10/07/2012 09:31 am ET Updated Dec 07, 2012

Mitt in a World Without Precedent

It was said of President Ford that he could not walk and chew gum at the same time. Whether that statement truly applied to Gerald Ford is debatable. However it does appear to apply to Mitt Romney when he talks about foreign policy.

American foreign policy has changed radically since the end of the cold war. It is no longer simply a Churchillian game of big power politics, but a multi-layered game of power politics wrapped inside the enigma of globalization. Strangely, Mitt Romney, whose strength should be in understanding the pragmatics of global financial relationships, appears to totally not understand the reality of globalization. His statements on Russia, China and Europe sound at best like those of a young Churchill from the days of the Boer War, or at worst like a newly minted late 1940's cold war warrior.

We are living in a time without historic precedent. Globalization has radically altered the relationship among nations forcing global rivals and potential rivals to act as each other's primary joint venture partners. During the cold war, the Soviet Union's internal machinations never affected the United States' continental-based economy. Now rumors come out of Beijing that China might consider stimulating its economy, and the New York stock exchange immediately bumps up, as if Ben Bernanke announced QE4.

The tethering of one nation to another by the financial strings and trade links of globalization has created an economic and technological dependency among states, limiting the freedom of action of individual countries and dramatically raising the risk of global economic contagion. It has turned on its head former Speaker of the United States House of Representatives Tip O'Neill's old dictum that all politics are local. Today all politics are global. If the president of the United States or the premier of China or the chancellor of Germany or a candidate for high office utters something intended for domestic politics, it no longer remains local, but can easily move world markets and possibly have dangerous global ramifications. In today's world the Bavarian voter's displeasure with the idea of a European bond fund directly affects the 401 K savings account of an American soon to retire.

And of course at the same time traditional conflicts among modernity, religion, nationalism, and old-fashioned autocracy continue, exasperated now by technology and social media.

Complicating this picture further, and acting as a conflicting dynamic to globalization, is the fact that the world has become stratified. Major countries and blocs float by each other with different perceptions of the times and with a misunderstanding of each other's structures, cultures and institutions.

Europe, our traditional ally and largest customer, is floundering, as we all know, in its worst domestic economic and structural crisis since the end of World War II. This problem, as perceived from the point of view of American financial experts, can be partially solved with an immediate injection of a zone-wide depository insurance system followed by the issuing of Eurobonds. But this American point of view ignores the reality of Europe's structural problems: that the Euro Zone is not a country with a single currency but 17 countries all sharing the same currency; 17 countries which have differing views of sovereignty and different histories and cultures.

In Russia, President Putin appears to be trying to emulate the czars in playing the "Great Game" of the mid 1900s, with little understanding that the time for such games is way past. Partly playing the game to demonstrate that Russia is still relevant, yet refusing to make Russia economically relevant by breaking with its extreme system of crony capitalism.

In China, many in the leadership know that in order for China to continue to succeed it must further open its economy and its society. At the same time, others representing various vested interests are fearful of losing their positions if the economy opens further. A situation some ways oddly similar to China 600 years ago when, as one of the wealthiest countries in the world, it chose to close its doors to outsiders and to new ideas, thus beginning a long period of economic decline.

At the same time, there are the Americans with at best a schizophrenic view of globalization; on the broadest scale they enjoy its benefits, but are simultaneously angry at some of the economic and cultural changes that globalization has wrought. These Americans are fearful that America is losing her perceived place in the world, and troubled by a loss of control as America is forced to cede some economic sovereignty.

And yet, Mitt Romney's worldview appears to totally misunderstand all this complexity, ignoring totally that we now live in a joint ventured world. Instead he appears to focus solely on America's fears. His view that we need an enlargement of the military ignores the fact that a larger military can't stop economic contagion and can do little against radical believers throwing stones at an embassy. Romney's statements on foreign affairs are at best strangely naïve or overtly political, flouting the dictum that all politics are now global. They ignore a basic rule of decision making, that when there are no precedents, leadership needs to be based on the understanding of the current realities and not on the past or on fears of one's constituents.