Robert Samuelson March 23, 2013
March 23, 2014
For the record, it’s worth noting that Russia’s swift seizure of Crimea confounds and contradicts one of the hopeful axioms of conventional wisdom. Thepresumption — rarely stated openly but widely believed — has been thatthe growing economic interdependence of nations reduces traditionalgeopolitical conflicts. Globalization deters war. Countries have toomuch to lose to risk conflicts that will antagonize trading partners and international investors. The tendency is to “work things out” ratherthan threaten these vital relationships.
This vision of a world pacified by economic self-interest is largely anAmerican one. It projects U.S. optimism onto the rest of the world.Americans’ obsession with “getting ahead” defines us. It provides acommon denominator for inclusion. The shared striving for economicsuccess mutes differences of religion, region, race and ethnicity, where conflicts and contrasts are more unyielding. We can all join the rushfor riches without sacrificing the exclusionary aspects of our personalidentities. What worked for us can work for everyone. It is easier tosettle economic disputes than more stubborn disagreements stemming fromheritage, history and values.
Up to a point, the past half-century has vindicated this vision. Itsgreatest achievement is the European Union, which started as “the common market” and demonstrated that economic integration can muzzle theanimosities of centuries of war. “Our story is of enemies making peace,” as one E.U. official says. Conflicts along national lines haven’tdisappeared, but they have moved from battlefields to bureaucracies.
The end of the Cold War gave the vision another boost. The competitionbetween capitalism and communism was settled. The American money chaseseemed to go global. Cross-border trade and investment increasedrapidly. The emergence of middle classes in some countries (South Korea, Brazil, India, China) provided strong constituencies for economicdevelopment. Although conflicts didn’t vanish, they seemed to originateincreasingly from non-state actors (al-Qaeda), regions (Africa) andcountries (Afghanistan) at the fringes of the global economy.
This economic ideology was uplifting. For some countries, it rationalizedreduced military budgets. But in annexing Crimea, Russia defied thenorms of this new world order. Russia resorted to military power, notdiplomacy. It disregarded the threat to its economic interests and theeconomic interests of its trading and investment partners. It flauntedits nationalism.
We’re relearning an old lesson: History, culture, geography, religion andpride often trump economics. The nation-state remains, reminds Harvardpolitical scientist Jeffry Frieden, author of “Global Capitalism: Its Fall and Rise in the Twentieth Century.” It defines its interests on its terms. Vladimir Putin, notillogically, sees Russia threatened on its borders by an U.S.-ledcoalition that, Frieden says, “is hostile in the sense that most peoplein the West would like to see Putin’s regime go — it’s authoritarian; it frustrates our interests.”
Globalization could never swamp everything else. Economics is not omnipotent. Oneblow to this mythology was the 2008-09 financial crisis. Markets promote prosperity and deliver benefits, but they also stir instability andimpose costs. The world may be flat, as columnist Thomas Friedman argued in his 2005 book, in that modern societies compete and cooperate in a large globalsystem. But the world remains round in the sense that traditionalgeopolitical conflicts, aspirations and pressures often dictate events.(Think Iran.)
What’s left is a messy mix of old and new. Countries pursue their goals inways that involve, but are not limited to, their economic interests.(Think China and, yes, the United States.) Global economic integrationhas run ahead of political integration, and the divergence is a sourceof instability. Putin surely knew that his move against Crimea wouldhave adverse repercussions — and they have. Writes one Financial Times commentator:
“Russian companies and banks have withdrawn billions of dollars of deposits from U.S. and European banks, fearful that the money could be seized orfrozen in the event of tough sanctions. Likewise, Western institutionshave been busy minimizing their exposure to Russian banks and industrial companies.”
The financial turmoil has (so far) been limited and localized. The same can be said of the sanctions imposed by the United States and the EuropeanUnion to deter further Russian moves against Ukraine. These have beentempered for understandable reasons. As diplomatic levers, the tools ofglobalization are a double-edged sword. Mutually beneficial economictransactions, if reversed abruptly or forcefully, can become mutuallydestructive.
All this could change in a flash. Crises are inherently hard to predict and subject to miscalculation. Whatever happens, we’ve been given a harshrefresher course in realpolitik.
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