Book Reviews on global economy and geopolitical readings

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1 Book Reviews on global economy and geopolitical readings ESADEgeo, under the supervision of Professor Javier Solana 3and Professor Javier Santiso 1

The Future of Power Nye Jr., Joseph (2011), New York: PublicAffairs In a great many transnational affairs, giving power to others can help us to attain our own goals.

2 The Future of Power Nye Jr., Joseph (2011), New York: PublicAffairs In a great many transnational affairs, giving power to others can help us to attain our own goals. In this world, networks and connections become an important source of power. A narrative of intelligent power for the 21 st century does not consist in maximising power or preserving hegemony. It consists in finding mechanisms to combine resources and so achieve successful strategies in the new context of the diffusion of power and the rise of the rest". Basic idea and opinion In this book, Joseph Nye 1) explores what power means; 2) analyses the geopolitical stage of the 21 st century, marked by fundamental shifts of power; 3) sets forth the strategy for turning power into successful results; and 4) shows how US leadership will be affected by the new power and context, characterised by a globalised, interdependent world with increasingly porous borders, in which the US will have to cooperate and forge alliances in order to achieve its objectives. And this, according to the author, will be the main challenge facing US leadership after the economic crisis. Contrary to the vision of many positions today, Nye concludes that the US is not in decline before the re-emergence of other countries such as China and India GDP should not be the only indicator for making future projections but if the US wants to manage the rise of the rest correctly, it must know how to select the right power strategy depending on the context. This will only be possible by means of intelligent power: a combination of hard power (military and economic coercion) and soft power (persuasion and attraction). The author Joseph S. Nye Jr. is a Professor at Harvard University and former Dean of the Kennedy School of Government at Harvard University. He graduated from Princeton University, went on to study at the University of Oxford, and took his PhD at Harvard University. 2

3 He was Assistant Secretary of Defense for International Security Affairs in the Clinton Administration, Chair of the National Intelligence Council and Deputy Under Secretary of State for Security Assistance, Science and Technology. One of the most important theories to have earned him his current prestige as a political scientist is that which he developed around the idea of what he calls soft power. Power The concept of power is elusive and difficult to measure. And its definition, like that of many other ideas, is not exempt from difficulty. For Nye, the formulation of a political concept of power must always take into account who achieves what, and how, when and where they do so. Resources count, because power is conveyed by means of resources, be they tangible or intangible; but they do not guarantee success on their own. The conversion of power constitutes an essential variable if one wishes to obtain results from resources. For this reason, given that results take precedence over resources, the author considers that more attention should be paid to context and strategy as opposed to resources. Context: transition of power and diffusion of power The world today is distributed in a pattern that resembles a complex threedimensional game of chess. On the top board, military power is largely unipolar and will probably remain so for some time. On the middle board, corresponding to economic power, shifts of power are taking place from one dominant State to one or more other States, with the US, Europe, Japan and China as key actors, and others that are up and coming. This level is now multipolar. The bottom board is the sphere of transnational relations. It lies beyond governmental control and is played out by such diverse actors as companies, NGOs and terrorist organisations. It also includes new challenges such as pandemics and climate change. Power on this level is so diffuse that it makes no sense to talk of unipolarity, multipolarity or hegemony. The transition of power from one State to another is a familiar event in history, and less complex to manage that the diffusion of power. It is not unthinkable that the growth of China and India and the relative decline of the US might generate instability, but it is a problem with precedents, and lessons can be drawn from history. Many analysts conclude that the rise of Germany and the fear it engendered in Britain contributed towards the outbreak of the First World War. Yet on the other hand the US overtook Britain at the end of the 19 th century without conflict. Although confrontation is not inevitable in shifts of power, much depends on how we handle it. Diffusion of power is a process that, in the opinion of the author, is more novel and difficult to manage. In the global information age, more and more actions occur beyond the control of governments, even the most powerful ones. Information, once reserved exclusively for governments, is now available for mass consumption. Barriers 3

4 to entry into world politics have been lowered, and now non-state actors have a strong presence in the international arena. Hackers and cybercriminals cause thousands of millions of dollars in damage to governments and companies. And a pandemic spread by a bird can kill more people than the First or the Second World War. The nation-state is likely to continue to be the dominant institution for some time to come, but the information age and globalisation is altering the geopolitical stage in such a way that States find it increasingly difficult to provide security (even the US, which will have to cooperate if it wants to achieve its objectives). It is not enough to think in terms of power over others. It is also necessary to think in terms of power with others in order to reach goals. Intelligent strategy: military power, economic power and soft power For the author, in today s three-dimensional world at the same time unipolar, multipolar and apolar there is little sense in looking at the world through the lens of realism (focusing on the first level of the board) or through that of liberalism (focusing on the other two levels). What is required is a broad intelligent strategy that is capable of managing the various distributions of power in each sphere and understanding the pros and cons of each type of power. In power relationships there are several strategies to alter the behaviour of the other party: order (coercion), the capacity to control agendas (persuasion), and the ability to influence the preferences of others without the need to order them to alter their behaviour (attraction). In international politics, these last two power strategies, corresponding to soft power (institutions, ideas, values, cultures, and the perceived legitimacy of policies), belong to the third dimension, that of transnational relations, whereas hard power (force and money) belong to the military and economic dimensions respectively. In today s world, soft power can be much more effective and less costly than hard power. Nowadays, the State that wields the biggest army is not necessarily that which prevails over the rest. Resorting to military force to achieve one s objectives is more complicated than it used to be, not only for reasons of cost and public opinion but also because the geopolitical landscape has changed. By way of example: in 1853, Commodore Matthew Perry sailed into the Japanese harbour of Shimoda and threatened to bomb Japan unless it opened up its ports to trade. Today, the scope and dimension of globalisation would prevent resolving trade disputes between the US and Japan through military solutions. Nevertheless, the fact that military power is not always sufficient to decide particular situations does not mean it has lost all usefulness. Military power will continue to be important because it helps to structure world politics and influences the political calculations of players. 4

5 The same can be said of economic power. At the end of the Cold War, many analysts proclaimed that geoeconomics would replace geopolitics. Economic power would be the key to achieving success in the political sphere. It is true that a sound and growing economy is the foundation for all the instruments of power. Furthermore, economic instruments such as sanctions and aid will be crucial in this century, as they are often the most efficient instruments in terms of relative costs. But in the author s opinion it is a mistake to say that the 21 st century will be the era of geoeconomics. The diffusion of power to non-state actors, including transnational companies, places limits on the effectiveness of the use of economic instruments in State strategies. In the information and globalisation age, the winning State (or non-state actor) will be the one with the best story. Power will be defined by innovation, technology and new relationships. For this reason, the author underlines, soft power will become an important factor towards achieving objectives. Although soft power is more complex to incorporate into a government strategy than hard power its results are long-term and difficult to quantify, establish and/or control when a government is sensitive to structural goals and values, such as the promotion of democracy, human rights and freedom, soft power is in fact superior to hard power, as the author frequently emphasises. This does not mean that the strategy of soft power replaces hard power. Soft power, like economic and military power, also presents certain limits, for example when it comes to resolving a nuclear proliferation dispute. A three-level world requires a strategy that tackles all three levels simultaneously. This is why the author proposes intelligent power (the main idea of the book), which would consist of the ability to combine the various power resources to achieve effective strategies in this new scenario marked by the diffusion and shifts of power. In a threelevel game, the player who focuses on only one level will end up losing. US leadership In the face of the new reality on the international scene, many are voicing the opinion that the US will go into decline, just as Britain did in the past. For the author, it is deceptive to talk of decline in this context, as it mixes together two different dimensions: absolute decline (decadence or loss of ability to use resources effectively) and relative decline (other States increasing their power resources and using them more effectively). Contextual intelligence will be fundamental here to understand that the problem of US power is about relative, not absolute, power, and to develop strategies in consonance with this. It is true that countries such as China, India and Brazil are increasing their share of world power and transforming the geopolitical stage. The most recent projections estimate that by 2027 the so-called BRICs will have overtaken the economy of the rich countries. And this will undoubtedly spell a challenge for the US, but not decline. Even supposing China overtakes the US economy, the two countries will be equal in size, but 5

6 not in composition. Corruption, poverty, growing inequality, mass internal migration, the obstacles of an economy in transition with inefficient State-owned enterprises, demographic problems and inadequate institutions that can foster political instability are all serious challenges that China must face in order to be able to convert its resources into power. Even if China does not suffer internal obstacles, these projections focus solely on GDP growth, and ignore other important dimensions of power, such as the advantages the US enjoys in military power and soft power, and China s geopolitical disadvantages in Asia as regards the internal balance of power in comparison with the US, who will continue to have Europe and Japan, and probably India too, as firm allies. With these arguments the author states that China is not very likely to be able to overtake the power of the US, at least in the first half of the century. Having said this, the book warns against complacency. The US today faces serious debt, education and political deadlock problems. If it wants to carry on being the most powerful country, it must learn to distinguish between those situations that have a solution and those that do not, and start to ask itself how to combine the different types of power in order to produce intelligent strategies with other countries, rather than over other countries. Joseph Nye coined the term soft power in the late 1980s and reintroduced it into the debates on US foreign policy in the wake of 9/11 following the publication of his book Soft Power: The Means to Success in World Politics. Now, in a context marked by the economic crisis, the emergence of new countries, and the perception that US leadership is in a period of decline, he is generating debate once again with the publication of his new book The Future of Power and his proposal of intelligent power, of which the Obama Administration has been the first standard-bearer. This book is highly recommendable for any reader seeking an insight into the geopolitical stage of the 21 st century and strategies for turning a country s resources into power. Although the author focuses mainly on the US, his recipe can be applied to any country, as he is not proposing a strategy to overcome the crisis, but rather addresses the various dimensions of power and the pillars on which the US should rest if it wants to continue to be powerful in a context in which other countries are emerging. Perhaps this is precisely the weak point of the book: lack of precision about the power of the US in the mid term and the policies needed to recover from the economic crisis. 6

Global Scenarios until 2030: Implications for Europe and its Institutions

January 2013 DPP Open Thoughts Papers 3/2013 Global Scenarios until 2030: Implications for Europe and its Institutions Source: Global Trends 2030: Alternative Worlds, a publication of the National Intelligence