We will also have to cope with the increasing willingness of corporations to sell sensitive military technology to potentially dangerous foreign states. American, French, German, and British companies have all done so and, despite the fact that some of them have been exposed and their officers even indicted, these practices are likely to continue. Indeed many companies vigorously lobby their governments to permit these sales, lifting restrictions against technology transfers as a mere concomitant to deregulation and the drive for market share. Nor can the international banking system's critical support for the operations of denationalized terror networks be ignored. The nation-state was poorly situated to cope with this informal, virtual treasury as receipts and disbursements leapfrogged national regulation. It remains to be seen whether the market-state, with its sensitivity to any costs imposed on transactions by regulation, will do any better.
POLITICS AND REPRESENTATION
The emotional fusion between the People and the State begun by the state-nation and reconceptualized in the nation-state was intensified by the Long War. Governments undertook responsibilities in entirely new areas of the social and economic activities of their citizens, and the nation endorsed the actions of the State through a variety of means, including a vastly expanded voting franchise, an institutionalized role for labor unions, and greatly increased taxation. In the market-state, both sides of this reciprocal equation will change: there will be fewer formal mechanisms for endorsement by the public and the State will undertake to do less.36
Though I shudder to think so, I believe we can expect more reliance on the plebiscite, the initiative, and the referendum, especially as these become so easy and cheap to undertake once interactive cable television becomes universal in the United States. To some extent, we are already living under such a regime. What I have in mind is not the extensive use of referenda at the state level37 but rather the heavy reliance on frequent polling by American office holders. These are a kind of virtual-reality referenda, allowing the politician to test the results of a proposal. Like aircraft landing simulators, these polls give guidance to the politician without his actually putting himself at risk by calling for a referendum that he would have to support (or oppose), 38 and with the results of which he would then have to live.
At the same time, the market-state does not suffer from the acute shame experienced by the nation-state when the subject of campaign finance is discussed. When Chief Justice Earl Warren wrote that “Congressmen do not represent interests or trees, they represent people,”39 he was expressing an axiom of the nation-state. Doubtless he believed it, but it would be hard to maintain this view in light of today's functional patronage of candidates by contributors. If there are any readers innocent of this process, it goes like this: campaigns are funded by contributions from persons and groups with interests in the behavior of the candidate if she (or he) is successful. These campaigns are far too expensive to be funded by any candidate personally save the wealthiest individuals, and even these, if they are successful, lose no time in paying themselves back through postcampaign fund-raisers. Politicians of unquestioned rectitude, who would not dream of accepting a bribe—a payment for their personal benefit in exchange for a vote or action on behalf of the payor—have long now accustomed themselves to promising assistance (and sometimes votes) to persons and groups who give them money in the full expectation that the word of the politician is good. Their very rectitude is, ironically, the door opener to the contributor, because it guarantees the payee will deliver as promised. Whether there is anything wrong with this I am hesitant to say. Shouldn't the right-to-life candidate's campaign be the beneficiary of the funds collected to promote a right-to-life policy? Shouldn't the congressman anxious to alleviate unemployment in his district vote for a public works project there, and isn't such a man a suitable person for local business interests to support? But there persists a disquiet among those who believe the civics lessons of the nation-state, which hold that the votes of the public ought to be the only coin of the political realm. I believe a time will come in the transition from nation-state to market-state in which we will reflect on our current fund-raising practices with revulsion and an amazement that we tolerated them for so long.
But that does not mean that we will replace these practices, which seem so violative of the ethos of the nation-state; it is likelier that we will keep the practices and change the ethos. The market-state is not so squeamish. Indeed, its civics lessons hold that there should be no limits on campaign spending from any source so that the true opportunity costs of a candidate's defeat are reflected in the probability of his victory. The market-state merely tries to get the “best” person for the job in the way that universities try to get the “best” students: they set up a market that selects persons on the basis of predictions about their subsequent success. Fund-raising is to governing what SATs and high school grades are to college grades, accurate (if circular) predictors of a later performance that is, in the era of the “permanent campaign,” a repetition of the test itself. Governance becomes a matter of maintaining popularity, which requires further advertising, which requires further fund-raising. The candidate who is tied to important interests by virtue of his fund-raising is precisely the person whose vote will most closely reflect those interests. The more money he raises, the more attractive the candidacy, because successful fund-raising reflects the relationship between the importance of the interests he represents and his ability to represent them (as those interests judge it—and who are better placed to do so than they?). And this is just as well, because initiatives, plebiscites, and referenda are, like all elections, very expensive. The more frequently they come, the greater the match between economic interests and public policy; indeed, this is one of the attractions of the market-state. That this places enormous power in the hands of the media only underscores the change in its constitutional role with the emergence of the market-state.
We can expect an improvement in the quality of the civil service as taxpayers come to demand better performance from government and to appreciate the need for better compensation in order to secure that performance. Like the rise in tuition costs—which is mainly a matter of responding to the increased expectations of students in the context of fixed faculty productivity—a rise in government costs is almost unavoidable. Government bodies do not make decisions more efficiently, for example, because they have computers any more than professors give better comments on essays because these comments are composed on a word processor. This rise in costs will perhaps be counterbalanced by a narrowing domain of the matters we allocate to government. With respect to those responsibilities that governments of market-states retain, we shall expect better performance.
WELFARE
The nation-state undertook to be responsible for economic planning for the society, income redistribution, and democratic accountability, and it promised to underwrite (in varying degrees) employment, health care, education, and old-age security. The nation-state is rightly thought of as a new constitutional order, for not only are these responsibilities a significant departure from those of the state-nation, they also reflect the unique source of the nation-state's legitimacy, its promise to provide for the material well-being of the nation. This promise was made by parliamentary, communist, and fascist governments alike. The market-state need make no such commitments because its relationship to its society is formed on a different basis.
It is obviously true, however, that single-parent families, declining literacy, teenage pregnancy, and drug, alcohol, and tobacco abuse, represent significant economic costs to a society. Apart from the lost productivity of workers who put themselves in, or find themselves in, such difficult situations, there is the tremendous cost involved in providing family subsistence (or day care), unemployment compensation, medical insurance, remedial education, and so forth. Ought not the market-state to be concerned with these problems, even if the reason for its concern is different from that of the nation-state? It depends on h
ow effective you think the state—any sort of state—is in addressing such issues.
The nation-state, it is implied by some critics, created its budget problems because in undertaking to improve the welfare of all of its citizens, it both hobbled the opportunities for its most productive workers (through regulatory and redistributive legislation) and inadvertently crippled its neediest and least productive workers by tying them to programs that locked them into a cycle of dependency. Thus, it is alleged, the state became progressively less able to pay a bill that wasn't worth paying in any case. If there appears to be a consensus today that none of the problems listed in the paragraphs above—teenage pregnancy, drug abuse, etc.—could actually be cured by massive government programs, let alone by those that are likely actually to be initiated, 40 this reflects a profound shift in the expectations we believe can be imposed on the State.
The first casualty of this shift in opinion is the legitimacy of the nation-state. The State cannot covenant to improve the welfare of all of its citizens if it is generally believed that there are a great many persons in desperate straits whom government cannot—and, for various reasons, perhaps should not—attempt to assist. In the face of such a consensus of delegitiation, the acceptance of a new constitutional order becomes virtually an imperative and the shape of that order must be one that is compatible with that consensus. Thus the second casualty of this shift in view of the basis of the State is any large-scale effort by government to address social dysfunction (though it is assumed by market-state ideology that increased opportunity means increased wealth, and that this will ameliorate many social ills).
It may be that we can expect in the United States (and elsewhere) the sharp and permanent diminishment of the welfare state, with its safety net of public housing, free medical care, aid to dependent children, and unemployment allowances. Whether or not these programs are cut back, a simple refusal to maintain their ever-increasing costs with ever-increasing funding will in the not-too-distant future reduce their ameliorative impact significantly. At the same time, regulatory reform will proceed at a quickened pace. Regulation can be viewed, from an economic perspective, as a tax41 no less than direct taxes. Either a business can be taxed to pay for garbage removal or it can be required to remove its own garbage: either way, it pays. In a situation of perfect information there is no difference in the effect on the ultimate allocation of resources whether the tool of regulation or taxation is used. The difference occurs when deregulation is accompanied by tax cutting. Thus regulatory reform is not merely an effort to unchain innovative entrepreneurs and to remove noisome and idiotic rules from the workplace; when coupled with tax-lowering politics, it is also part of a larger effort to reduce the percentage of GDP taken by government (directly or indirectly).
For that portion of the nation-state's agenda that cannot be offloaded by the market-state, there is the alternative of privatization. In the American context, this term does not mean auctioning off state-run commercial enterprises (like British Rail) to private investors, but rather contracting out traditional government duties. In some cases, such as operating prisons and hospitals, this is simply a roundabout way of introducing more careful financial accountability and more efficient practices into public enterprises. But in other cases—notably education—it amounts to a more profound change. The nation-state was inevitably hostile to private education (many nation-states banned or attempted to ban private schooling) because it tends to remove such an important cultural experience from the inclusive objectives of the national agenda. In the market-state, however, with its skepticism about government and its compact with individual choice, the prospect of turning over education to parents is welcomed enthusiastically. Voucher systems—which effectively use the state as a tuition collector, rebating the collected fees to private and public schools that are chosen by parents—are likely to become the standard, not the exceptional, means of school selection. The default rule will perhaps always provide some publicly managed schools—though federalism makes possible the option of doing away with public schools entirely—but the days of virtually universal mass public education, like the similar experience of universal military conscription, are probably unlikely to continue. The voucher scheme is precisely the sort of expansion of opportunity the market-state undertakes to provide: more options, less coercion by law.
These speculations about how the market-state will play out in the United States must not be taken to obscure the point that different cultures will adapt the market-state in different ways. The Soviet Union, Great Britain, and Fascist Japan were all nation-states, after all, no matter how greatly their policies and politics differed. Different cultures will adapt the market-state in distinct ways. The American emphasis on individual rights, a laissez-faire business and trading system, and restless personal freedom will take the market-state in one direction; other societies will find the market-state just as adaptable to preferences for group responsibility, a state-inflected market, and long-term social stability.
The United States is remarkably well situated to become a market-state. Its multiculturalism, its free market, and its diverse religious makeup—all of which resisted the centralizing efforts of the nation-state—and, above all, its habit of tolerance for diversity give it an advantage over other countries in adapting its state to this new constitutional order. Insofar as the American people are able to resist calls to take back the state in order to unify the culture and reform dissenters, the agnosticism of the market-state will be well accepted. Nostalgia aside—which I feel more than most—t is important to identify which cultural and political struggles are simply hangovers from the dying nation-state and its resistance to the form of the new market-state and which are genuine choices that the market-state brings to life.*
CHAPTER ELEVEN
Strategic Choices
One also expects “elegance” in its “architectural,” structural make-up. Ease in stating the problem, great difficulty in getting hold of it and in all attempts at approaching it, then again some very surprising twist by which the approach, or some part of the approach becomes easy, etc. Also, if the deductions are lengthy or complicated, there should be some simple general principle involved, which “explains” the complications and detours, reduces the apparent arbitrariness to a few simple guiding motivations, etc. These criteria are clearly those of any creative art and the existence of some underlying empirical, worldly motif in the background—overgrown by aestheticizing developments and followed to a multitude of labyrinthine variants—all this is much more akin to the atmosphere of art pure and simple than to that of the empirical sciences.
—Von Neumann on the qualities of a good mathematical proof*
THE END OF the Long War has also brought an end to the usefulness of the strategic paradigm that structured so much of American policy during the more than three score and ten years of U.S. involvement in the larger world, from the reversal of his own isolationist policies by President Woodrow Wilson in 1917, to the proclamation of a Wilsonian “New World Order” by President George Bush in 1990. That paradigm was formed by the cluster of understandings about the American purpose in the world, the threats the United States faced in that world, and the strategies to be employed to achieve those purposes and respond to those threats. These understandings continue today to provide the partly conscious model by which Americans grasp world events. This model has roots in American continental expansion westward, in the idealistic imperialism of Theodore Roosevelt, and the haunting cadences of Abraham Lincoln. It only came to life, however, once the United States was brought face-to-face with an attack by a great power whose involvement with the dynamic of state changes in Europe juxtaposed a competing paradigm that was threatening and invigorating. On March 12, 1917, Germany sank the U.S. merchantman Algonquin on the high seas; on March 18, she sank three more American merchant vessels; on April 1, the Aztec, another merchantman, went down. These attacks—and not the more famous sinking of the liner Lusitania two years ea
rlier—propelled the United States into armed conflict, and the Americans have been endeavoring to “make the world safe for democracy” ever since.
A paradigm such as this does more than provide a model for describing events: it offers an explanatory worldview within which each new phenomenon can be fitted without altering the entire scheme. There will be zones of disagreement, of course, but the overall understanding is largely accepted by all parties to the debate. In the present chapter we shall study various new proposals for the American role in international affairs that describe themselves, or are described by others, as new “paradigms.” I think it can be shown that each of these is actually more of an implementing “policy”—like containment—than a new worldview, and also that each of the policies is really simply an application of the current paradigm, often even a repetition of a position within that paradigm that has appeared at an earlier period. Policies are distinguished by their pursuit of particular objectives, the identification of a particular threat, and their proposal of a particular strategy. For example, the purpose of containment was to defeat international communism. The perceived threat was communist aggression in Central Europe and in Asia on the one hand and threats of subversion in the formerly colonial states of the Third World on the other. The strategy employed was nuclear deterrence and conventional defense in the First World and military assistance augmented by covert aid to surrogates in the Third World. Alternative policies, like the liberation of communist clients and the rollback of the Soviet occupation of Central and Eastern Europe, or, at the other extreme, acquiescence and appeasement, were frequently proposed. These alternatives were not incompatible with the Wilsonian worldview, but after debates that look, in retrospect, less closely divided than they perhaps were, these alternative policies were decisively rejected by a series of administrations from both American political parties, Large elements of these parties actually preferred such alternatives but they were never able to fundamentally alter the policy of containment over a period of four decades and nine administrations. There were occasional departures from the rough guide I have just sketched, but even with these apparent departures U.S. policy was remarkably consistent over this long period.
THE SHIELD OF ACHILLES Page 36
