The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.
—KARL MARX AND FRIEDRICH ENGELS
Capital needs the means of production and the labor power of the whole globe for untrammeled accumulation.
—ROSA LUXEMBURG
The Council on Foreign Relations is, above all, the place where the ruling capitalist class, together with its professional class allies, develop the grand strategy and tactics of creating empire: United States’ global hegemony. Grand strategy must have goals, a vision appropriate for policy formulation, but also must be flexible enough to understand the unpredictability of historical developments and the need for collective planning, as well as the occasional reappraisal of tactics. The Council is organized to do this necessary research, thinking, debating, and planning to make such collective decisions under the auspices of the capitalist class. Over a period of decades, the CFR has—through its many programs and activities—gradually but successfully developed and implemented a coherent vision of global capitalist development to replace older ideologies and practices, especially Keynesianism. What has come out of this effort is the current world system, the informal empire of neoliberal geopolitics. This CFR worldview and grand strategy—the defining political and economic paradigm of our era—is neoliberal, “free market,” corporate globalization, together with a combination of geographically oriented political and economic thinking and action at the level of global power politics, summed up by the term geopolitics. For the purpose of analysis in this chapter, the neoliberal and geopolitical policy frameworks are kept distinct, but they are united in actual practice as neoliberal geopolitics. At the level of grand strategy and goals, neoliberalism as a system of exploitation and as an ideology, the history of how the CFR and its members helped create neoliberalism, and the geopolitical and geoeconomic strategies for global implementation as outlined by key Council intellectuals, will be discussed. At the level of tactics, the role of “small wars,” “soft power,” and the U.S. government as Goliath will be examined.
Although the number of Council publications and communications, including books, periodical articles, videos, blogs, op-eds, interviews, and speeches is vast, a review of this literature allows a selection that will illuminate the CFR worldview, its definition of the capitalist-class interest, as well as its imperialist grand strategy and tactics during the 1976–2014 period. Many of the central economic and political policies of the United States and a number of other key world powers are influenced and framed by this Council/capitalist-class worldview. It has become a pervasive force, powerful in many nations and arenas, giving concrete meaning to the term “ideological hegemony.”
One of the overall core functions of the CFR is a no-holds-barred ongoing effort to facilitate the expansion of opportunities for capital accumulation for the U.S. capitalist class and its corporations. Such expansion in search of investment and profit opportunities everywhere faces a variety of barriers, a key one being territorially organized state power. The world is organized as national units, each with a complex power structure and socio-politico culture, often with conflicting interests and ideologies, reflected in ruling classes, liberation movements, and class, ethnic, and gender struggles. As Marx and Engels observed well over 150 years ago, capital desires free-flowing movement, and thus penetrating state frontiers to conduct business, exploit human and material resources, and accumulate capital becomes a central focus. There is a contradiction between internationally oriented capital in the form of multinational and transnational corporations and the territorially organized state system, with each nation having the potential or actuality of sovereignty. John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna have described this conflict and its implications:
Just as, nationally, any state programs that aid the working-class majority are targeted by neoliberalism, so internationally, the primary goal is to remove—in the name of “free trade”—any limits on the power of multinational corporations exercised by nation-states. This mainly hurts the weaker states, where such rules are more stringently imposed by international organizations . . . and where there is less capacity to resist the intrusion of global corporations.385
Historically, military conquest and occupation, informal and formal colonialism, and economic efforts through such organizations as the IMF and World Bank have all been ways to overcome this key contradiction and open the way for the expansion of capital. These methods continue into our present historical epoch, but other, subtler means are also at work.
Every historical system that aims to be world-spanning has had its own unique deep structure: mechanisms for human and natural resource control, exploitation, and dispossession as well as legitimation of the system. This was true of ancient Rome; fascism in Germany, Italy, and Japan during the 1930s and 1940s; the British Empire of the nineteenth century; Keynesian liberalism; and the globalized monopoly finance capitalist–dominated neoliberalism of today.
Ancient Rome had vast emperor-directed military operations that conquered resource-rich lands, violently dispossessing and enslaving peoples who were then mercilessly exploited to benefit an agriculturally based small dictatorial ruling class. Fascism, taken to an extreme in Nazi Germany, was also based on the strong state and conquest of foreign lands to gain territory, resources, and slave labor. Additional central aspects of fascism included the destruction of trade unions and other workers’ organizations, and the belief in an extreme form of Social Darwinism—supposedly superior races and individuals should ruthlessly rule over and exploit those who were not considered part of the self-defined “master race.”
The later British Empire system had a more indirect capitalist dispossession and exploitation at home, accumulation through extraction of surplus value from wage labor although workers struggled to gradually achieve some limited rights. This was combined with more brutal exploitation and dispossession in their colonies. Elements of the British system served as a model for the Keynesian system of New Deal demand management. In their Keynesian scheme, unions for workers were accepted with the “class compromise”; state-imposed regulations restrained some actions of capital; taxes on corporations and the wealthy were relatively high; state planning, industrial policy, and state ownership existed in many cases; and there was some attempt at achieving full employment and a level of social welfare of rank-and-file citizens through varied forms of social security.386 This system has been replaced today in economic thought and action by the doctrinal cluster of ideas called “neoliberalism,” formally dedicated to the free movement of capital and goods worldwide (free markets), and multinational and transnational corporate globalization, promoted and enforced by state power. This is capital’s default position, the direction that the system always pushes toward, taking into account the level of class struggle from below. Besides being an economic prescription, the corporate liberation project of neoliberalism also represents an ideological attack on the ideas of collective property (socialism), national development (national liberation), and social solidarity (trade unionism and community). Instead, individualism is exalted. David Harvey has offered a useful short definition of neoliberalism:
A theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defense, police, and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. But beyond these tasks the state should not venture.387
Neoliberal corporate globalization operates through global management institutions, such as the World Trade Organization, International Monetary Fund, World Bank, and United Nations, and through nation-states and private, for-profit corporations. These are all powerful organizations that are hierarchical/dictatorial, bureaucratic, potentially perpetual, and have limited liability. These interacting institutions have created a new world system where the powerful nations, especially the United States, still have sovereignty, but for many other countries real sovereignty and state autonomy have been severely weakened. For these latter nations, state power has been transferred to investors/speculators, corporations, markets (especially financial markets), international bodies, and the more powerful nations, especially the United States. The power of individual large multinational corporations often exceeds the power of individual smaller states of the world. The steady increase in globalized corporate power thus poses a key question: Is this power now on a par with the strength of even the largest of states, such as the United States itself? The freedom of capital to move wherever and whenever it desires has often meant the loss of rights to employment for workers, since capital will be drawn to where labor is cheaper and regulations more lax. Such freedom for capital has also allowed the undermining of community-controlled political structures in favor of corporate-run ones. Precariousness for workers through dispossession—of union and job rights, property through foreclosures, rights to health care and education, and destruction of communities—is a frequent result.
In the globalized, neoliberal corporate system of exploitation the world capitalist class uses its monopoly of liquid capital, especially its control of finance, to exploit much of the world’s land, natural resources, and workers, funneling much of the resulting accumulated riches to a relative handful of wealthy individuals and families in the empire’s urban power centers (New York City being a key one). The spread of this system has been the overarching goal of the CFR and its allied network of institutions in the period under consideration here, 1976 to 2014. As will be illustrated, this has created a world-spanning investment, production, trade, and speculative system, an informal global political-economic empire whose dominant power is the United States, its corporations, and its financialized capitalist class. Neoliberalism represents both the national capitalist-class interest of the United States, as well as the interest of this U.S./multinational financial oligarchy, and has been vigorously promoted by leaders and members of the Council. Agreement on the goals of neoliberal corporate globalization is, in effect, with few exceptions, a prerequisite for CFR membership today. As shown in prior chapters, the membership selection process mainly brings in strong supporters of neoliberalism, and generally limits critics to those who disagree on the tactics needed to implement this worldview, not its fundamental premises.
The actual practice of neoliberalism—adopted by the political parties of the right, center, and center left worldwide—is sharply different from its theory. This is because neoliberalism is first and foremost a capitalist-class project and ideology led by the CFR together with an internationalized and financialized U.S. capitalist class allied with key European and Asian capitalists. Its bottom-line goal is to increase the wealth, income, and power of capital, especially international finance capital, by any means necessary. This is an aspect of the fact that capital markets are now an extremely powerful force, representing the concentrated power of the financialized world capitalist class. Some, like CFR member and former deputy secretary of the treasury Roger Altman, argue that these markets, together with the capitalists who are investing in them, are now “the most powerful force on earth.”388
The principles of neoliberalism have both ideological and concrete aspects. First is the formal ideology of neoliberalism which promotes the theory of the small weak state with low taxes and weak regulations as a means to destroy Keynesian social welfare liberalism and free capital from any restraint. In actual concrete practice however, government must operate at the service of the financialized transnational capitalist class, assisting its efforts to accumulate capital. This means that neoliberalism promotes the big, powerful, coercive activist state for the capitalist ruling class and the small weak state for everyone else. More specifically, in the arena of capital accumulation, neoliberalism means a “good business climate”: large police and military forces, including repression and prisons in order to protect private property and expand the free movement of capital and the global circuits of capital accumulation, as well as controlling or even conquering nations with natural resources and/or an inexpensive, exploitable labor supply. Capitalists want help from the state, including bailouts by the trillions of dollars, when economic crisis inevitably develops. They want the state to expand the domestic investment market through the commodification, financialization, and privatization of everything possible, including people and ecologies, converting once public assets and spaces like public education into their private realm, infusing market logic everywhere and embedding it in capitalist social relations.
The capitalists want government contracts and subsidies. They want export promotion activities, such as taxpayer-supported foreign aid tied to purchases of U.S. products. Freed from regulation, finance and speculation—hedge funds, futures, options, derivatives, swaps, computer-generated trades, and so on—take over. Capital, freed from nation-state restrictions, roams the globe looking for the easiest profits; vast fortunes are rapidly acquired by insiders with connections, including private equity corporations, hedge fund operators, and other speculators. All are aspects of a monopolistic system, far from the ideology of “free markets.” As we saw during the financial crisis of 2007–2008, when capitalists needed massive bailouts from the state and taxpayers, capitalist-class interest came to the fore, trillions of dollars suddenly became available, and neoliberal ideology was rapidly dumped.
At the same time, the financialized U.S. and transnational capitalist class wants neoliberalism to mean the destruction of the Keynesian/New Deal welfare state and the substitution of the small and weak state for the vast majority: the workers. Unions and safe working conditions are undermined or destroyed; health and safety laws gutted; wages, Medicare, Social Security, pensions, as well as ecological protections, come under attack and are reduced or eliminated. The diminished capacity of the smaller states in Africa and the Third World has proved to be dangerous to humanity, because viruses like Ebola are more apt to get out of control when the health sector is cut back or privatized in order to increase the avenues of profitability for private corporations in this sector.
Under the regime of neoliberal geopolitics, unemployment and underemployment have increased to near depression levels, with no serious countervailing government programs, since the government supposedly lacks resources. Austerity is the program for the working class, along with sharp competition between working classes in different countries, resulting in static or falling wages, though there is always plenty for the capitalist class. One predictable outcome has been a massive increase in inequality with much higher levels of wealth and income concentration at the top, together with severe deprivation for the poorest nations and peoples. The capitalist press is filled with examples of this vast increase in inequality. To cite just one, the Financial Times reported in 2014 that 110 Russian billionaires now control 35 percent of Russia’s total wealth.389 In the United States, the richest nation in the world, this meant a return to 1920s levels of disparity by the early 2000s.390 The top 1 percent of U.S. families now average about $1 million income a year, while the bottom 90 percent average $29,840. The top 10 percent of wealth holders in the United States own 73 percent of the nation’s wealth, while the bottom 60 percent own less than 5 percent.391
Viewed on a global scale, the situation is even more unequal. There are 29.6 million financial millionaires in the world, one half of 1 percent of the world’s people. Assets of over $100 million are held by only 29,000 ultra-high-wealth individuals, the largest number by far living in the United States, which controls almost 30 percent of the world’s total wealth and where over 40 percent of the world’s millionaires live.392 The richest 2 percent of the world’s people hold 50 percent of the planet’s wealth, and the top 10 percent own 85 percent. Wealthy people living in North America, Europe, and the richer part of Asia, amounting to only a small part of the globe’s population, control 88 percent of the world’s wealth.393 The eighty-five richest individuals on the planet own the same amount of wealth as the 3.5 billion poorest people.394 These billions of poor people live and die in dire poverty, with little or no chance to live a healthy life or fully develop their human abilities, a massively immoral crime. Statistics from the Credit Suisse bank show that the bottom 68 percent of the world’s adults hold only 4.2 percent of the world’s wealth.395 The main achievement of neoliberalism worldwide has been to redistribute wealth upward, not generate new wealth.396 One proof of this is a statistic from the United States: fully 95 percent of total income growth during the 2009–12 years has gone to the top 1 percent.397
In the United States both mainstream parties, the Republicans and the Democrats, are heavily influenced by elements of the financialized U.S. capitalist class and are neoliberal parties at their core. The Republican leadership is made up of hardcore neoliberals who are fixated on speeding up capital accumulation and believe that the source of all problems is government failure and the supposed excesses of Keynesian style liberalism. To them, excessive taxation, mistaken government intervention in the housing market, in the health care industry, in management of the money supply, and the promotion of social welfare are the key problems. At the same time, inequality, racism, sexism, unemployment, and poverty, the existence of a giant and very expensive military, a repressive prison system, the denial of rights to many people, and corporate welfare at taxpayer expense are not seen as issues.
The Democratic leadership consists of soft-core neoliberals. They argue that the main problem is that the neoliberal deregulation of the banks, which they themselves implemented in 1999 with the repeal of the Glass-Steagall Act, went too far, as did allowing housing loans to those who could not afford them. Mild adjustments in regulations are thus needed. Otherwise, despite some rhetorical flourishes to satisfy their base of rank-and-file supporters and some concern about the need to legitimate the system, policies of the Democratic leadership are also neoliberal. There are many examples. Democrats support NAFTA, the Trans-Pacific Partnership and other pro-corporate trade policies; they agreed to deregulation, then imposed only weak reregulations for much of the financial sector; they repealed welfare policies while refusing to sponsor a government-run full employment program when unemployment and underemployment have been at crisis levels. Democrats have also compromised with Republicans on their attempts to cut Social Security and Medicare; they have not even attempted to try to pass the Employee Free Choice Act to help unions organize workers who want to be in unions; they have maintained a privately controlled health care system instead of socialized medicine or a single-payer system; they have continued welfare programs for corporate agriculture and other wealthy vested interests; they have spent vast sums on militarism and war; and they have voted for trillions of dollars of bailout money for Wall Street.
CFR leaders and members have had a central role in the development of globalized neoliberal ideology and practice since its origins in the early 1970s. Because neoliberalism is detrimental to the needs and interests of the overwhelming majority of the earth’s people, it has to be imposed by force after a societal shock like a civil war or economic crisis, or imposed more gradually through secrecy, lies, deception, and trickery.398 Neoliberalism has been a worldwide phenomenon and there have been many national roads to it, but the fountainhead of its ideology and practice has been in the United States, and the CFR and its network have played key roles in its origins and expansion.
Augusto Pinochet’s dictatorship in Chile was the first large-scale implementation of neoliberalism. In September of 1973, Salvador Allende’s democratically elected government was overthrown, followed by a one-sided civil war against the left, with estimates of over 3,000 activists known to have been murdered, over 30,000 tortured, over 80,000 arrested, and millions of people terrorized. Varied people’s movements were destroyed and a path opened to unopposed privatization, union destruction, cuts in social spending, deregulation, and so-called free markets.
The U.S. government had sought and organized such a coup since September 15, 1970, when President Richard M. Nixon, a former member of the CFR, ordered CIA director and Council member Richard Helms to foster a government overthrow in Chile. Nixon characteristically ranted: “That son of a bitch Allende. We’re going to smash him.”399 National Security Adviser Henry A. Kissinger and his assistant Alexander Haig, both CFR members, discussed promoting a coup on October 15, 1970. The next day the CIA station chief in Santiago, Chile, received Kissinger’s orders via CIA headquarters: “It is firm and continuing policy that Allende be overthrown by a coup. . . . It is imperative that these actions be implemented clandestinely and securely so that the USG [U.S. Government] and American hand be well hidden. . . . This imposes upon us a high degree of selectivity in making military contacts.”400 The U.S. ambassador to Chile at the time was CFR member Edward M. Korry. Illustrative of the hostility with which the CFR community and broader U.S. capitalist class viewed Allende’s free election as president of Chile is what Korry said when he heard the Allende had won: “Not a nut or bolt shall reach Chile under Allende. Once Allende comes to power we shall do all within our power to condemn Chile and all Chileans to utmost deprivation and poverty.”401
Those pushing the U.S. government to sponsor a coup against Allende were other members of the CFR community such as Council member Harold S. Geneen, the president of International Telephone and Telegraph Company, which had investments in Chile.402 After the bloody overthrow and destruction of Chilean democracy, Foreign Affairs ran an article by a Princeton professor who naively argued that those who suspected that the U.S. government had a role in the coup were wrong, since a U.S. Senate subcommittee had investigated and “concluded that there is no evidence of any U.S. role whatever.”403
Once in power and his violent system of terror was in place, dictator Pinochet brought in a group of Chilean economists who had studied with Milton Friedman at the Rockefeller-founded and funded University of Chicago. Called “the Chicago Boys,” they implemented a full neoliberal program in Chile, including privatizing many sectors of the economy and society, including public utilities, health care, parts of the education system, and pensions; dramatically cut government social services; and opened the nation to “free trade.” The oppressed Chilean people had absolutely no say in the matter. The results of the program were very harmful to workers; unemployment reached 33 percent in 1982 and by 1988 almost half of Chileans were living in poverty, while the income of the richest 10 percent had increased by 83 percent. Under Pinochet and neoliberalism, Chile had become one of the most unequal nations in the world.404 The Chilean people eventually rebelled and at great sacrifice overthrew the military dictatorship, resulting in a serious modification of neoliberal policies but far short of an egalitarian, just society run by and for the working class and peasant majority.
During the mid-1970s, as Pinochet was implementing neoliberalism in Chile, the Council was conducting its “1980s Project.” One of the largest CFR projects ever, the multiyear project was started in 1974 and by late 1975 it was in full swing having received major funding from the Ford, Rockefeller, and Mellon Foundations, the German Marshall Fund, and the Lilly Endowment.405 Council member and project director Richard H. Ullman described the size and scope of this planning effort as follows in the 1976 CFR Annual Report:
During the period November 1975–June 1976, the 1980s Project sponsored 38 full-day meetings of ten issue-related working groups and of the central Project Coordinating Group; 318 persons, half of them members of the Council, took part in the discussions. Eighty papers—each specially commissioned to address terms of reference worked out by the Project staff—formed the background to the discussions. Many of these papers, and others not yet completed, will appear next year in a series of thirty or so books to be published for the Project by the McGraw-Hill Book Company.406
The substance of the 1980s Project was also impressive, a serious effort at integrated forethought with a transnational emphasis. As Ullman and 1980s Project staff member Edward L. Morse (also a CFR member) related in 1978:
The 1980s Project had its origins in the widely held recognition that many of the assumptions, policies, and institutions that have characterized international relations during the past 30 years are inadequate to the demands of today and the foreseeable demands of the period between now and 1990 or so. Over the course of the next decade, substantial adaptation of institutions and behavior will be needed to respond to the changed circumstances of the 1980s and beyond. The Project seeks to identify those future conditions and the kinds of adaptation they might require. It is not the Project’s purpose to arrive at a single or exclusive set of goals. Nor does it focus upon the foreign policy or national interests of the United States alone. Instead, it seeks to identify goals that are compatible with the perceived interests of most states, despite differences in ideology and in level of economic development.
The published products of the Project are aimed at a broad readership, including policy makers and potential policy makers and those who would influence the policy-making process, but are confined to no single nation or region. The authors of Project studies were therefore asked to remain mindful of interests broader than those of any one society.407
Some of the CFR studies conducted during this effort represented an initial embrace of neoliberalism. One that was especially relevant to the developing neoliberal perspectives was the 1978 Rich and Poor Nations in the World Economy, a CFR book published by the Council and McGraw-Hill. The lead author was Council member Albert Fishlow, who summed up his perspective on the future of the economic world system as follows: “In short, a truly interdependent new order must rely on symmetrically freer market forces, not on immediate national advantage.” The “highest priority” in this global market system would be “freer trade,” in order to “engage all nations within a freer market.” Fishlow also advocated larger private financial flows, loans, and investment to poorer nations, stating that the “expansion of private-sector activity is consistent with the greater scope for market influence that has been advocated.”408 Building on the importance of private foreign investment, Fishlow links it to the spread of technology, and that in turn to monopoly power:
The private sector of the developed countries has been the most prominent means of transferring technical knowledge and managerial capacity and diffusing modern industry. That know-how has been disseminated throughout the world in unprecedented fashion through the workings of the market. . . . Monopoly power is the rule rather than the exception for foreign enterprises. It is the rare firm that invests abroad without some control in that market. . . . Few firms possess absolute market power, however. There are other transnationals with similar products and skills, competitors that are increasingly of different nationalities.409
One 1980s Project publication advocated for a new international organization to promote neoliberal capitalist-oriented world production and trade, suggesting, at an early date, what became the World Trade Organization a decade and a half later. Miriam Camps, the primary author of a 1980s Project book, Collective Management: The Reform of Global Economic Organizations, called the proposed new organization a “Production and Trade Organization,” but its purpose was the same as what later became the WTO.410
While the policy ideas of the 1980s Project, including neoliberal “free market” perspectives, were circulating among top officials and intellectuals globally and as the world’s first fully neoliberal experiment was being forcibly imposed on the Chilean people, five free marketers, all directors or former directors of the CFR—Walter B. Wriston, Alan Greenspan, Paul A. Volcker, Martin S. Feldstein, and Robert Rubin—were reaching the top levels of economic policymaking in the United States.411 Collectively this group, representative of the Council’s worldview, successfully launched the first great wave of neoliberalism in the United States, using the power of the state to implement, step by step, the capitalist goal of unrestricted freedom for corporations and capital at the expense of popular forces. This amounted to brutal class struggle from above, targeted at ordinary people, aiming at the cutback and elimination of government services and workers’ rights leading toward austerity and the destruction of a social safety net built up in the United States over previous decades. These five men were key players in the implementation of neoliberal corporate globalization at home, a process that closely aligned the U.S. social formation with the ongoing expansion and reproduction of global transnational capitalism. A brief review of their careers and actions as power wielders helps deepen an understanding of how neoliberalism developed at home and abroad.
In 1967 Walter B. Wriston became the head of what was then called First National City Bank of New York, today’s Citigroup. His father Henry, president of Brown University, had been a longtime (twenty-four years) director of the CFR and president of the Council for thirteen years in the 1950s and 1960s. Walter was also a director of the CFR from 1981 to 1987.412 During this same period he was widely regarded as the most influential commercial banker of the time. Walter B. Wriston’s driving passion was undoing the federal regulations of the financial industry that had been established during the Great Depression to protect the nation against financial speculation and market crashes. He wanted to make First National City a one-stop financial center for consumers and investor/speculators with everything under its wings: savings accounts, mortgages, credit cards, mutual funds, insurance, and brokerage. This required a loosening of federal regulations, multiplying the risks of financial collapse, which, of course, came in due time.413 In his role as a leading banker, and as chairman of Reagan’s Economic Policy Advisory Board from 1982 to 1989, Wriston put constant pressure on the Federal Reserve and policy makers to loosen regulations and allow for free markets, competition, free lending and borrowing, and speculation. He even published books to try to influence the public debate. One, Risk and Other Four-Letter Words, was a rant against “bigger government and more regulation, which inevitably lead to the loss of individual liberty.”414
In 1974 Alan Greenspan, a longtime close friend and follower of laissez-faire libertarian Ayn Rand, was sworn in as the head of President Gerald Ford’s Council of Economic Advisers. Greenspan had Rand standing next to him with Ford when he took the oath of office. Much earlier, Greenspan recounted, he had “decided to engage in efforts to advance free-market capitalism as an insider.”415 A member of the CFR, Greenspan counted among his New York friends CFR leaders David Rockefeller, Henry Kissinger, and Felix Rohatyn.416 President Ford faced “stagflation,” a combination of unemployment and inflation characteristic of late capitalism in many nations, and under Greenspan’s tutelage decided to attack the problem with a program of tax cuts and deregulation. One expert on the Ford administration later stated: “In time, Greenspan would have more influence on Ford than any other economic adviser,” pointing out that “deregulation came naturally to Ford, and his deregulatory inclinations were reinforced by his economic advisers, most prominently Alan Greenspan.”417 Greenspan later called Ford’s deregulatory program the administration’s “great unsung achievement.” The Ford administration was a short-lived one, however, and Greenspan was soon temporarily out of power. But the Carter administration continued and got credit for the “deregulation initiative that had begun under Jerry Ford.”418 David Rockefeller had also called for a cut in the “excessive government regulation” of business in 1978, and Carter obliged. Carter also cut business taxes, something called for by his treasury secretary, former CFR director W. Michael Blumenthal.419
Business Week warned in the spring of 1978 that inflation was a threat to the “basic structure of American society.”420 Carter recognized it as a serious problem, searched for a cure, and came up with both the right man and ideas for the cure in the person of Paul A. Volcker. Volcker had been educated at Princeton, where the Austrian free market school of economics (Friedrich von Hayek et al.) was dominant, and this was important to the development of his economic theories. He joined the Chase Manhattan Bank in 1957 and soon was a special assistant to David Rockefeller. A few years later Volcker was brought into government, serving in the Treasury Department during the early Kennedy-Johnson years, returning to Chase in 1965 to again work as an aide to Rockefeller. Nixon brought him back into Treasury as its number three man in 1969.421 Out of the Treasury again and back at Chase and also a director of the CFR in 1979, Volcker’s name came up as a possible appointment to head the Federal Reserve. Carter, as Greenspan put it, “didn’t even know who Volcker was.” But Wall Street bankers and CFR directors David Rockefeller and Robert Roosa urged Carter to appoint Volcker “as the necessary choice to reassure the financial world.”422 In short, Volcker was the “candidate of Wall Street.”423 At the behest of Wall Street, Volcker took over as the “world’s most powerful economic policy maker” during the summer of 1979.424
Once in office as the head of the Federal Reserve, Volcker followed the University of Chicago’s neoliberal monetarist program, destroying inflation through restricting the money supply, driving up interest rates to 20 percent, which resulted in a recession with increased business failures and high unemployment. It is generally believed that Volcker’s anti-inflation program lost Carter the election and helped open the way for the neoliberal deregulation policies that followed.425
President Ronald Reagan retained Volcker, and his tight money policy was continued, with unemployment reaching nearly 11 percent by late 1982. Volcker supported Reagan’s anti-union policies; he believed that union wage contracts were inflationary, and wanted to break the back of union-inspired wage increases.426
The key background to the monetary policies that both Carter and Reagan followed during the 1979–82 years was the stagnation in the world economy and the fear of a low-growth trap, combined with the danger that high inflation posed to both established wealth and economic growth. A 1980 Foreign Affairs article, “The Continuing World Economic Crisis,” by two Citibank vice presidents, one of them, Harold van B. Cleveland, a CFR member, discussed the central need to overcome stagnation and balance of payments problems through a neoliberal program of controlling inflation, together with “market discipline.”427
Reagan’s chief economic adviser during his first term was CFR member and later a Council director, Martin S. Feldstein. Feldstein had been president and CEO of the National Bureau of Economic Research, a private nonprofit organization. He became the head of the Council of Economic Advisers in 1982 and was said to be a chief architect of Reagan’s neoliberal economic policies. Feldstein and Reagan saw four key areas where reductions were called for: rate of inflation, tax rates, size of government, and regulations of the private sector. Volcker’s policies had inflation on the run. According to Feldstein, top income tax rates were cut from 70 percent in 1980 to 28 percent in 1986, the country’s non-defense discretionary spending cut by one-third from 1980 to 1988, and regulations were reduced in a wide range of industries, including air transport and in the financial sector.
Connected to this deregulation and the creation of a more flexible workforce with fewer rights for workers was Reagan’s destruction of the Professional Air Traffic Controllers Organization (PATCO) in 1981, one of the key events in late twentieth-century U.S. labor history. This union had gone on strike for better pay, working conditions, and fewer working hours due to the stress involved in their work. Invoking the 1948 Taft-Hartley Act, Reagan ordered the union’s members back to work. When 11,345 stood firm, refusing to return without achieving at least some of their goals, Reagan fired and blacklisted them all. While still Federal Reserve Chair, Alan Greenspan later pointed out that Reagan’s action “gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers.”428 Indeed, Reagan’s action encouraged private employers to take a hard line against unions and workers and, given the lack of fighting spirit among the leadership of many U.S. unions, the result has been a weakening of worker power and serious long-term decline of union membership. In congressional testimony in early 1997, Greenspan reinforced this hard line while discussing Federal Reserve Board inflation goals in the context of workers’ increasing fears of layoffs. Greenspan approvingly observed that “restraint on compensation increases has been evident for a few years now and appears mainly the consequence of greater worker insecurity.”429 Such “worker insecurity” is a key goal of neoliberalism, as it inhibits worker demands for better pay, benefits, and conditions—demands that could impact the power of capitalists to make super-profits and increase their class power.
By 1985 the Reagan administration had a comprehensive program to renew growth in the world economy, called the Baker Plan, after Secretary of the Treasury James A. Baker III. This was a fully neoliberal plan, calling for “market-oriented policies for growth,” that is, structural adjustment, but it was not successful in gaining widespread agreement. A later plan, called the Brady Plan after CFR member and Secretary of the Treasury Nicholas F. Brady, was successful in developing a measure of international consensus. In typically neoliberal fashion, it linked debt relief to assurances of neoliberal economic “reforms” and trade openness in the less developed, less sovereign debtor nations.
At the same time during the 1980s, the World Bank was implementing structural adjustment policies, tying them to loans to poorer nations. All of the chief economists planning these policies at the World Bank during this era—Hollis B. Chenery, Ann O. Krueger, Stanley Fischer, and Lawrence Summers—were members of the Council on Foreign Relations. Krueger, later second in command at the IMF, was called a “famously neoliberal” thinker by Leo Panitch and Sam Gindin.430
Reagan also appointed Alan Greenspan, then a director of the CFR, to replace Volcker as Fed chief in 1987. Volcker was then brought back onto the Council board he had left in 1979, in effect replacing Greenspan.431 Unlike Volcker, who was a Democrat, Greenspan had been an avid supporter of Reagan during the 1980 presidential campaign. As a free market ideologue, Greenspan was against unions and cheered Margaret Thatcher’s attack on and defeat of the coal miners and other unions in Britain through a big-business government alliance in 1984–85.432 Greenspan was to serve as the chairman of the Federal Reserve for almost two decades, longer than any other head of the Fed. Since Fed chief is the nation’s highest economic office and Greenspan was the most widely admired chairman in Fed history, “he had more influence than any other figure over the direction the nation took during the 1987–2007 years.”433 Naomi Klein argued that while Greenspan headed up the Fed, he was “probably the single most powerful economic policy maker in the world.”434 Greenspan reportedly ran the Fed in a top-down, dictatorial fashion, even ordering his staff to produce studies with the conclusions he wanted.435
In 1989, just after the end of the Reagan years, the term “Washington Consensus” was coined. The term was used to capture the neoliberal interface between the U.S. Treasury Department and the Fed on one hand and the IMF and World Bank on the other. All were promoting neoliberal corporate globalization. In terms of the flow of capital abroad, the results were spectacular, whereas only about $170 billion in U.S. private sector capital moved to the private sector of developing nations in the 1980s, it increased to $1.3 trillion in the 1990s. In their book The Making of Global Capitalism, Leo Panitch and Sam Gindin summed up the new reality as follows: “It was a measure of how far the project for a global capitalism had been realized by 1995 that these private flows now dwarfed the bilateral and multilateral state loans that had provided most of the capital flows to developing countries in earlier decades.”436
Neoliberal policies became further entrenched in the 1990s under Presidents George H. W. Bush and William J. Clinton, both CFR members. Bush began the process of creating the North American Free Trade Act (NAFTA) between Canada, Mexico, and the United States. Carla A. Hills, a Council member and later CFR co-chair, was Bush’s trade representative and chief NAFTA negotiator. NAFTA was ratified during the Clinton administration due to his support and the vote of many Democrats. Robert Rubin, later co-chair of the Council, was a top Clinton economic policy adviser as assistant to the president for economic policy and strongly supported NAFTA.
Largely created by CFR members and leaders, NAFTA helped establish the template for the rules of the emerging global economy, a kind of socialism for the corporations and global competition for labor, a world where important state-enforced benefits would flow to capital at the expense of workers. Part of this was that NAFTA granted corporations extraordinary protections against national laws that might threaten their profits, and set up special courts, staffed by pro-corporate experts, to judge corporate suits against all levels of government. NAFTA also strengthened the ability of U.S. employers to force unions and their workers to accept lower wages and benefits by threatening to move their operations to Mexico. Besides undermining labor’s bargaining power, NAFTA impacted U.S. environmental regulations, limiting government’s ability to stop pollution, since this might limit profits. NAFTA was thus a key step in the global “race to the bottom.” This term refers to the fact that the neoliberal world order creates “free market” competitive relationships between companies and countries resulting in cuts in wages, benefits, and conditions for workers in order to attract investment into a corporation or nation. This creates a negative downward economic cycle globally for the people and communities affected. NAFTA was also used to further lock in Mexico as a neoliberal nation, which had, according to a leading Mexico City newspaper, enriched thirteen super-wealthy families while impoverishing about 80 million Mexicans.437
Neoliberal corporate globalization, with its massive level of trade and largely unregulated free flows of capital, proved difficult to control. Marx and Engels, writing in the Communist Manifesto, were prescient about “modern bourgeois society” when they said that it “has conjured up such gigantic means of production and of exchange, [and] is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.”438 The crises tended to come in the nations like Mexico that were models of capital mobility and free trade. Extraordinary efforts were needed to contain these crises. When the Mexican government was threatened with default in 1995, President Clinton’s new secretary of the treasury, Robert E. Rubin, and his team immediately put together a rescue plan worth $40 billion, an unprecedented amount. The goal was to fully reassure transnational capitalists and their markets that there would be no default ever. The result furthered neoliberal corporate globalization by assuring capitalists that they would be bailed out no matter what risky speculative bets they made. Meanwhile, flows of private capital to emerging markets continued to accelerate.439
During Rubin’s and his protégé Lawrence Summers’ tenures as secretary of the treasury, the further institutionalization of the neoliberal variant of capitalism took place. The World Trade Organization (WTO) was created in 1995 to further eliminate barriers to world trade. With Council member Timothy F. Geithner as U.S. negotiator, in 1997, over 150 nations in the new WTO acquiesced to a financial services agreement that applied “free trade” rules, formerly applicable to goods in international commerce, to the operations of banks, securities, and insurance companies, while reducing regulations, thus greatly stimulating their expansion abroad. With full assistance from the financial community, in 1999–2000 Rubin and Summers also steered through Congress the Financial Services Modernization Act, removing regulatory barriers and allowing the consolidation of commercial banks, investment banks, insurance firms, and securities companies. This repealed parts of the Glass-Steagall Act of 1933 and opened the way for both increased financial speculation and the growth of “too big to fail” financial institutions. The size of financial conglomerates was no longer limited by the federal government.
One final act of the Clinton administration was the Commodity Futures Modernization Act, signed by the president in December 2000, just before he left office. This law deregulated financial products known as over-the-counter derivatives. Such derivatives, especially credit default swaps, would later be a central factor in the financial crisis of 2008. The President’s Working Group on Financial Markets, established by Clinton in 1999, made the recommendation to deregulate. Three of its four members were longtime CFR members: Treasury Secretary Lawrence Summers; Fed chair Alan Greenspan; and Securities and Exchange chair Arthur S. Levitt. The fourth was the existing regulator, William J. Rainer of the Commodity Futures Trading Commission. Meanwhile, Clinton’s gift to the working class was austerity. In 1995 he signed the Republican-passed law that “reformed” welfare at a time when there was a chronic lack of jobs paying decent wages, driving many people deeper into poverty.
Under the presidency of George W. Bush, Greenspan “stepped far from the traditional duties of a Federal Reserve chairman” by endorsing Bush’s neoliberal income tax cut proposal of $1.6 trillion over ten years. After that “nearly 90 percent of the benefits of the Bush tax cut went to the top 5 percent of earners in the nation.”440 This piece of capitalist policy increased the inequality characteristic of the era. Greenspan also encouraged various types of unregulated securities trading, speculative binges that were enabled by treasury secretaries Rubin and Summers during the Clinton years.441 One result was the 2008 financial crisis, yet the same techniques, such as tax cuts and an increase in liquidity, were used to pump up a new economic “recovery.”
The policies of neoliberalism, carried out for a number of decades, have increased the already substantial disparities in worldwide wealth and power. Helpful in illustrating this is the Global Wealth Data Book, produced in recent years by the Credit Research Institute of the Switzerland-based transnational bank Credit Suisse. One of the most striking findings in this 2010 study is that adults in the nations of the three allied developed capitalist “trilateral” regions of the world—North America, Europe, Japan—owned and controlled almost 75 percent of the world’s wealth, with the United States controlling more wealth by far (28.6 percent), than any other single nation. Overall, adults in Europe had 31.8 percent, North America 31.1 percent, and Japan 10.8 percent of global wealth. By contrast, China controlled only 8.5 percent, Australia 2.6 percent, and India 1.8 percent of the world’s wealth. In 2010, 49 percent of the world’s billionaires lived in North America (mainly in the United States), and another 23 percent resided in Europe. At the millionaire level, 40.5 percent of the world’s millionaires lived in the United States, and another 9.7 percent resided in Japan. Another 28.2 percent lived in four European nations (France, Italy, the United Kingdom, Germany) and Canada. Thus, as of 2010, 78.4 percent of all the world’s millionaires resided in only seven nations, which collectively make up only about 10.7 percent of global population. Credit Suisse also presents a “global wealth pyramid,” illustrating that the top 0.5 percent of the world’s wealth holders held 35.6 percent of global wealth, and the top 8 percent held fully 79.3 percent. Conversely, the bottom 68.4 percent of the world’s adults, basically a majority of the world’s working people, held only 4.2 percent. The middle group, mainly professionals, who were 23.6 percent of the adult population, held 16.5 percent of the wealth.442
Statistics on U.S. foreign direct investment add to the picture of where the world’s wealth is held and invested and possible implications for foreign policy. In terms of outward flows of direct investment capital, cumulative U.S. investments abroad are in Europe (55.6 percent), the Caribbean and Latin America (19.5 percent), Asia/Pacific (14.6 percent), and Canada (7.9 percent). In terms of inward flows, cumulative foreign direct investments into the United States have come from Europe (70.8 percent), Asia/Pacific (mainly Japan) (16.1 percent), and Canada (8.5 percent).443 These central facts help set the context for the geoeconomics and geopolitics of the CFR, its leaders and members.
The importance of property and wealth as reflected in the statistics above is never far from the minds of the capitalists and their intellectual helpers at the Council. Therefore the study of geoeconomics—the relationship of geography and economic power—as well as how this relates to political power has long been a major CFR interest, helping to frame policymaking. On February 15, 2002, Vice President Richard B. Cheney was the featured speaker at the launch of the Council’s new Maurice R. Greenberg Center for Geoeconomic Studies, the expressed goal of which is to train the next generation of foreign policy leaders in modern geoeconomics—the interrelationships among neoliberal economics, globalization, and foreign policy. CFR chair Peter G. Peterson introduced Cheney as a man who has been practicing geoeconomics for “many years,” a man of
great good sense, honesty and success . . . among his career high points was his service as Director on the Board of the Council on Foreign Relations—on two separate occasions. Those of us who worked with him on the Board and in all his other capacities know how lucky our nation is to have him where he is. Indeed, I, and many others, sleep better knowing he is there.444
The CFR has, for over three decades, made neoliberal geoeconomics a hallmark of its ideological orientation and worldview. This thinking is combined with a realist and idealist geopolitical theory based on military strength and the balance of power in world politics. Geopolitics focuses on the security of the nation-state and the imperial grand strategies required to achieve world power. The long-term geopolitical goals of the CFR and the larger U.S. power structure since 1941 have aimed at global military hegemony. Geopolitics, also called “power politics,” therefore goes hand in hand with geoeconomics and the spread of neoliberalism on a world scale—all usually discussed in ruling-class circles under the headings of “multilateralism,” “globalization,” and “internationalism.” A key part of geopolitics is locating and evaluating natural and economic resources and their relation to sea power and land power. In this way key spaces on the earth’s surface can be identified along with the existing balance of forces at any given moment, leading to potential actions: military buildups and wars of conquest, attempts to shape the world power environment through alliances and offshore balancing, as well as diplomatic engagement. Geopolitical analysis thus tends to be nationalistic and era-specific and changes with shifts in the relative power and ambitions of the world’s key nation-states.
Two basic geopolitical eras are considered here: the Cold War era (1976–90) and the post–Cold War era (1991–2013). A key CFR geopolitical thinker throughout both eras has been Zbigniew Brzezinski, a Council member for at least forty years, often a participant in Council study groups, a CFR director from 1972 to 1977, and a frequent writer for Foreign Affairs.445 He has had a close relationship with David Rockefeller, and was a co-founder, with Rockefeller, of the Trilateral Commission (1973). He has also long been a counselor with the Center for Strategic and International Studies at Georgetown University. His views often reflect the consensus perspective of those in power due to his close relationships to the CFR and other ruling-class organizations.
Brzezinski was born in Warsaw of Polish nobility, escaping the fate of much of this old ruling class by the luck of living in Canada with his diplomat father during much of the Second World War. He became a cold warrior specializing in Eastern Europe and the USSR, teaching at Columbia and Johns Hopkins universities. As a Democrat but a hawk on Soviet-U.S. relations, his governmental positions have been in Democratic administrations, most prominently as Carter’s national security adviser (1977–81), where he famously clashed with the secretary of state, the less hawkish Cyrus Vance, but also as a Department of State policy planner during the Vietnam War, which he fully supported. On the other hand, he was strongly critical of Bush II’s invasion and occupation of Iraq. He has written extensively on geopolitics. Game Plan: A Geostrategic Framework for the Conduct of the U.S.-Soviet Contest (1986) and The Grand Chessboard: American Primacy and Its Geostrategic Imperatives (1997) are his two most important works in this field, and will be focused on here.446
During the 1976–90 period, a central concern of the Council and the larger U.S. ruling class was winning the U.S.-Soviet contest for hegemony over Eurasia. Brzezinski’s Game Plan developed out of this concern and laid a framework for U.S. imperial grand strategy. Its focus was “the geopolitical struggle for the domination of Eurasia, but it also examines its peripheral and diversionary aspects as well as the rivalry on the oceans and outer space that is an extension of the struggle for earth control”447 The area that Brzezinski defined as Eurasia ran from Britain and Spain in the west to the Soviet Far East, China, and Southeast Asia in the east. This Eurasia region included, in the mid-1980s, over 70 percent of the world’s population, 60 percent of the globe’s GDP, and nearly 40 percent of the land area.448 People in this area held the overwhelming bulk of the world’s wealth outside of North America. Eurasia was seen as the geopolitical prize, the central priority of the U.S.-Soviet contest, which Brzeziniski himself called a clash of rival imperialisms. Brzezinski described the struggle and possible outcomes as follows:
For the United States, the prevention of Soviet domination over Eurasia is the precondition of achieving an acceptable outcome to the contest. For the Soviet Union, expelling America from Eurasia through a political or a military breakthrough on the three central strategic fronts remains the precondition of decisive success in the historical conflict. The struggle on the three central fronts principally involves a political competition buttressed by military power.449
The three fronts referred to by Brzezinski were the far western, involving an industrialized Western Europe controlling the key outlets to the Atlantic Ocean; the far eastern, Japan, the Koreas, China, and Southeast Asia controlling the main outlets to the Pacific Ocean; and southwestern, the greater Middle East with its energy resources.450 The immediate conflict between rival imperialisms over control of Eurasia grew out of the conflict over Western Europe at the end of the Second World War in 1945, but it had deep historic roots echoing the ideas of historic geopolitical thinkers like Ratzel, Mackinder, Haushofer, Mahan, Spykman, and others:
The struggle between Russia and America was joined when it became clear that the United States would not disengage from Europe and that it was prepared to oppose any demands Moscow made in excess of what the Soviet Union effectively controlled by 1945. This opposition was a historical milestone. In effect, it represented the beginning of the latest phase in the age-old struggle for the domination of the world’s most active continent—a struggle that had raged from the time of the collapse of the Mediterranean-centered Roman Empire, through successive attempts to organize a Holy Roman Empire encompassing all of Europe, to protracted conflicts between oceanic empires, like Great Britain, and predominantly land-based powers, like Napoleonic France, Nazi Germany, and Russia. Now this struggle put the two successful survivors of the Second World War—the dominant transoceanic power and the dominant power on the central landmass—on a collision course.451
Besides Western Europe, the collision manifested itself in the Far East, a key area, argues Brzezinski, because it is the “world’s fastest-growing economic region,” adding that it is central for a stable U.S.-controlled “trilateral” world system:
The trilateral relationship between the states of the Pacific Basin in the Far East, North America, and Western Europe has emerged as the basis for a new non-Eurocentric international system sponsored by the United States. Cooperation among these three economically vital and politically democratic regions has become central to the maintenance of international stability and to the development of the third world. Anything that would unhinge either the far eastern or far western connection from the United States—particularly a Soviet political or military breakout—would contribute directly to the destabilization of these largely American-sponsored international arrangements.452
The “third front” was the Middle East, where the United States had long been interested in controlling and profiting from the area’s immense oil deposits. The conflict of the 1970s in Afghanistan, and the Soviet involvement there, intensified the importance of this front as an area of active great-power conflict and led to the Carter Doctrine of January 23, 1980, promulgated while Brzezinski was National Security Adviser: “Any attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America and such an assault will be repelled by any means necessary, including military force.” The United States became more actively involved, due to the key role of oil in the world economy and the danger that the Soviet move into Afghanistan could lead to Soviet dominance of the larger Middle East region, threatening to “unhinge the international system.” In Brzezinski’s words:
With 56 percent of the world’s proven oil reserves, the Persian Gulf states . . . continue to be a vital strategic interest of the West. Given Western Europe’s and Japan’s dependence on Middle Eastern oil, domination over this region would place the Soviet Union in a position to blackmail both Western Europe and the Far East into political accommodation on terms favorable to Moscow.453
For Brzezinski, the final result of the political, military, and economic struggles for control of each of these three strategic fronts depended on which side gained or retained power over the “linchpin states” in each region:
These linchpin states are Poland and Germany on the far western front; South Korea and the Philippines on the far eastern front; and either Iran or the combination of Afghanistan and Pakistan on the southwestern front. Soviet domination over Poland is central to Moscow’s control over Eastern Europe, and the subordination or seduction of West Germany would tip the balance in Europe in Russia’s favor. Soviet domination over South Korea and the Philippines would encircle China, directly threaten Japan’s security through Korea, and potentially endanger Japan’s main maritime lifeline from the Philippines. Soviet domination over either Iran or both Afghanistan and Pakistan would give Moscow control over access to the Persian Gulf or a presence on the Indian Ocean from which Soviet power could be projected at vulnerable areas to the southwest and southeast.454
This analysis and the actions that developed from it were key parts of the successful U.S. strategy of undermining Soviet control over Eastern Europe and preventing Soviet success in Afghanistan, one cause, among many, leading to the demise of the USSR itself. This led to a corresponding expansion of the U.S. informal empire and a hegemonic influence in Eurasia and much of the rest of the world.
A few years after the fall of the Soviet Union and most of the socialist bloc, Brzezinski updated the analysis he had put forward in Game Plan in the 1997 The Grand Chessboard: American Primacy and its Geostrategic Imperatives. In this book and in an article in Foreign Affairs he repeats his earlier perspective that Eurasia is central.
Eurasia is home to most of the world’s politically assertive and dynamic states. All the historical pretenders to global power originated in Eurasia. The world’s most populous aspirants to regional hegemony, China and India, are in Eurasia, as are all the potential political or economic challengers to American primacy. . . . A country dominant in Eurasia would almost automatically control the Middle East and Africa. With Eurasia now serving as the decisive geopolitical chessboard, it no longer suffices to fashion one policy for Europe and another for Asia. What happens with the distribution of power on the Eurasian landmass will be of decisive importance to America’s global primacy and historical legacy.455
Brzezinski’s strategic conclusion from this analysis was that in the short run the United States should “consolidate and perpetuate the prevailing geopolitical pluralism on the map of Eurasia.” Beyond promoting division among a number of the key Eurasian states, in the middle term the United States should forge “broader strategic relationships with Europe and China” since this will determine Russia’s future role and shape “Eurasia’s central power equation.” In this power configuration, U.S. global geopolitical hegemony would be anchored in Europe and NATO on the western edge of Eurasia, and China on the eastern edge. A strong democratic Europe will lure Russia into cooperation, and a deepening strategic understanding with China would divert this rising power into “constructive regional accommodation.” Japan must be diverted into wider international partnerships as a U.S. ally, but not as America’s principal military partner or offshore ally against China, as this would prevent the needed strategic consensus with China. Brzezinski’s long-term vision involved developing a trans-Eurasian security system, beginning with an expanded NATO linked to cooperative security agreements with Russia, China, and Japan and with India included in a standing committee that encompassed all of these major players. The United States would then play the “decisive role as Eurasia’s arbitrator.”456
Brzezinski’s geopolitical perspective continues to provide the CFR’s model for political grand strategy: U.S. hegemony over key world regions, especially on the borders of great-power rivals like the former Soviet Union (now Russia) and today’s China. A series of other Council thinkers have focused on providing tactical ideas about how to promote and manage the informal U.S. empire. One of these is a more aggressive posture toward smaller nations around the world. In fact, the CFR and top U.S. leaders generally view these weaker nations through an imperialist lens; they are places and peoples that can be conquered, bullied, controlled, and exploited. A prime promoter of this tactical policy approach today is the Council’s Jeane J. Kirkpatrick Senior Fellow for National Security Studies, the neoconservative Republican Max Boot. Boot, who also writes columns for the Wall Street Journal and Los Angeles Times, has been a CFR member since 2000 and a senior fellow at the Council since 2003.457 Boot’s most important work, The Savage Wars of Peace: Small Wars and the Rise of American Power, was published in 2002 when he was already a CFR member, but just before he was first listed in Council Annual Reports as a Senior Fellow.458 In his book, Boot acknowledges and thanks by name a number of Council leaders and members, including president Leslie H. Gelb, former Director of Studies Nickolas X. Rizopoulos, and Managing Editor of Foreign Affairs Gideon Rose for their assistance, indicating the important input leading CFR people had in the creation of this work, and how it can be seen as reflecting the dominant perspective of the Council itself.459
In Savage Wars of Peace, Boot characterizes the “small wars” he studies as “adventures abroad” that “might well be called imperial wars . . . of the American empire.” For Boot, as for Brzezinski, this empire includes an “inner core” of North America, Western Europe, and Northeast Asia. But outside this core the empire is in turmoil: “Violence and unrest lap at the periphery—in Africa, the Middle East, Central Asia, the Balkans, and other regions teeming with failed states, criminal states or simply the state of nature.” The use of the terms “adventures” and “teeming with failed states” betrays the cavalier attitude Boot brings to his study of the destruction—human, property, and ecological—imposed upon smaller, less powerful nations and their peoples by the imperialist wars of the United States. These wars and related attacks by drones and Special Operations Forces make up some of the tactics used to impose neoliberalism on these small nations. Boot argues that if the “interests of the United States” are “placed in jeopardy” in these areas the civil government in control might have to be replaced through violent U.S. intervention. This can be done, according to Boot, because “the cost of intervention in small states has always been low. Economists call it a yield curve: when the cost is low, demand is high.” In this regard, Boot approvingly quotes Thomas Friedman, another CFR member, who also advocates violence to protect perceived U.S. interests in small states: “The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designers of the U.S. Air Force F15.”460
In the final chapter, “In Defense of Pax Americana: Small Wars in the 21st Century,” Boot argues that the United States should be the world’s “benevolent hegemon” to prevent “chaos or worse” internationally. Part of his argument is what he calls the “price of nonintervention,” citing as examples what he considers the premature withdrawals of U.S. troops from Nicaragua in 1925 and from Russia in 1919, the latter a supposedly missed opportunity, since he believes that “the Whites could have won” the civil war against the Bolsheviks. He mentions the experience of Britain in the nineteenth century as an example that “any nation bent on imperial policing will suffer a few setbacks.” Boot added that Britain wanted “vengeance” after its defeats in Afghanistan (1842) and in the Zulu War (1879), and argues: “If Americans cannot adopt a similarly bloody-minded attitude, then they have no business undertaking imperial policing.” Boot concludes his book with the following call to arms: “America should not be afraid to fight the ‘savage wars of peace’ if necessary to enlarge the ‘empire of liberty.’ It has done it before.”461 George W. Bush and his neocon advisers ordered the invasion and conquest of Iraq less than a year later, a topic discussed in detail in chapter 6.
Neoliberal geoeconomics and the geopolitics of military power are both forms of hard power. They are “hard” because they involve the allocation of scarce resources and employ economic incentives/disincentives and violence/coercion to affect the behavior of others to achieve the larger goals of power and profit. The concept of “soft power” is, on the other hand, a tactic to gain compliance without resorting to force. This concept was developed by Harvard political science Professor Joseph S. Nye Jr. in two books, Bound to Lead: The Changing Nature of American Power (1990) and Soft Power: The Means to Success in World Politics (2004).462 Nye, who comes out of the professional class, has been a member of the CFR for over thirty-five years and also served as a Council director during the 2004–13 years, indicating that he is in the top leadership and his views regarding the usefulness of this tactic are representative of an important sector of the Council.463 In the acknowledgments of his 2004 book, Nye thanks nine different CFR members by name for their “special help” or “valuable assistance” in putting together the book.464
Soft power has to do with attraction, seduction, admiration, moral authority, cooperation, co-optation, setting a positive example, encouraging participation and emulation, having legitimacy, setting agendas, and developing institutions, which all lead to voluntary agreement or at least acquiescence. Soft power is rooted in an attractive culture, as well as positive political values and policies if they are viewed as legitimate and having moral authority. Promoting these aspects of international relationships, Nye asserts, shapes the preferences of others and is more effective in the long run than economic or military coercion, although he believes that these are also necessary at times.465 Furthermore, nations that ignore and act contrary to soft power imperatives soon find themselves feared and hated and on the road to serious negative consequences. Hitler’s Germany during the years 1941–45 is cited as an obvious example. Only interested in hard power, Hitler and Germany found themselves on the wrong side of a large and righteous coalition and soon suffered a massive and horribly costly defeat, with tens of millions of lives lost and major sections of the country destroyed. Nye, while recognizing the necessity of military power, applied lessons of the past to the “dark side” of neoliberal globalization and Bush’s war on terrorism, then being waged, when he wrote in Soft Power:
Americans—and others—face an unprecedented challenge from the dark side of globalization and the privatization of war that has accompanied new technologies. This is properly the focus of our new national security strategy, and is sometimes summarized as a war on terrorism. Like the Cold War, the threats posed by various forms of terrorism will not be resolved quickly, and hard military power will play a vital role. But the U.S. government spends four hundred times more on hard power than on soft power. Like the challenge of the Cold War, this one cannot be met by military power alone. That is why it is so essential that Americans—and others—better understand and apply soft power. Smart power is neither hard nor soft. It is both.466
Nye stresses that the concept of soft power—the ability to get people to voluntarily do what you want them to do—depends upon context and relationships. In today’s world, both of these can rapidly change, leading to serious problems for static thinkers. Nye likens international politics to a three-dimensional chess game, with raw military strength at the top. At this highest level the United States is supreme. The next level down the scale is economic power, and, in this realm, an increasingly transnational multipolar world exists with the United States also on top, but increasingly sharing influence and importance with a number of other players, especially Europe, China, and Japan. At the lowest level of the three dimensions are a number of issues involving both state and non-state actors in which power is widely and chaotically distributed. These include climate change, terrorism, international crime, and the spread of infectious diseases. Nye aimed his argument at the Bush administration, pointing out that the last set of issues
is now intruding into the world of grand strategy. Yet many of our political leaders still focus almost entirely on military assets and classic military solutions—the top board. They mistake the necessary for the sufficient. They are one-dimensional players in a three-dimensional game. In the long term, that is the way to lose, since obtaining favorable outcomes on the bottom transnational board often requires soft power assets.467
Nye stated that due to the perceived lack of legitimacy of Bush’s actions in Iraq the soft power necessary to win a peace after the victory was largely lacking, creating a major problem for the United States and its allies, adding that “attraction can turn to repulsion if we act in an arrogant manner.”468 The Bush administration largely ignored Nye’s views until near the end of its second term. The Obama administration, like Bush, has actively used hard power forms, but has paid more attention to the necessity of at least some soft power rhetoric and actions.
Another example of CFR thinking on the tactics suitable to U.S. grand strategy and its neoliberal geopolitical empire comes from the book by Michael Mandelbaum called The Case for Goliath: How America Acts as the World’s Government in the 21st Century.469 Mandelbaum has been a member of the Council for almost forty years, and a CFR Senior Fellow for at least seventeen of those years (1986–2003).470 He has also been a professor of foreign policy at Johns Hopkins University. He dedicates the book to former Council president Leslie H. Gelb and two other CFR members who served as Carnegie Corporation presidents (he completed the book while on a Carnegie Scholar’s Program). He also thanks in his acknowledgments former CFR director and Johns Hopkins Dean Jessica P. Einhorn for facilitating a leave of absence to finish the work.471 On the book’s back cover four Council members, two of them CFR directors, praise the book’s “lucid prose” and describe it as “thoughtful,” “provocative,” and as offering a “compelling and important argument.”
Mandelbaum’s perspective on U.S. grand strategy and world geopolitics—written, interestingly enough, while the United States military was invading, occupying, and laying waste to Iraq and its people—is that first, following the end of the Cold War, the “enormous power and pervasive influence of the United States was universally acknowledged to be the defining feature of world affairs.”472 Secondly, the United States, although the world’s hegemon, has been and is a benevolent one, functioning in an exceptional manner as the world’s government with a role similar to the sun’s in our own solar system. Mandelbaum’s stress on the beneficence of the U.S. government promotes a clear ideological agenda, a tactic in the struggle for political consciousness at home and abroad:
In the eyes of many, American supremacy counted as a great misfortune. The foreign policy of the world’s strongest country, in this account, resembled the conduct of a schoolyard bully who randomly assaults others, steals the lunch money of weaker students, and generally makes life unpleasant wherever he goes. The United States was seen as the world’s Goliath. . . . Although the United States looks like Goliath, however, in important ways the world’s strongest power does not act like him. If America is a Goliath, it is a benign one. . . . This book explains other countries’ acceptance of the American role in the world by painting a different and more benign picture of that role than the one implied by the comparison with Western civilization’s archetypal bully. As portrayed in the pages that follow, it has something in common with the sun’s relationship to the rest of the solar system. Both confer benefits on the entities with which they are in regular contact. The sun keeps the planets in their orbits by the force of gravity and radiates the heat and light that make life possible on one of them. Similarly, the United States furnishes services to other countries, the same services, as it happens, that governments provide within sovereign states to the people they govern. The United States therefore functions as the world’s government.473
In the chapters that follow, Mandelbaum covers the American role in providing “necessary services” to the world, “acts of charity” flowing from a sense of “compassion” and “international responsibility.” Security is achieved through deterrence and reassurance, including the use of military force in “preventive war,” “humanitarian intervention,” and “nation-building.” Added to this are economic tasks, including the enforcement of contracts, protection of property, assurance of access to oil, and supplying the money needed for global economic transactions, as well as sustaining a high level of consumption to assure global production and trade.474
Mandelbaum’s central thesis stresses that three great ideas provide a consensus for the global dominance of the United States, which has “embraced and espoused them.” These three ideas are peace, democracy, and free markets.475 Later in the book, Mandelbaum has a long section justifying a string of U.S. “preventive” wars and “humanitarian” interventions in the period 1991–2005, including in Iraq, Somalia, Haiti, Bosnia, and Afghanistan. Mandelbaum portrays these wars, with the hundreds of thousands of resulting dead, as part of a selfless United States attempt to make the world a better place for all:
Preventative war and humanitarian intervention not only defended American interests and protected American values, they also served the wider international community. Indeed, these practices did more for others than for Americans, who were not exposed to the depredations of the regimes the United States removed from power and to whom the rogue states that were the objects of the doctrine of preventive war posed lesser threats than they did to their immediate neighbors. Americans certainly believed that they were acting on behalf not only of themselves but also of other countries for the purpose of making the world they shared a safer and more humane place.476
While accusing other “rogue regimes” of being “detached from the normal constraints of decency and prudence,”477 he also claimed that American humanitarianism precluded using brutal tactics to rule its conquests:
Nor, finally, could the United States employ the tactic that had done most to reduce the costs of ruling rebellious subjects in the past: brutality. . . . The regimes that the post–Cold War American interventions unseated often maintained their grip on power by murdering large numbers of their own citizens, thereby intimidating the rest. But the standards of political propriety and decency that prevailed in the United States, as well as one of the purposes of these interventions—to replace vicious, oppressive governments with kinder, gentler ones—precluded the American use of this tactic.478
In the next chapter we will examine in some detail the “propriety,” “decency, and prudence” of the U.S. government’s war and occupation of Iraq, led by the CFR and its members. Here it suffices to simply mention the obscene amounts of American military spending in a needy world and refer to the longer historical record, going back further to the U.S. war on Vietnam, with its millions of victims, and to covert wars waged by the CIA and Special Operations Forces, including against Cuba, Guatemala, Colombia, El Salvador, and Nicaragua, as well as U.S. military invasions of sovereign states like Panama and Granada resulting in unknown numbers of dead and wounded. From this record we can conclude that in recent history there is no country that is anywhere nearly as aggressive and warlike as is the United States under the hegemony of the CFR and its members.
The second and third of the central ideas of The Case for Goliath claim that the U.S. government promotes “democracy” and “free markets.” In the view of capitalist-class intellectuals like Mandelbaum, the concept of “democracy” is limited to the right to choose which faction of the ruling capitalist class will rule for a specified time, before rank-and-file voters are allowed to choose a different faction of the same ruling capitalist class, all of whom follow similar economic and other policies favoring the wealthy. Mandelbaum himself admits that in this current world, ruled by the supposedly benevolent U.S. hegemon, “more than 1 billion people live on less than $1 per day, while another 1 to 2 billion live on less than $2 per day.”479 It may be reasonably asked: what is the quality of “democracy” and “free markets” in such circumstances? In none of the countries conquered and reorganized by the United States in recent decades has a real functioning democracy actually been established, if by that we mean rule by and for the people, with a substantial increase in equality and social justice.
Regarding democracy at home, Mandelbaum admits to a clearly undemocratic practice in the United States, stating that a “relatively small foreign policy elite . . . sets the general course of foreign policy . . . [and] many different issues . . . are usually decided by members of the elite with little or no input from the wider public.” What he refers to as an “elite” is actually a capitalist ruling class led by his own organization, the CFR. Regarding democracy abroad, Mandelbaum briefly recounts the history of U.S. support for dictatorships such as the Saudi monarchy, which grossly suppresses human rights, especially the rights of women. The supposed U.S. belief in “democracy” and its promotion is not mentioned in this context, which focuses on value and profitability of oil, the usefulness of “Saudi oil abundance” and how it “formed the basis for the partnership with the United States.”480
Mandelbaum’s book, which exults and celebrates the American government, is additional verification of the CFR’s promotion of a central role for the powerful state, together with the Council itself, as organizer and enforcer of the neoliberal geopolitical empire. This is in sharp contrast with the more reactionary sector of the U.S. capitalist class, as represented by non-CFR big capitalists like the Koch brothers and “libertarian” think tanks like the Cato Institute that favor, promote, and work for a weaker central state with a much smaller domestic and global reach.
In 2004 during the early phase of the U.S. occupation of Iraq, the CFR’s Henry A. Kissinger Senior Fellow in U.S. Foreign Policy, Walter Russell Mead, completed his book, Power, Terror, Peace and War: America’s Grand Strategy in a World at Risk.481 Mead’s book attempts to be a comprehensive guide and summary of U.S. “grand strategy,” the overarching goals and long-term tactical policies needed to assure U.S. world hegemony in the twenty-first century. In this book Mead presents the Council view of how to use all of the strategic and tactical policies discussed above as a totality.
Mead was elected to Council membership in 1997, and became a Senior Fellow for U.S. foreign policy in 1998.482 He continued as Senior Fellow until 2010, after which he became a professor of U.S. foreign policy at both Bard College and Yale University. A Democrat, Mead supported the U.S. war on Iraq in 2003, voted for Barack Obama in 2008, and remains a CFR member. In the acknowledgments for his book, Mead thanks the many Council leaders, staff, and members who contributed to what was the “complicated social endeavor” of writing it. Special thanks went to the current CFR president, Richard Haass, and former president Leslie Gelb, as well as Director of Studies James Lindsay. Mead also mentions no less than sixty-two CFR members and staff who aided him in various ways with the book, including financial supporters, research associates, reference librarians, study group members, reviewers, and document searchers.483 Although Mead’s own ideas and efforts no doubt predominated, it is clear that the views he expresses closely reflect the collective perspective of a large segment of the Council’s membership and top leadership, likely what Mead was referring to by his comment about the book being a “social endeavor.” The book is labeled “A Council on Foreign Relations Book” on the title page and the Council is also mentioned on the copyright page, reflecting that Mead was a paid employee of the CFR when he wrote the book.
In the book’s introduction, Mead states that he starts “with the idea that there is an American project—a grand strategic vision of what it is that the United States seeks to build in the world,” adding that he writes as an “advocate” of this project. He further asserts that “American foreign policy may be the most complex subject in the world,” touching on a great number of academic disciplines, and that U.S. grand strategy can only be fully understood from the historical record, “what we have done in the past.” This leads to two key generalizations: first, the United States has always been a globally oriented power; and second, in the twentieth century the United States took over from Britain and “built our own version of the British world system, and took on Britain’s old job of acting as not quite the policeman of the world, but at least the gyroscope of world order.”484
For Mead, there are four foundational aspects of U.S. grand strategy and global power, leading to hegemony and an informal world empire. He discusses them in this order: “sharp power,” military/geopolitical; “sticky power,” economic/geoeconomic; “sweet power,” soft; with all three together synergistically forming “hegemonic power,” an empire imposed by American power, but one in which many nations have a stake.485
In his discussion of “sharp power,” Mead follows Brzezinski and the CFR/capitalist-class consensus on the power centrality of Eurasia, especially the eastern and western fringes of this vast super-continent. He repeats the adage that if one nation controls all of Eurasia its power would potentially exceed American power and thereby threaten the United States. Also, like Brzezinski, Mead sees the Middle East and its oil as a “vital concern” due to both U.S. long-term oil requirements and the need to assure the hydrocarbon supplies of our allies. This in turn connects with control of the world’s sea lanes for trade and commodity delivery and prevention of oil insecurity among our allies. Actual oil insecurity might lead other nations to boost their independent military capacities and duel with each other for influence in the Middle East, a situation that could be explosive and therefore should be prevented. The entire United States global neoliberal geopolitical empire is solidified through a system of military alliances and bases, especially in Europe, Asia, and the Middle East, to “promote stability.” This has resulted in the vast and incredibly expensive (costing more than the next dozen of the globe’s top militaries put together), and resource-wasteful (the largest single consumer of hydrocarbons in the world) U.S. military machine, which has as its purpose maintaining potential or actual geopolitical control of the world’s economically and politically key regions. This is the “solid foundation of the American system.”486
Mead defines “sticky power” as the set of global economic institutions and policies that attract others into the U.S. capitalist system with incentives that make it difficult for them to leave. He illustrates how this works using China as an example. The hope is that the rewards of integration into the global economy continue to be attractive enough to keep China cooperative and within the system. Certainly, powerful Chinese families have benefited enormously from the U.S.-created global trade, investment, production, financial, and legal system during our modern era, with their prosperity growing spectacularly and some of it shared with the larger population. Mead argues that American willingness to reduce trade barriers and open United States markets to imports from nearly all nations also helps create a level of prosperity benefiting especially those at the top of the world’s class structure. Strong incentives for maintaining the existing system are also created in other nations when their wealthy families invest in the real property and vast number and type of financial instruments that exist in America.487
In defining “sweet power” Mead closely follows Nye’s ideas. Positive values, ideals, and cultural precepts, such as women’s rights and humanitarian assistance, peacefully draw others into support for the U.S.-dominated system. Immigration and foreign students studying in the United States also help.
The final type—that of hegemonic power, empire—brings the other three together. This creates a whole bigger than the sum of its parts, resulting in consent and legitimacy. Hegemonic power also includes the ability to set the agenda, determining the framework for discussion and debate, something strived for by the CFR itself. The resulting “Pax Americana” also has an aura of inevitability due to its synthesis of military, economic, and soft power, making it very difficult for most nations and leaders to resist and follow another path.488
Mead also discusses the transition from what he calls the “Fordist” era of capitalist development dominant from the 1910s to the 1970s to our current era of what he calls “Millennial Capitalism,” almost entirely avoiding the more useful and accurate terms “Keynesianism” and “neoliberalism.” The term “Fordism,” as used by Mead, is simply the policy of certain capitalists, one of the first being Henry Ford, to pay their mass production workers enough to purchase the goods they, the workers, produce. Mead does not mention the intense and costly class struggles that workers engaged in over many decades to achieve even some level of unionization and the resulting higher wages, better working conditions, and benefits in a given industry. He simply presents it as a given that eventually some capitalists accepted unions, resulting in a more administered, regulated, and stable socioeconomic system, characterized by some state planning, a level of class compromise and less income inequality.489
Mead points out that Fordism/Keynesianism “has gradually been yielding to . . . a new, more vigorous form of capitalism,” which is now being invented and explored. He discusses two very different views of neoliberalism, what he calls “Millennial Capitalism.” Both perspectives, he admits, are “partly true”:
For some, the shift from Fordism to millennialism is a rake’s progress: the end of a system that produced peace, justice, mass prosperity, and social security and the rise of a grotesque new system of inequality, instability, and bare-knuckled competition in a hideous, neoliberal dog-eat-dog world. For others, the shift represents the glorious triumph of technology and entrepreneurial spirit over a decadent and stagnant era, and the new and more dynamic capitalism offers opportunities to eliminate poverty and transform the human condition.490
Despite this recognition of serious potential and actual problems and injustices, Mead, representing the dominant strain in the Council on Foreign Relations thinking, remains a firm advocate of “millennial capitalism,” what we have labeled neoliberalism. Mead’s summary near the end of his book is a strong statement for a globalized neoliberal finance capitalism and against a renewal of what was a slightly more benign Fordism/Keynesianism:
Nostalgic Fordists would like to bring back the welfare state, closed national markets, heavily regulated financial markets, and a greater state role in economic planning and policy. This seems to me to be as unfeasible as it is undesirable. The third quarter of the twentieth century was admirable in many ways, but I cannot believe that it represents the acme of human potential. . . . I do not believe that the genie of millennial capitalism can be forced back into the Fordist bottle. The quest for greater efficiency, productivity, and dynamism is not a feature of capitalism that can be dispensed with; it is the essence of capitalism, not an excrescence, and come what may it will find ways to fulfill itself.491
Mead’s Council on Foreign Relations book represents a distillation of the consensus within the CFR about what American grand strategy and tactics should be in the early twenty-first century. It puts forward a clear argument for a continuation of the global system that the Council has created over the past several decades.
In 2011 the CFR began another of its periodic, years-long comprehensive reviews of its grand strategy in the world, this one called the Renewing America Initiative. In 2013 President Richard N. Haass wrote a book based on this CFR review, Foreign Policy Begins at Home: The Case for Putting America’s House in Order.492 It begins with the following assertions about the dangers facing a United States now in decline:
The biggest threat to America’s security and prosperity comes not from abroad but from within. . . . For the United States to continue to act successfully abroad, it must restore the domestic foundations of its power. Foreign policy needs to begin at home, now and for the foreseeable future. . . . Many of the foundations of this country’s power are eroding; the effect, however, is not limited to a deteriorating transportation system or jobs that go overseas. . . . Shortcomings here at home directly threaten America’s ability to project power and exert influence overseas, to compete in the global marketplace, to generate the resources needed to promote the full range of U.S. interests abroad, and to set a compelling example that will influence the thinking and behavior of others.493
A central part of Haass’s book is an analysis of the current global power situation, with the conclusion that it looks more like the nineteenth than the twentieth century; what, in fact “distinguishes our era is the sheer number and variety of entities with global reach.” He believes that the United States is no longer the world’s only superpower; rather it is the “first among equals.”494 He identifies those entities he sees as major powers (key nation-states), as well as the lesser ones (international organizations, state governments, cities, transnational corporations, media, movements and political organizations, and NGOs):
What makes this era different for those that came before it is the number of actors in the world that have real impact. In addition to the major countries or cluster of countries (the United States, China, European Union, Russia, Japan and India) are numerous regional powers, including Brazil . . . Chile, Argentina, Venezuela, and Mexico in Latin America; South Africa and Nigeria in Africa; Egypt, Iran, Israel and Saudi Arabia in the Middle East; and Pakistan, Australia, Indonesia, South Korea . . . in Asia. . . . A good many organizations would be on the list, including those that are global (the UN, International Monetary Fund, World Bank), regional (the Organization of American States, African Union, the EU, NATO, the Association of Southeast Asian Nations, the Arab League, and many others) and functional (including OPEC, the World Health Organization, the International Energy Agency, and the Shanghai Cooperative Organization).495
Haass then reviews the policies of these key actors, focusing on the key nation-states beginning with China, concluding that none of them has the capacity or inclination to challenge U.S. global power and leadership, and that some cooperation is possible between the largest powers. This means that America has the strategic respite needed to carry out what he calls “Restoration” at home and abroad. The “goal is to increase the number of Americans who can hold their own in an increasingly competitive marketplace, shore up the economic and physical resilience of the country, and ensure that sufficient resources are available so that the United States can do what it wants and needs to do both at home and abroad.” Haass concludes that because there is no “existential threat” internationally, “restoration” is possible as the basis for U.S. policy for a long time going forward, although “there would certainly continue to be wars of necessity.”496 He summarizes his policy recommendations as follows:
Under Restoration, the United States would increase the resources devoted to internal as opposed to international challenges, so as to address critical domestic needs. The aim is to rebuild the foundation of this country’s strength. . . . Second, a foreign policy informed by Restoration would eschew a . . . focus on the Middle East and any more large-scale wars for the purpose of remaking other societies. Instead, the priority of U.S. foreign policy would be to shape the behavior of the other principal powers. In addition, U.S. attention and effort would be more broadly distributed—in particular, to the Asia-Pacific region, the part of the world most likely to influence the course of this century. U.S. attention would also be directed more to the Western Hemisphere. This is consistent with both the region’s centrality to America’s economic and energy future and the reality that stability in Mexico and in the Western Hemisphere more broadly is of vital importance to America’s own security. Third, Restoration would rebalance the implementation of foreign policy, in the process placing less emphasis on military instruments and more on economic and diplomatic tools and capabilities.497
The final section of Haass’s book outlines his approach and, by extension, that of the CFR’s Renewing America Initiative to restoring U.S. power at home. He lists specific policies in a number of fields that would allow America to exert soft power and return to a position of leading by example.498 The first of these policies is federal debt reduction, needed, in his view, to increase economic growth. Leaving out military spending as a source of debt, Haass focuses on so-called entitlements like Social Security and Medicare for the aged that must be
brought under control. The trajectory of Social Security spending can be reined in through a mix of gradually increasing the retirement or eligibility age . . . reducing the fast-growing area of disability payments, and altering the formula by which annual payments are adjusted for inflation. . . . Significant savings could be realized from raising the age for Medicare eligibility, requiring increased co-payments, limiting malpractice torts, means testing and introducing . . . administrative reforms.499
Later in the book Haass gets more specific about how long the retirement age should be extended, stating that when people turn sixty they will still be “facing as many as ten to twenty years of work.” Such “reform” of “entitlements”—which are actually not gifts but the earned savings from the labor of millions of workers, held in trust by the federal government—will, in Haass’s view, help America “present a model of political and economic competence that the world will want to emulate.”
Haass also has chapters on education, infrastructure, immigration, and politics. Education is failing and can best be changed by tying teacher compensation to performance, curbing public sector unions as a “special interest,” and cutting back on teachers’ pensions and health care plans; infrastructure, though not failing, rates only a C grade at best. Immigration is a complex situation, solved by strengthening border security to prevent illegal entry, normalizing the status of those already here, and establishing a rating system for visas that reflects the “market needs” of corporations. As for politics, Haass sees the main problem as gridlock and drift leading to a crisis that could be avoided by various measures to “strengthen the center,” even if a new political party of conservative Democrats, moderate Republicans, and Independents has to be formed.500
Haass argues that public sector unions should be “curbed” and health care and pension benefits cut, policies that are being carried out in the private sector by leading CFR- connected monopoly corporations that have been in the forefront of recent attacks on workers and unions. This is to be expected, given the Council’s base in the capitalist class. The worldwide triumph of neoliberal geopolitics has emboldened capitalists, and they are waging a war on workers generally and unions specifically. Recent examples include the policies of three top U.S. multinational corporations—Boeing, General Electric, and Caterpillar. All three are corporate members of the Council.501 They also have numerous other connections to the CFR. Five of GE’s directors, three of Boeing’s, and the former CEO and one other Caterpillar director are all Council members, and two of these corporate directors have also been Council directors. Despite being very profitable companies, these three corporations have been attacking the unionized segments of their workforce, demanding pay cuts, take-backs, pension concessions, and a two-tier wage structure, with lower wages for new hires. If workers do not agree and try to defend their living standards and collective futures, these corporations threaten to close plants and move them to lower-wage industrial locations at home or in other countries, carrying out this threat when necessary. Recent articles covering this development are explicit: “Caterpillar to Unions: Drop Dead,” and “GE to Unions: Drop Dead.”502
Another aspect of foreign policy that begins at home is the position of the United States as the new energy superpower, encouraged and welcomed by the Council. In the March/April 2014 issue of Foreign Affairs, an article titled “America’s Energy Edge: The Geopolitical Consequences of the Shale Revolution” focused on the strategic thinking going on regarding fracking. The two authors of this article, each a longtime active Council member, are Senior Fellows at the CFR. Robert D. Blackwill is the Henry A. Kissinger Senior Fellow for U.S. Foreign Policy and Meghan L. O’Sullivan, a professor at Harvard’s Kennedy School of Government, is an adjunct Senior Fellow. Blackwill and O’Sullivan both served in the George W. Bush administration as strategists for an attempted victory in Iraq. As individuals who have worked in important roles in the federal government and at the CFR, their grand strategic ideas reflect forward thinking among the higher circles in the U. S. capitalist class.
The Blackwill-O’Sullivan article focuses on the advantages accruing to the United States as it becomes the world’s number one energy superpower due to the successes of the fracking revolution. Competitors, with the possible important exception of China, will in general decline in power, including industrial power, due to the fossil fuel price advantage that the United States will increasingly enjoy. Blackwill and O’Sullivan believe that American geopolitical leverage worldwide will increase, and the traditional oil and gas producers—among them Russia, Iran, Mexico, Venezuela, and Nigeria—will lose power and may even undergo regime changes due to declines in economic growth and budget reductions, leading to mass dissatisfaction among their populations. This “will grant the United States a greater degree of freedom in pursuing its grand strategy.”503 The United States will be empowered to exploit the strategic vulnerability of other nations, pursuing a kind of petro-machismo with renewed imperialistic adventurism abroad. Here we see how geopolitical calculations connect with neoliberal capitalist ones, since the U. S. “grand strategy” focuses on the spread of American-style free market capitalism with its commodification and ecological destruction globally. Needless to say, large-scale fracking—together with mountaintop removal for coal, strip mining the land for tar sands, and deep sea drilling for oil—is yet another illustration of the fanatical drive by capitalists and their intellectual allies to gain geopolitical advantage over other nations as well as increasing their profits by tearing the earth apart, all to achieve a guaranteed doom through more rapid climate change, ocean destruction, and other ecological impacts.
The Council on Foreign Relations, representing the larger U. S. capitalist class, especially its financial sector, has since the mid-1970s played a central role in renewing “the essence of capitalism,” an exploitative, dog-eat-dog “free market” system. This has been developed, intellectually and in practice, as part of a Council-inspired, neoliberal geopolitical empire characterized by the destruction of unions and working-class communities, privatization, speculation, grotesque economic inequality, ecological destruction, and the mass violence of war and conquest. The structures of domination have largely been hidden, the solidarity mechanisms of working-class people have been undermined, and debate about alternatives has been limited, omitting the fact that a different socioeconomic project—one worthy of humanity’s best thoughts and feelings—is possible. The neoliberal geopolitical world is presented as an empire of liberty, but in reality it is an empire of exploitation, violence, and chaos. The following chapters offer some specific examples of how and why this is so.