Sheng Hong

Though winning the Nobel Peace Prize, Barack Obama did not win loud applaud in the western world, not even in the U.S. itself. Major media of the U.S. mostly considered it still too early to award Obama this prize as he actually had no action but wishes and promises. The British magazine The Economist, however, held a neutral or even quite positive attitude. Some leaders of western countries also gave courteous congratulations.

Some non-western countries applauded, yet not loudly. Nobody in China seems enthusiastic about this news, from the government to common people. Mainstream of Chinese media either considered Obama’s new world order more of an idealization and too far away from reality to be seriously treated, or assumed this event as another intrigue of the U.S. to disarm other countries by pretending to advocate nuclear-free world and the mitigating international tensions, thus maintaining its hegemony position.

Despite all of these, Nobel Peace Prize of this year still sent out a signal and caused us to rethink what on earth these commentators from the North Europe had seen from President Obama’s new international strategy? Are there connotations current mainstream viewpoints failed to see?

I. Idealism or Realism?

Currently, mainstream viewpoints of the world considers it a realistic claim to expand armament and protect the visible national interests as “there are no permanent friends but permanent interests,” while emphasizing in adhering to morals, sticking to the principle of being tolerant and making concessions, and ultimately pursuing permanent peace of the world, is a claim of idealism. Though not being so noble, realism is practical; noble as it seems, idealism is so hollow. In American foreign policies concerning international strategies, there had always been debates over realism and idealism, and realism usually gained the upper hand except during certain special periods. 

However, this way of defining realism and idealism is questionable. The original meaning of realism is being operable, easy to be realized and having positive effects, yet many people use this word to refer to some visible, effective in short term, even compulsory measures and some initiative or dominant relationships with other countries. Though between the two there seems only a little miss, it is as good as a mile.

Based on the latter understanding of realism, the so-called realist international strategy refers to the artificially stable world structure with the national interests of the U.S. as the highest principle and military measures as the main approach, while the international order is the U.S. military force-based country bloc, with the western alliance countries as the major members and other Christianity countries as its periphery, resists , deters and suppresses the non-western countries, especially the Islam world. This kind of international strategy was sometimes made use of by the military industrial interest groups within the U.S. and the hawks of the U.S. government to direct the U.S. towards “Bush Doctrine”, which is characterized by unilateralism and the tendency of solving problems by force.

However, facts have shown to us that “Bush Doctrine” is not realistic at all. Even judging from the national interests of the U.S. only, “Bush Doctrine” has made the U.S. get more kicks than halfpence. By unilateralism, the U.S. has lost its rationality and legitimacy reputation in the international world. Military occupation of Iraq cost the U.S. and its alliance countries three trillion dollars in vain（Stiglitz and Bilmes, The Three Trillion Dollar War, W.W. Norton，2008） and caused the deaths of hundreds of thousands of Iraqis and several thousands of Americans. Not only having seen no rewards, the U.S. government also lost its international reputation since no weapon of mass destruction and proof of connection with Al Qaeda was ever found in Iraq. Moreover, the U.S.’s image as the liberator of Iraqi people was totally destroyed by prisoner abuse cases in Iraq. During the eight years, the U.S. might have killed several terrorists, yet it killed more common people and created more enemies for itself. Its middle-east policy, its conflicts with Iran, and its anti-terrorism strategy which showed the tendency of anti-Islam, all contributed to create an Islam world which holds more hatred toward the U.S., and produces countless suicide bombers. Instead of being safer, the U.S. people are more unsafe.

As an American who once lived in Indonesia, Obama definitely has a deep impression of the America’s foreign policy. He has seen that, the U.S. supports an autocratic and corrupted government in long term only for it own interests; financial speculators of the U.S. and the IMF, which is also dominated by the U.S., are still hurting Indonesia’s economy in many different ways even after the overthrow of Suharto regime, thus causing the spread of anti-Americanism among the Indonesians and the upsurge of Islam Extremism. After setting its way to democracy, Indonesia witnessed severer terrorism activities, including two Bali bombings, etc. Obama finds out that, as long as the American people put their own interest in the first place, the military forces, economic power, and democracy callings, which they have firm faith in, are not bound to win favorable feelings and cooperation from people of the other countries（Barack Obama, The Audacity of Hope, Three Rivers Press, 2006）. In fact, it is Bush Doctrine which is inoperable. 

His experience with Indonesia, a typical Asian Islamic country, in particular, convinced him that being enemy with the whole Islam world is the largest danger faced by the U.S., and only by cooperating with the non-western world could the U.S. see its future. Arrogance induces disgust, and forces causes resist. A society could be effectively governed not only by enforcement but also by people’s recognition of the legitimacy of governance. It is the same with the world. On the contrary, benignancy sees more chance of being repaid by benignancy, and kindness sees more possibility of harvesting kindness. That is to say, different from people’s common impression of realism, “kindness” is more operable, and “following morals” is more realistic. Therefore, though we can not exclude Obama’s flavor of idealism, it would be for him no doubt to have exerted the effect of realism, by calling for a nuclear-free world in Europe; making nice to the Islamic world in Egypt; also stopping the plan to deploy antimissile systems in Eastern Europe and claiming "No world order that elevates one nation or group of people over another will succeed” on the United Nations General Assembly; which not only making the other countries benefit from a fairer international relationship with less confrontation, but also granting the U.S. with substantial rewards.[Page]

II. The Perfect Timing for U.S.

From the U.S.’s standpoint, it is the perfect timing for Obama to shift the U.S.’s international strategy of neoimperialism to that seeking permanent world peace. Why? This is because the U.S. has just gone past its peak season and is about to enter a long-term declining period.

The U.S. was founded in 1776 and became the largest economy in the beginning of the twentieth century; after World War Ⅱ, it became the strongest military power and dominated the world politics; in 1990s when the U.S. had just won the Cold War, a New Technology Revolution was going on in the U.S. and pushed the U.S. to the summit since its foundation.

However, the America Empire model, which made the U.S. the strongest military, political and economic power in today’s world, is not stable. This empire model is to issue dollars through trade deficit, to impose seigniorage on the whole world through issuing dollars, to develop armament by seigniorage, to guarantee the security of American assets through strong military force, and then to sell these safe assets to foreign investors, most of which are trade partners of the U.S..  Dollars then flow back to the U.S.. That’s how a currency circulation is completed. For instance, trade deficit of the U.S. in 2007 was about   700 billion U.S. dollars, its national defense expenditure was about 628 billion U.S. dollars, and its net inflow of capital account was about 772.5 billion U.S. dollars.

The core of this empire model is the safeness of U.S. assets. If American people can not sell their assets to other countries, domestic monetary supply of the U.S. will decrease, and interest rate of Treasury bond and Federal Reserve re-loans will rise, then American people’s purchasing power will be reduced. Thus, they will buy fewer commodities from other countries and trade deficit will then fall down. The whole circle will then be broken. However, deep-root factors overthrowing the asset safeness are buried in this empire model itself.

Firstly, the military advantage of the U.S. lies in developing military industry and military science by combining the government and the business industry. A military industry interest group with political influence was thereby created. Under the political structure lobbying activities is legal in the U.S., the military industry interest group could influence the foreign policies of the U.S., and made it tend to settle its disputes with other countries through use of force, and more eager to see tension and confrontation among countries rather than alleviation of their relations. This definitely would result in confrontation and even hatred of many countries and nations towards the U.S. Though we condemn terrorism, we have to say that the September 11 Event is the extreme form of expressing hatred. As a strategic terrorist action, the most fundamental influence of this event is making people start to doubt the safeness of the U.S. and its assets. [Page]

Secondly, the U.S. relies heavily on developed financial markets to sell its assets to foreign people. For their own interests, financial institutions compete against each other to launch new financial products with higher and higher risks under the situation that the traditional financial product market is already saturated. Investment banks and fund managers are willing to take larger risks due to such asymmetric incentive systems as options and year-end bonus. Stock exchanges also loose their regulation on trade of high-risk financial products due to competition pressure. As Wall Street has such strong lobbying capability that even the U.S. Congress can not pass bills aiming to strengthen financial regulation. Besides, it is widely believed that common investors decide their investment in accordance with expected return without regard to the fact that they are actually in common loss due to limited life span. This situation will result in the macroeconomic phenomenon of deflation and depression right after economic overexpansion. The financial crisis started from year 2007 heavily defeated people’s faith in the safeness of American assets, and the whole world began to shrink back at the sight of American assets.

The American Empire Model began to turn aside from balance. Net inflow of the Capital Account of the U.S. decreased from 264.9 billion U.S. dollars in the first quarter of 2007 to 46.6 billion U.S. dollars in the first quarter of year 2009; Current Account deficits declined from 196.9 billion U.S. dollars to 101.5 billion U.S. dollars, which indicates that the seigniorage of the U.S. was shrinking and funds for the use of military objectives thus also fell down. Though there will be fluctuations afterwards, general direction of this tendency will see no big changes. A vicious circle will then be formed. Decrease of military expenditure will result in further doubts on the safeness of American assets and further decline of purchase of American assets. Trade deficits of the U.S. will be further reduced and its seigniorage income then will further decrease until the American Empire Model finally collapses.

The above-mentioned two problems can not be solved under the U.S. institutional framework due to inner factors of the U.S. institution. Therefore, the U.S. could neither avoid the next financial crisis nor get rid of the influence of military industry interest group completely as long as this empire model continues to be used. That’s why decline of the U.S. is unavoidable.

Obama should have sensed that it’s impossible to maintain the previous level of U.S. military expenditure through selling Treasury bond to foreign countries. He decides to give up the neo-imperialism strategy at this moment and to promote new international order of world peace at this time. This is the best choice of the U.S. because if the decline of the U.S. is expected to be inevitable, the best way is to make an active withdraw rather than be confronted with a passive kick-out. Also, the perfect time is the moment when peak season has just passed and decline just begins. At this time, the U.S. still stands at the most powerful position and will enjoy a more favorable position in the new world order framework which it proposed, thus making contribution to world peace while winning the largest share of national interests for the U.S.. In contrast, if the U.S. tries to resist this inevitable decline and maintain its hegemony in longer term, it may end up with a lowered international position in competition among countries and an unfavorable position in the newly-formed world order in the future.[Page]

III. Obama’s Success Needs China’s Help

However, Obama’s new international strategy will encounter strong resistance due to the characteristic of the political structure of the U.S. It could be foreseen that he will witness strong opposition from the Pentagon, military industry groups and congressmen in military industry regions, who are sitting in what he call “Iron Triangle”, which has influence over the American foreign policy. Certainly they will not speak of their interests plainly. Instead, they will use the name of national interests and borrow the old tradition of Cold War. Though most of the American people will not take the side of military industry groups, they are easily influenced by the public media. However, these military industry groups are just those who stand behind the national media by being either their shareholders or the major advertisement clients. That’s how the American people agreed to send troops to other countries so as to wipe off “threats” to the U.S. and to put tremendous resources into military fields to resist “vicious enemies” of the U.S. Moreover, they seems have no memory of history either. It won’t be a difficult task to prove this point if we look back at the history of Vietnam War and Iraq War.

If the “Iron Triangle” wants to crash Obama’s new international strategy, it must “create” a new enemy of the U.S. This new enemy should not be a common enemy, but a very powerful one who has substantial interest conflicts with, political cleavage and culture difference from the U.S, and whose attitude could not be easily changed by Obama’s gesture of goodwill. On the wait-list of America’s enemies, China ranks the first. Although the Islamic world has a long feud of thousands of years with the Christian world, it is not a unified whole. Some of the Islamic countries, such as Saudi Arabia and Pakistan, are even alliance of the U.S.  Islamic