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Profile: James M. Lindsay

Published by The New York Sun on 2005-02-01

Two themes crop up consistently in a conversation with James M. Lindsay, vice president and director of studies, and the Maurice R. Greenberg chair, at the Council on Foreign Relations.

One is his belief that the primacy of American economic and political power needs to be maintained globally. Such primacy, he says, can only be ensured through the strengthening of a rules-based international system which "reflects our values." And, he warns, primacy of American power is "by no means preordained," especially as other countries -- notably China and India -- get speedy access to advanced technology and develop marketing systems for cheaply produced goods and services.

What will it take to achieve that objective of sustaining American primacy?

The answer is contained in Dr. Lindsay's second theme: the importance of enhanced international cooperation at a time of rapid globalization and geopolitical uncertainties.

"The continuation of American prosperity will depend on decisions taken in foreign capitals -- such as Beijing," he said over lunch yesterday. "The fundamental task of U.S. foreign policy is to blend power with cooperation."

Lest that sound like a fatuous bromide coming from a man who's been associated with a major Washington think-tank, the Brookings Institution, and as a professor of political science at the University of Iowa, let it be noted that Dr. Lindsay -- his doctorate was obtained at Yale -- served on the National Security Council. As director for global issues and multilateral affairs on the staff of the NSC, he was responsible for overseeing UN reform, State Department reorganization, and funding for international affairs.

His judgments on economic and geopolitical issues flow from first-hand familiarity with the hard realities of governance in Washington.

"Being in government is all go, go, go," he said. "It's very, very difficult to find time for reflection.

That makes it all the more critical that economic and foreign policy is predicated on -- and continuously nourished by -- nuanced readings of a changing world. To put it another way, policy makers need to draw on the inputs not only of other policy makers but also constituencies such as think tanks, academe, business, finance and foreign chancelleries, particularly of like-minded countries.

To put it another way, Dr. Lindsay said, "The Bush Administration needs to assure our allies that America isn't trying to impose itself on their sensibility."

And to put it still another way, "President Bush needs to listen more to other countries," Dr. Lindsay said.

Such comments coming from a man in his position -- the Council on Foreign Relations has been considered the American Establishment since its inception in 1921 -- are certain to invite the attention of policy makers and that cohort of advisers who constitute the wellspring of ideas that shape America's economic and security interests, both in the short term and the long term.

Dr. Lindsay isn't particularly worried by the short term exigencies of economics. He isn't alarmed that the American economy slowed to an annual growth rate of 3.1% in the final quarter of 2004, which the Commerce Department said last Friday was the weakest quarterly rate in almost two years. It attributed the slowdown mostly to rising imports.

"But it's the long-term health of the economy that concerns me," Dr. Lindsay said. "That takes us to the very heart of the question of the long-term sustainability of American power. America's great power is not a state of perpetual grace. Economic health cannot be taken for granted."

It cannot be taken for granted not only because of the falling value of the American dollar, which makes exports cheaper but which also discourages long-term investment by foreigners in this country. It cannot be taken for granted because there are vast sections of the U.S. budget that aren't open to trimming, such as entitlements and non-discretionary spending, which account for almost two-thirds of the overall 2005 budget of $2.4 trillion.

At the core of Dr. Lindsay's economic concerns, of course, is the current-account deficit -- which includes the trade deficit -- now estimated by the Congressional Budget office to be nearly $650 billion, or nearly 6% of America's gross domestic product. He's concerned about the budgetary deficit, which is around $424 billion and which has been thickened by defense expenditures related to the global campaign against terrorism and the Iraq war.

"So how do you tackle this situation? You either raise taxes, which this administration isn't about to do, or you continue to borrow money -- which we're doing mainly from China and various Asian central banks," Dr. Lindsay said. "What happens when these countries no longer want to buy our bonds and Treasury bills?"

Those countries mostly enjoy huge trade surpluses with America: China alone has a trade surplus of more than $150 billion, accounting for a fifth of its overall foreign-exchange reserves. Because of the falling dollar, Asian lenders find themselves in the increasingly untenable situation of lending money to their biggest trading partner -- the U.S. -- so that it can pay for buying goods from them. A number of Asian central bankers have been reported to favor investing the $3 trillion that's currently laying in Asian treasuries in euro-linked bonds, according to Arjuna Mahendran, chief economist of Credit Suisse in Singapore.

"Good economics is all about mutual voluntary problem solving," Dr. Lindsay said, bring the conversation around again to his emphasis on increased international cooperation between America and its allies. "There's a remarkably intricate dance of the great powers that's going on. The world of the 21st century is very different from the world of the 20th century."

The world of the century just gone by was one where American economic and foreign policy had a fundamental objective: to prevent any other country from dominating the Eurasian land mass. In the early part of the last century, therefore, that objective involved taking on Germany's hegemonic ambitions. After Germany's defeat in World War II, American attention -- and economic and geopolitical resources -- was directed toward winning the Cold War with the erstwhile Soviet Union.

But that objective disappeared after the collapse of the Soviet Union, starting in 1989. "The reality now is that America is the dominant military, economic and cultural power in the world," Dr. Lindsay said. "That's not to say that it doesn't face threats -- it's just that the threats are no longer geographical.
The threats now flow from globalization, the freer movement of people, goods, capital and ideas across borders. Globalization certainly helps America, but it also undermines U.S. primacy because more and more people are empowered by it."

"And globalization also empowers the embittered -- Al Qaeda, for example," Dr. Lindsay said.

"So the challenge for America in this age of globalization is to create institutional arrangements and policies that would reinforce U.S. power and interests," he said. "That means spending national capital wisely. It also means developing a common ground for like-minded nations to occupy. The president has to do a better job of explaining American diplomacy. Many nations want reassurance that America isn't turning its back on a rules-based international system. No one -- not individuals, not nations -- likes to be lectured, to be told what to do. Ad hoc coalitions aren't going to work in the long term. You need more permanent arrangements based on cooperation among nations."

This, in Dr. Lindsay's view, applies as much to geopolitics as it does to economics. That's one reason why he's engaged in assisting a bipartisan Congressional review of international institutions such as the United Nations, which is led by Representative Frank Wolf, Republican of Virginia.

The central question that the review poses is: What kind of a change is needed to build a consensus across the aisles on American policy regarding international institutions?

That consensus must also apply to the American public, Dr. Lindsay said, "otherwise people will sit on their hands if they don't see foreign policy to be in their self-interest."

"I can't think of anything more harmful than an America that turns inward," he said. "I proceed from the assumption that a world of sustainable democracies is far more stable than one of autocracies. That's why American primacy must be magnified -- not with a view of converting others, but to bring them along in the common cause of democracy and economic prosperity."

But how do you create such a world of more democracy and democracies?
"Not at the point of a bayonet," Dr. Lindsay said. "Foreign policy, international economic policy is rife with trade-offs. You can't get everything you want. Others nations want to be shown respect. Other people's good will is crucial to furthering our global objectives. We'll just have to go out there and engage in more retail politics. Style matters. I've always admired George W. Bush for his people skills. He has a very high people IQ. Now he needs to go out there and listen more, needs to bring along people more."

Is he optimistic about this happening?

"I was a pessimist before Oct. 27, 2004 -- and then the Red Sox won the World Series," Dr. Lindsay said. "So dreams can come true. I suppose we'll muddle along, and it may even be a very bumpy ride. But I believe that America's interests, and the world's interests, are best served by an expansion of market democracies. It's not a perfect system -- but as Winston Churchill said, it's still better than anything else. We have to be circumspect about our certainties -- and we still have to be willing to whack the bad guys."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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