The theme of these lectures reflects an anxiety for the continued freedom and independence of the constitutionally governed nation-states. In 1983, military security demands the close collaboration of the nations of the West, but does it require the formation of a totalitarian bloc to match the satellitic cohesion of the Soviets? Secondly, given the increasing pressure for ever-greater levels of economic integration, how much freedom will nation-states have to set their own objectives and to choose their particular policy instruments and institutions?
Military security in a nuclear age and the alleged efficiency of economic interdependence are the arguments used to force the industrial nations of the West along the road to political unification. At Williamsburg, Virginia, the seven leading industrial nations put their stamp of approval on American defence proposals as well as the U.S. program to promote the convergence of the economic policies and performance of the group.
The meaning of Williamsburg is quite simply that the global community has arrived and that the industrial nations of the West are transforming themselves into a superbloc to match the cohesion and forced unity of the members of the Warsaw Pact. NATO, the OECD, the IMF, and GATT are organizations without authority or the power to make decisions. Making recommendations, searching for consensus, dialogue and debate—the time for all this is past. Government of the Western world, under the hegemony of the United States, is a distinct possibility by 1990.
The summit statement on arms control of May 29, 1983,1 agreed to by all seven nations, contained the following declaration: “the security of our countries is indivisible and must be approached on a global basis.” President Reagan, in supporting the declaration, effectively extended the protection of the Monroe Doctrine from North, Central, and South America to Europe and Japan. With this single sentence, the industrial nations of the West became a single, homogeneous bloc, and the six members underlined their gratitude for and submission to the absolute dominance of the United States by agreeing to “proceed with the planned deployment of the U.S. systems (Cruise and Pershing II) in Europe at the end of 1983”—unless the Soviet Union agrees to meaningful and constructive concessions in the negotiations on strategic weapons, intermediate-range nuclear missiles, and chemical weapons.
Confirming the objective “to maintain sufficient military strength to deter any attack, to counter any threat, and to ensure the peace,” the conference studied the American proposals for the integration of the national economies and the convergence of economic policies. Military strength depends on productive power, and the optimization of productive power requires the clear recognition of the bloc’s priorities, the organization, acquisition, and development of the resources of all the members, and the allocation and budgeting of the total resources for maximum efficiency and output.
Ignoring the desire of each nation to retain as much freedom as possible in setting its own priorities and the policies necessary to the resolution of its particular problems, the conference placed the needs of the bloc itself ahead of the requirements of the merging members. “East-West economic relations should be compatible with our security interests,” states the declaration,2 thus placing a large question mark on the future of European-Soviet trade, though not necessarily on American grain exports.
The path to economic unification is spelled out in an annex detailing the necessary “near-term policy actions leading to convergence of economic conditions in the medium term.”
In the realm of monetary policy, all nations are agreed on a “disciplined non-inflationary growth of monetary aggregates and appropriate interest rates,” a clear assumption that the relative position of the members is in equilibrium.
The nations will pursue a deflationary fiscal policy by exercising restraint over government spending, by reducing structural budget deficits, and by keeping in mind the impact of tax and expenditure policies on interest rates and economic growth. Since the seven members are also expected to increase their support of NATO and military expenditures, it is clear that the interests of consumers are being subordinated to the objectives of the military union.
Just as restrictive of national freedom to make one’s own choices as the monetary and fiscal packages is the agreement to pursue greater stability of exchange rates and policies of convergence and co-ordinated intervention in exchange markets. This attempt to introduce a 1983 version of the Bretton Woods monetary system is bound to fail for the same reason that Bretton Woods failed. One cannot packet together nations of unequal size, resource wealth, and productive power except under military and economic pressures.
It is sensible to agree that for some purposes, such as military security in this nuclear era, nations must join in collaboration and alliance. It is a question, however, if the creation of a supranational bloc on the same model as the Soviet system is called for. Internalizing all military power in a single high command would be the surrender of the very values and traditions that we cherish, the freedom to choose the principal directions of national life. For military security inevitably demands the integrated economic community, and this adds up to the loss of national autonomy. Countries that have no control over their monetary system, their tax and expenditure policies, and their exchange rates are not sovereign.
Collective action under the leadership of the superior power, the United States, has been the Western option, but it has, until recently, taken the form of alliances and treaty organizations in which all partners are heard and presumably their views taken into account. The motivating principle behind the degree of centralization accepted at Williamsburg seems to be a conscious longing within the American leadership for the same terrifying accumulation of powers and degree of cohesion and political conformity in the West that is the Soviet reality. One has to ask if it is necessary to convert an organized system of alliances into a cabinet of satellites and so degrade the very system of Western traditions of pluralism and liberty that we proclaim, in order to achieve the alleged advantages of the efficiency and discipline that we impute to the members of the Warsaw Pact.
Centralization of power and authority that begins with the military and economic sectors leads inevitably to pressures for the integration of all decision making and a degree of commitment and obedience to the bloc’s objectives that leave only marginal room for the national purposes. Such a commitment can hardly be expected of democratic nations possessing a long history of freedom to set their own goals and to choose the instruments of policy necessary to their achievement.
To create a Western bloc involves the location of the foundations of military and economic power in a single authority, the most powerful member being the United States. The foundations are the centralization of all decision making; the unification of the total resource base of the member nations; the control and allocation of all resources, human and material, to achieve maximum output; forced resolution of conflicts between the bloc’s objectives and national goals; and finally the subordination of the interests of consumers and the standard of living generally to the goals of increased productive power and military security. Efforts to regiment the Western world in this fashion would require, if not the terrorization practised in the East, enormous economic pressure and the terrifying threat to abandon the recalcitrant to the nuclear nightmare.
Before we proceed further in the substitution of the present system of international relations, the pluralism of the Western alliances, for the tightly knit bloc control that typifies the Soviet monolith, we should examine very carefully the pressures that are being exerted. One virtue of the present international system is that, while the United States is clearly the leader of the West, it has to take account of and bring into consensus or compromise the views of its partners. The creation of an American-Japanese-European superbloc under American hegemony allows no such flexibility or dialogue. We become more and more the satellites, forced to subordinate national priorities for the interests of the bloc system.
If we go this route, we have to ask ourselves how different would the two systems of political control over the lives and times of our citizens then be. The major difference would appear to be the greater diffusion of property and private power in the West, but how quickly could that be eroded in the new system of centralized decision making?
Given a superbloc in the West, the two political systems would have much more in common than is supposed. Each could annihilate the other with its nuclear power. Each would emphasize the growth of industrial and productive power as a priority. Each would subordinate the interests of the consumer to military and economic growth objectives. As the people of the Soviet bloc are powerless before the bureaucratic authority, so too would the people of the West lose power to our corporate and public monuments of stone. The difference would be one of degree.
The argument for military globalism is that only then would the West have the cohesion, discipline, and the nuclear inventory and configuration that could effectively oppose the Russian menace. Experts, however, such as Admiral Robert Falls of Canada, Rear Admiral LaRocque of the United States, and field Marshal Lord Carver of the United Kingdom, tell us that we have more than enough nuclear weaponry already in position to inflict untold casualties and destruction on the Soviet Union. Since the enemy can do the same to us, both sides are in the same position—no possible victory, only complete and utter defeat.
It is a good thing to know that the Western alliance has more than enough nuclear missiles; the bad thing is that we keep on building more; the worst thing of all is not to know why—why more production, why more deployment, why a superbloc of the West. If we are not satisfied with the power to annihilate, what will we be satisfied with?
NATO officials have themselves maintained that the 1979 decision to station intermediate-range nuclear missiles in Europe was psychological and political rather than military. The NATO generals, in their venture into psychology, argue that the highly visible death-dealing Cruise and Pershing II missiles deployed on European soil will comfort the populations of Europe. It is at least arguable that fear, despair, and hysteria at the sight of some 572 of these monsters of destruction may be the paramount response, with Europe facing a hot and riotous period as installations go forward.
NATO and the Warsaw Pact are the instruments of their respective masters. They are neither political nor executive in respect of their powers. Both NATO and the Warsaw Pact are genuine deterrents against perceived threats. We have here the classic instance of two bureaucracies leaning upon each other for nourishment. As each screams its defiance, they guarantee the continuity and growth of the functions and purposes of the other. Russia uses the belligerence of NATO to maintain its grip over its Eastern satellites, while the Warsaw Pact serves as the rationale for stripping the industrial nations of the West of sovereignty in their military and economic policies and creating the United States supranational bloc.
The summit conference is now an established coming together with the purpose of stopping the Russian threat. With this objective there can be no dispute. In a nuclear era, we can hardly find security on a nation-by-nation defence. The meaning of Williamsburg, however, is that we intend to create the identical military and economic monolith in the West that exists in the East. Thus there will be two, and two only, supranational powers facing each other, each power believing that the other is all black while absolute right and justice remains with it alone. Williamsburg brings not a movement toward the foundation of a true international order but the absolute polarization of two political crusades treading a head-on collision course.
Williamsburg has brought us back to the bipolar world of the 1950s and John Foster Dulles, with Moscow speaking for the East and Washington speaking for the Canadians, Europeans, and Japanese. In the fluid, unpredictable, nuclear atmosphere of violence, the polarization can only deepen the tensions and expand the areas of conflict, making reassessment and negotiation all the more difficult since neither side will want to risk the possible humiliation of retreat and loss of face.
Williamsburg reaffirmed the deployment of the intermediate-range nuclear missiles in Europe; it announced the creation of a Japanese-American-European superbloc. We already live in a world that faces annihilation in the event of a nuclear war. Our future will be, as Jonathan Schell describes, “the republic of insects and grass.” The superbloc set forth at Williamsburg adds little if anything to the military unification that already exists at NATO. It makes little sense to add to the arms or improve the system when you have already passed well beyond the point of mutual annihilation. If more arms are redundant, more food, water, education, health, and housing for the underprivileged of this world are not. Reducing the production of arms by two weeks would enable us to double our spending on these vital elements in the world’s standard of living.
Despite all the headlines, all the editorials, all the meet-the-press and week-in-review commentaries, there is no evidence that the danger of nuclear war is growing. There can be no winners in a nuclear holocaust. There is something fundamentally irrational in the confrontation of two powers that keep their citizens in anxious suspense even though each has brought the other to a standstill. When victory is not possible, when further action means utter defeat, it is time to accept the deadlock, relieve the tensions, and create the environment that will enable all peoples to pursue the ways and means to creative living.
An American-Japanese-European economic bloc to support the military stance makes good sense from the American point of view, if it can be obtained under the terms outlined in the Williamsburg agreement, which in effect defined the basic economic unit as the Western world. Given the total commitment of the United States to guaranteeing the security of the industrial West, including Japan, the fusion of economic policies as they converge with American objectives follows as the necessary condition.
Thus President Reagan outlined the agreement as “policy actions leading to convergence of economic conditions in the medium term.” Essential to the agreement is the understanding that East-West economic relations should hinge upon and be compatible with the security interests of the West. This restores the United States to the unquestioned political, economic, and military dominance that it enjoyed in the two decades prior to its involvement in Vietnam.
That the United States should be the heartland, the core, of Western values and principles is not in dispute. That it should exercise leadership, persuasion, and direction by example is again not the issue. That the United States should be in a position to impose and to dictate policies and priorities for the other nations of the West would be the end of the politics and pluralism of the Western world. It is this that is unacceptable.
Williamsburg not only defined the industrial West as a global community, it outlined some of the terms of global governance. The leaders agreed to maintain appropriate interest rates and to avoid the inflationary growth of monetary aggregates. They further agreed to reduce their budget deficits by exercising stringent control over government expenditures—at least in the areas of housing, education, health and welfare, and social security, but presumably not in the area of military and defence expenditures, where all members are expected to increase their shares of spending. Equally fundamental is the agreement to work for stabilized exchange markets and, by restricting the use of exchange-rate policy to solve critical national problems, so to strip away the flexibility open to sovereign and autonomous nations and their elected leaders. In other words, the needs of the bloc take precedence over the particular priorities of the member nations.
The problem with extending the concept of interdependence from the military to the economic sector is that we are dealing with the creation of a bloc composed of nations which are now sovereign, which vary in resource wealth, size of markets, needs for capital, and are unequal in productivity and overhead costs. The policies of convergence leave no room to manoeuvre for the solution to these imbalances and the problems that they bring.
The heightened anxiety caused by the increasing polarizations of the two superpowers prevents people from arguing the unsupported and unproven claims that economic interdependence will yield a greater output and that maintaining the benefits of their greater efficiency is vital to Western survival. The blunt facts are that economic interdependence demands the integration of national economies and, therefore, the denial of freedom to an elected government to address a nation’s problems and priorities.
A nation will then be defined quite simply as an area, the part of a greater entity, an area where resources are plentiful or an area where labour is cheap or an area where capital is plentiful. In the relevant market of the West, some regions will specialize in steel production, others in chemicals, pulp and paper, cars, agricultural products, etc. Engineers, using technical principles of location theory, will put populations, money, and land in their computers and position the producing facility accordingly. Unstated is the basic assumption that, to make economic interdependence work, there must be a perfect mobility of labour—that is, people must be willing to follow capital, the more perfectly mobile factor, as it moves across nations and continents. Equally unstated and undebated is the pretence that immigration laws and other restrictions do not exist.
The free movement of goods, services, capital, and persons across borders—“what an arrogant and pretentious statement.” And what a peculiar definition of freedom when the price of a job requires workers to leave home, heritage, culture, tradition, language, and the community of friends and family.
Globalism is defined in economic terms as the optimal allocation (use) of men and women, resources and capital, across the broad spectrum of the bloc. Globalism, therefore, is specialization—but specialization means an ever-growing dependency. Nations become famous for making the wings of a plane but not the fuselage, for mining the ore but not milling it, for cutting down the trees but importing the furniture. Gone is the balanced growth that would enable a state to offer the wide range of career opportunities to a youth educated at great expense.
The specialization process imposes a planned dependency on a nation. Specialization makes interdependence necessary after it has first made the nation vulnerable by creating an unbalanced economy at home. Specialization in resource exploitation makes the nation subject to the terms and conditions imposed by the industrial powers for its manufacturing needs. The converse is also true.
Consider the logic of international economic interdependence, that is, the deployment of the resources of the globe according to a single most efficient scheduling, an abstract idea at best. Putting the mental image to work, planners then talk glowingly of a gross world production that is greater than the sum of the national outputs. Therefore, there are benefits for everyone that remain to be divided, although this is never spelled out.
If we accept the assumption—which, incidentally, has never been demonstrated—that there will be a greater world output, how is it to be shared? Who will decide the distribution? What percentage will go to improving the standard of living of consumers? What percentage will be invested to increase the military power of the bloc or to validate the perennial promise of a better tomorrow? Will the developed or less developed nations fare best? Which nations will benefit now and which in a distant future?
More fundamentally, who in our brave, new global world will make the decisions? Since each nation’s resources have been placed in an international pot and its manpower assigned some partial and specialized role, the nation’s freedom to create the instruments necessary to the achievement of its own priorities has been sharply reduced. As the scope for national decision making declines, the instructions coming from the supranational authority increases. The professionals in the international bureaucracies will save the nations of the world from politicians and democratic politics with “all those noisy and incoherent promises, the impossible demands, the hotchpotch of unfounded ideas and impractical plans. . . .”
The new reality with which Canadians must deal is simply this—the United States considers the security of the Western world to be indivisible with its own. Given this purpose and its acceptance by the leading industrial nations, the United States government believes that the task it has undertaken requires that it obtain the unqualified support of the Canadians, the Europeans, and the Japanese in all things political, economic, and military. This is the commitment that was demanded at Williamsburg. This is the commitment that was given.
Williamsburg created the superbloc of the West. Is that superbloc to be America and the six satellites or America and the six allies? In any event, Canada’s interests are being poorly served by maintaining the pretence that we are a leading industrial power. We are not. We will never develop the set of strong domestic policies needed to give us control over the directions of our economy until we accept that fact.
Neither Japan nor Europe nor the United States has any intention of helping Canada to become an industrial power. These three industrial giants are each fully capable of supplying a whole range of manufactured products, cars, televisions, steel, radios, capital equipment, tools, and so on, to world markets. Canada’s manufacturing potential is neither needed nor will it be welcomed in a world that is moving, despite all protestations, toward increasing protectionism. As these three powers divide the world into industrial spheres of influence, Canada’s role will be the supplier of raw materials and energy resources.
Canadian economic policy has, since Confederation, rested on the twin pillars of resource exploitation and capital imports in the colonial form of direct investment. Both policies have been used to such excess that Canada is presently the most vulnerable nation in the world, with its abnormal dependence on export markets, trade cycles, and corporate-capital flows.
To bury ourselves in the bosom of the American superstate is to condemn Canadians forever to the role of suppliers of raw materials. The current trade conflicts between our two countries are an example of the challenge that we face. The United States has always insisted on at least an equilibrium in their balance of trade with us. As we continue to ship billions of dollars of petroleum and mineral resources, they will insist on an equivalent return flow in manufactured goods. For every million dollars in wages and salaries that we export, we will be importing three to four million dollars in American or Japanese or European wages and salaries. In employment terms, we import the labour and effort of three to four workers for every Canadian employed.
How are we as a nation to counteract age-old policies? Are we nasty nationalists if we try? Moving Canadian economic policies into line with those of the United States—consequences, as President Reagan phrased it at Williamsburg—means that we are serving the interests of the bloc rather than our own. It means that Canada will continue to concentrate on the extractive export industries and that domestic and imported capital will abandon the pursuit of industrialization. No industrial policy for Canada but rather the age-old specialization in primary production, with this difference—that it will no longer be the result of market forces and inept government leadership but will be the outcome of the political pressures imposed on us by our trading partners at Williamsburg.
There is no abstract set of international policies that can simultaneously satisfy the needs and requirements of nations as unequal in wealth and power as Canada and the United States. Each nation in the world must define and pursue the strong domestic policies tailored to the development of its own material and human resources. Free trade was the appropriate policy for Great Britain at the zenith of her power in the nineteenth century, but, as Bismarck remarked, “free trade is the policy of the strong,” suitable for the nations that were industrial leaders but not necessarily for nations that wanted to be.
Canada’s tariff policy of 1879 was a national policy, although it turned out to be counterproductive. Infant industry protectionism can be made to work if it is accompanied by strong industry creation, as the policies of both the United States and Germany have shown. But Canada failed to create the industries that the tariff was designed to protect, and so the foreign investment and the branch plants took over.
Reaganomics, the emphasis on military power and economic hegemony, is clearly a new national policy designed to establish in the West the measure of cohesion and unification that has existed in the Soviet bloc. Those searching for Canadian policy options in the eighties are not nasty nationalists (what nation blindly places the interests of others before its own?), but Canadians genuinely concerned with the vulnerability of the economy that they are turning over to the next generation.
President Reagan was elected on the promise to make the United States strong again, to restore American prestige and power to the level of the 1950s and the 1960s. He has done so. At Williamsburg, with U.S. nuclear might as the lever, he guaranteed the security of the West on condition that they follow American economic initiatives, and then—less tactfully—become American satellites. A weak and uncompetitive American economy is back in the saddle again, dictating objectives, formulating policies, and assigning roles to the leading nations of the West.
Hyping the unthinkable, the threat of nuclear holocaust, has brought great dividends to the rhetorician of the White House. He cannot lose. When the nuclear tensions lessen, as indeed that insanity must, the United States will have regained undisputed economic leadership of the West, and this is what the exercise is all about.
If Williamsburg is to be Canada’s future, that future is bleak indeed.