10/30/2013 06:18 pm ET | Updated Jan 23, 2014

Exporting Liberal Democracy, Market Capitalism, and Rule of Law

U.S. foreign policy emphasizes the spread of liberal democracy, market capitalism, and the rule of law. A legitimate debate can be had about the wisdom of making these the basis of foreign policy. And a legitimate debate can be had about whether to pursue these policy objectives by example, encouragement and assistance, coercion with economic sticks and carrots, or by compellence through military force. Which policy objectives are chosen and how they are pursued projects an image on the world stage. U.S. intentions matter little; its actions are interpreted by foreign governments and publics according to local narratives. Those interpretations establish the US "power over opinion." When power over opinion is weakened, exporting market capitalism, liberal democracy, and the rule of law become more difficult and more costly. In the extreme, enemies are created. Finding the sweet spot -- providing national security without destroying the thing it hopes to protect -- is the challenge.

One of the earliest international relations scholars, Edward Carr, was the first to define the instruments of national power. "Political power in the international sphere may be divided, for purpose of discussion, into three categories: (a) military power, (b) economic power, (c) power over opinion. ... But power is an indivisible whole; one instrument cannot exist for long in the absence of the other." A three-legged stool metaphor comes to mind; the legs must be strong and balanced.*

Pre-WWII, the New Deal and the U.S. "Arsenal of Democracy" set the country on a new course. A vastly transformed technology sector brought higher paying jobs. The GI Bill induced millions to attend college and created a rapid expansion in home construction and ownership. The middle class grew larger and stronger. During the Cold War, the "thriving economy and high standard of living" of U.S. capitalism compared to conditions of Soviet communism contributed greatly to U.S. power over opinion around the world. During the 1960s, the benefits of liberal democracy were expanded to increasing portions of the population through the Civil Rights and Voting Rights Acts. Power over opinion was strong, and exporting liberal democracy and market capitalism were relatively easy.

At the end of WWII, the U.S. economy was the largest in the world while others lay in rubble. Since then Europe and Japan rebuilt, and the economies of South Korea, Taiwan, the Asian Tigers, India, and Brazil grew to represent an ever larger portion of the global economy. As other economies grew, the expanding U.S. economy represented a smaller and smaller portion of the global economy. Today, the economy of the European Union exceeds the U.S. with China close behind. Japan and India have reached rough parity in a second tier along with some EU member states. The U.S. economy went from the undisputed world leader to being one of several world leaders. U.S. behavior on the world stage has yet to reflect the new reality.

A nation's security ultimately rests on its economy and social fabric, and at the end of the Cold War, major powers -- friend and foe -- reduced military expenditures and shifted the freed resources to economic and domestic policy pursuits; less so the United States.** The 12 years of Reagan-Bush deficit spending on weapon systems left the U.S. with a modern industrial-age military and transformed the U.S. from leading creditor to leading debtor nation. Failing to step back from the permanent war footing of the Cold War, today's U.S. military spending accounts for about 43 percent of the world total, almost half, outspending the next dozen or so countries, including the combined expenditures of the EU, China, and Russia. The net result is a globally dominant military and a debt to match.

The performance of the U.S. market economy during the Great Recession did little to impress the developing world. In China, the mixed command/market economy performed better and has shown advantages in other developing countries. The more socialistic Scandinavian countries fared quite well. The current ideological divide in American politics denies the U.S. resort to the measures best suited to economic recovery. Just as the Soviet's centrally planned economy was "relegated to the dustbin of history," some developing countries have proclaimed capitalism approaching its end as well. Whether they are right or wrong, U.S. power over opinion weakened, and exporting market capitalism became harder.

Today, progressives -- those who wish to move beyond the status quo -- appear to be checked. Conservatives -- those with a status quo bias who urge caution and incremental steps forward -- appear silenced. Regressives -- those who believe that progress has gone too far and should be rolled back -- appear to have gained the upper hand. Some see "liberal democracy in retreat." Expanding the benefits of liberal democracy to include more and more segments of society set an enviable example abroad. Today's treatment of a president that isn't white enough for some, voter suppression, increasing income disparity between middle and upper classes, images of the 99 percent ruled by the 1 percent, lagging modern industrialized states in health care delivery, mass shootings, world-leading incarceration rates, and inability to govern, all weaken U.S. power over opinion and make exporting liberal democracy harder.

Following WWII, the U.S. led in establishing a postwar order through treaties establishing international law. More recently, the U.S. has operated outside of international law and in opposition to the UN. War in Iraq in opposition to international sentiment expanded the divide between the U.S. and traditional allies in Europe and Japan. It has exempted itself from international law that it initiated, including the International Criminal Court, the Kyoto Protocol on the environment, and bypassing the Geneva Convention by creating the new "enemy combatant" category. Establishing the Guantanamo prison and events at Abu Ghraib damage the U.S. image as do extra-judicial killing and extraordinary rendition, but less so than invasion, forced regime change, and occupation. Electronic data collection on domestic and foreign audiences, including allies, further damages the U.S. image. U.S. power over opinion is weakened, and exporting the rule of law has become harder.

The instruments of national power have undergone significant change since the end of WWII and the Cold War. The economic instrument has seen an absolute increase but a significant decline relative to the global economy. The military instrument has undergone an absolute reduction post Cold War but in relative terms remains the overwhelmingly dominant military. The power over opinion, the forgotten instrument, has been in a downward spiral following the invasion of Iraq, the Great Recession, and the current governmental dysfunction. With two instruments of power weakened, the U.S. relies more heavily on the military instrument, quite often with further damage to the economy and the appeal of the image we have to sell. The result is that market capitalism, liberal democracy, and the rule of law are more difficult and more costly pursuits.

Aristotle and Socrates made an important distinction in the exercise of power. "Leadership or hegemonia is exercised over equals and allies in the interest of those over whom that power is exercised, and domination or despotia is exercised over enemies [or] unequals, ..., in the interest of those who exercise power." To a great extent, regardless of intentions, the U.S. power over opinion depends on whether it appears to others that it is exercising leadership or domination.*** Weakened power over opinion raises the cost and lowers the probability of achieving everything the U.S. attempts in foreign policy. Getting our own house in order, setting an enviable example, best serves domestic and foreign policy objectives.****

* Edward Hallett Carr, The Twenty-Years' Crisis 1919-1939: Introduction to the Study of International Relations, New York" HarperCollins, 1964. Originally published in 1939.

** Leslie Gelb, "GDP Now Matters More than Force: A US Foreign Policy for the Age of Economic Power," Foreign Affairs 86, no. 6 (November/December 2010): 35-43.

*** Zbignew Brzezinski, The Choice: Global Domination or Global Leadership, New York: Basic Books, 2004.

**** Richard Haass, Foreign Policy Begins at Home: The Case for Putting America's House in Order, New York: Basic Books, 2013.

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