establishing order in a region ripe with chaos (e.g. Pakistan, Afghanistan, Burma, etc.), is a distinct, long-term possibility.

For two decades, American foreign policy has been marked by reactionary, ad-hoc, and short-term responses to various international crises and a general paucity of long-term strategic planning. Much of the blame lies with the shoddy judgment of Clinton and Bush II regarding Islamic terrorism; the first underestimated and under-reacted to the terror threat, while the latter, in a series of epic bungles, overestimated and overreacted to the same. Additionally, both shared a naive and mystical conviction that democracy promotion was the panacea for each of the world’s myriad ills, from failed states to terrorism to great power rivalry. Because of this belief, spreading democracy abroad has been the US’s only discernible overarching strategy for many years. Unfortunately, democracy promotion is a shaky foundation around which to base US foreign policy, for a number of reasons.

First, obsession with democracy promotion conflates a foreign policy means with an end.  Spreading democracy is only an American interest insofar as it furthers US security and prosperity. While there is some evidence that in the very long-term, global democratization may help achieve these ends, in the short-term, the birth and consolidation of democracy is too slow, complex, and uncertain a process for it to remain the preferred arrow in the quiver of US policy options, particularly for the increasingly fluid and dynamic nature of international politics.

Second, the elevation of democracy promotion in foreign policy is often based on three faulty assumptions: (1) that failed states and terrorism constitute the most serious threat to American power: (2) that democracy is the answer to solving these problems: and (3) that the US is capable of effectively creating and sustaining new democracies. The misguided faith in these propositions has distracted US policymakers from perceiving other, more consequential current and long-term threats to US well-being and prevented the development and exercise of a flexible and diverse set of policy tools to advance American strategic interests.

While poor human decision-making is a large part of the problem of short-sighted American foreign policy, the real culprit is, ironically, the democratic system itself. Constrained by the need to make palatable the briny complexity of world politics to the general public, politicians end up egregiously simplifying problems and policy into digestible, but fanciful, platitudes. With a public ignorant of the nuance that characterizes political reality, politicians are unable to sell a versatile and dexterous foreign policy approach, fearful of the merciless castigation of elections. Instead, politicians produce ideology-based foreign policies that inevitably make America look hypocritical and ridiculous.

Indeed, it is precisely the rapid turnover of politicians in democracies that leads to a myopic and inconsistent foreign policy. When ideologies and personalities shift substantially every 4 to 8 years and foreign policy formulation becomes subordinate to re-election exigencies, there is simply no incentive or mechanism to craft and implement long-term strategy. There is no independent foreign policy agency similar to the Fed that could function outside of the chaotic, reactionary, and trivia-focused world of team-politics.

A central goal of this website is to clarify the long-term strategic objectives of the US, as well as the policy tools most likely to achieve them. In a recent survey, IR scholars were asked to rank what they believed would be the most consequential issues the US is likely to face in the next 10 years. Here is their view:

  1. Global Climate Change
  2. Rising Power of China
  3. Global Reliance on Oil
  4. WMD Proliferation
  5. Global Poverty
  6. Armed Conflict in the Middle East
  7. Reform of the United Nations
  8. Resource Scarcity
  9. Failed States
  10. Russian Resurgence
  11. War in Iraq
  12. Epidemic and/or Pandemic Disease
  13. Ethnic Conflict
  14. Global Population Growth
  15. Rogue States
  16. Homeland Security
  17. International Organized Crime
  18. International Terrorism
  19. Regional Integration

Even a cursory glance at this list suggests that current US policy is far too focused on many of the lower-ranked issues and not enough on those deemed most important. In an ideal world, Obama will prove adept at avoiding the mistakes of the past decades and be able to forge a coherent set of foreign policy objectives and processes that align with America’s most significant long-term challenges and opportunities. But I fear that would be putting far too much hope in one man.

The oil weapon

The International Energy Agency’s (IEA) chief economist warned this week that rising oil prices are a threat to the nascent global economic recovery (FT). One of the foreign policy implications of resurgence in oil prices in coming years is that it will increase aid burdens on multilateral institutions that, like it or not, the US has to fund. A much more ominous consequence of the rising prices, however, is that it transfers money from the West into the foreign policy budgets of Russia, Iran, and Venezuela, key US adversaries. The no-end-in-sight rise in oil prices is largely a function of growing demand in China and India—but the United States is still the world’s largest consumer (and, ironically, one of its three largest producers; see excellent FT oil flows map). US demand fuels price increases.

Oil has been a part of foreign policy for decades. Daniel Yergin, my favorite oil expert, has written in detail about the development of the “oil weapon” in the foreign policy thinking of Arab states in the 1970s (Yergin’s definitive book is out in a brand new edition). The notion that a resource could achieve foreign policy outcomes that force could not was hard to accept for many, especially Saudi Arabia, but it has worked to their strategic advantage ever since. As part of a larger foreign policy strategy, the US could gain considerable strategic advantage by employing its own oil weapon: the Pigovian oil tax.

How it works

The US government announces a floor on gas prices—say, $3 per gallon—and a legislated commitment to raise that floor by, say, 50 cents every six months… forever (conservative pundit Charles Krauthammer suggested the moving floor idea). Basic economic theory teaches that owners of a finite resource—like oil—choose production quantities based on expectations of future demand. If producers expect demand to grow in the future, as they do now with US oil addiction and the continuing emergence of China and India, they will limit production now and save their resource to sell at higher prices later. If producers expect demand to decline in the future, they will increase production now, even at lower market prices, to get rid of their product before it loses value on declining demand. An announcement of a permanent, rising Pigovian tax in the United States would prompt producers to increase production now, and world oil prices would fall (though US gas prices would not). Government revenues would increase as oil prices fall—revenues that could pay off debt or, for political purposes, reduce income tax rates.

The primary benefit of this policy is that it gives markets powerful incentives to develop alternative energy through market methods. Once car companies know that gas will get rapidly expensive, they know they must produce more efficient cars (remember that Chevrolet fast-tracked the Volt when oil prices got high in 2008). Rather than letting Congress choose industries to subsidize (like corn ethanol or certain hybrid cars) based on political capture instead of viability, and rather than imposing arbitrary mileage standards (CAFE) on car production, markets find the best alternatives through Schumpeter’s “creative destruction.” A domestic result is structurally reduced emissions, which appeals to Left-leaning Americans concerned about global warming and environmental damage, which should please the Left. Another result would be reduced political demand for subsidies and mileage standards, which should please economic conservatives. A crucial outcome is the gradual but inevitable decoupling of the US economy from its destructive dependence on oil prices.

Foreign policy outcome

Several key US concerns—Venezuela, Russia, and Iran—are heavily dependent on high oil prices for their belligerent foreign policy ambitions and their domestic political legitimacy. Policies in these countries would have to change course immediately upon the introduction of the tax and the guarantee of lower world oil prices. Russian adventurism in Eurasia would be severely limited, and Putin’s hold on power would be threatened. Iran’s proliferation and maintenance of conventional forces would be restricted, and the hard-liners’ hold on power would be threatened. Chavez’s massive social programs which have guaranteed him political power, along with his subsidization of anti-Americanism in LatAm, would have to go, and his hold on power would be threatened. These results would change the game dramatically in Washington’s favor. It would finally give Washington desperately needed leverage in negotiations with hostile states which have gone nowhere in the last decade.

Like Saudi Arabia before the 1970s, the US will be reluctant to make such a calculated, interest-based policy with something as important as oil. Dominant ideological trends in the US are against the move, but in addition to a majority of economists, a rapidly growing number of pundits are voicing support for the idea. Reality-based policymaking requires acknowledging both opportunities and limitations of geostrategic conditions. While US oil dependence has been a serious limitation of US power in the past, the oil-revenue dependence of adversarial states provides a strategic opportunity for Washington. Ultimately, US policymakers have an obligation to protect this key US interest through pragmatic policy.

See also my old post on oil and foreign policy; The Oil Drum blog; and Greg Mankiw’s Pigou Club Manifesto