Liberty. Economics. Common Sense. These are the guiding posts for this blog, and we hope, for the way most of us live our lives. This blog comes to the conclusion that the proper direction for society is one of personal liberty, both economic and political, and limited government that follows sound economic policy.

This blog will offer economic analysis on many political issues of the day along with political theory from time to time. The major inspirations for this blog are writers and thinkers like John Locke, Adam Smith, David Ricardo, Alfred Marshall, F.A. Hayek, Milton Friedman and James Madison among others.

Tuesday, December 1, 2009

Realism vs. Idealism

President Obama believes in a good thing: diplomacy. He believes America has been too arrogant in years past and that arrogance has gotten us where we are today. He believes that if he replaces the traditional American attitude of “we’re the boss,” with a new attitude of “what do you think?” that all will be made well. Like I said, Obama believes in a good thing. Believing in Santa Clause is a good thing too, but we would be foolish to think it would change the world.

Obama thought that the way our enemies and rivals viewed us was justified. He thought that if he could just schmooze them with a little Obamalove, that all would be forgiven and we could all live happily ever after. So far, his relations with the rest of the world have been barely more than him saying, “I’m sorry for the way we’ve acted. How can I make it up to you?”

The unfortunate truth is that we live a world of realism. When Obama takes a step back as a concessionary gesture, our rival takes a step forward. The power we give up by striving for reconciliation is gained by those seeking to undermine us. In short, we live in a zero-sum world.

Obama is operating under the assumption that if he draws back and presents America as a more passive nation, then other nations will also draw back. This theory sounds very appealing and it’s hard to blame Obama for pursuing it, but blame him I will.

By granting concessions, Obama sees himself as extending an olive branch. He assumes that other countries will accept the gesture of peace and respond in kind. Obama envisions a grand bargaining table where everything can be hashed out if only America stopped trying to tell everybody else what to do. Again, this sounds noble and on its surface it’s very appealing. But as president, Obama has a responsibility to look beyond surface illusions. We, as the people, have a responsibility to look beyond surface illusions.

The “Can’t we all just get along?” approach is the easy way out – which would be great if other countries played along. But they don’t. Now don’t get me wrong, I’m entirely for diplomatic solutions. In fact, that’s the only type of solution that will ever be possible. Two sides can trade bullets all day long, but nothing will ever be solved until they actually sit down and talk.

I blame Obama not for his diplomatic intentions, but rather I blame him for neglecting to run the race and instead going straight for the finish line.

When Obama changed tactic on the missile-defense shield in Poland and the Czech Republic, he thought he was giving a concession to Russia in the name of goodwill. He thought that that gesture of goodwill would be returned by Russia agreeing to pressure Iran to halt its nuclear program.

Instead, Russia must have listened when Obama took office and starting basically telling the world, “I’m sorry, it’s all our fault.” Russia viewed Obama’s concession on missile defense as something it was owed, not as a gesture of goodwill. Obama, in Russia’s mind, had simply taken a step in the direction of repayment. If Obama wanted Russia’s help regarding the Iran issue, he would have to deliver a big offering, namely the U.S. dropping its support of Ukraine and Georgia.

Obama had hedged his bets on Russia. If he can’t get Russia to play along, he will be exposed for the paper tiger that he is. As such, the pressure is enormous to get Russia on board. Unfortunately, the only way to do that is to cede them a massive amount of power – something that is clearly not in our interest.

By blinking on the missile defense issue, Obama has shown that he is weak. Russia has him right where they want him – as a pawn that must bend to their wishes lest they tighten the screws even more.

The rest of the world is watching and have acted appropriately: Iran doubts Obama’s resolve and therefore feels no danger in continuing its nuclear program. The Taliban ousted empire after empire from Afghanistan and now know that Obama is not committed to the fight either. Israel knows Obama is wary of making a strong commitment either way regarding the Palestinian issue and has taken the opportunity to strengthen its grip in the region.

If Obama’s goal was to make other countries feel better about themselves, he succeeded. His policies so far have strengthened them and weakened us. International relations is a long term game so I recognize it’s unfair to prematurely judge Obama’s tactics. But let’s look at the way the world works to see if his ideas might bear fruit in the future.

For Obama’s policies to work, he must retreat from aggression and so too must every other nation. If every nation follows suit, tense situations will become de-escalated, cooler heads will prevail, and a sound, equitable solution might be achieved. This is clearly the optimal outcome as it’s in everybody’s best interest.

However, while the end result might be in everybody’s best interest, getting there never will be. Nations are rational actors. That is, they pursue what they perceive to be in their own best interest. In the world of international relations, security is the golden fruit. The more power a country acquires, the better equipped it is to provide for its own security. Not only will it have the means to defend itself, it will have the reputation of being strong, thus preventing attacks before they even occur.

Nations seek power. Therefore, for a country to willing to give up some power because it’s in the world’s best interest is unlikely. If a nation is willing to walk away from power, as Obama did on the missile defense issue, it leaves that power on the table for someone else to pick up. Russia could have agreed to reciprocate Obama’s concession by pressuring Iran on the nuclear issue. Instead, they snatched up the power Obama left behind. Not only does Russia now have power it did not have before, the United States doesn’t have power it once had. That swing of power can be devastating.

Let’s say all countries follow suit with Obama and agree to give up some power in the name of the greatest good. In effect, they are leaving some of their power on the table and are trusting that nobody else will snatch it up. It would be very tempting for a country to renege on the deal and snatch up all the power that it could. Not only would it not have to give up any of its power, it could become stronger through others’ weakness.

Of course every single country sees the situation that way and therefore will never willingly give up power; and if it does, it will be too tempted to try to snatch it back and become strong when everybody else is becoming weak.

It is in every country’s interest to “cheat” the system, that is, it is the dominate strategy. Thus, the interest of the individual (the dominate strategy) is in conflict with the optimal outcome – a dilemma in the truest sense (for more on this, see Game Theory).

Obama would be better off by recognizing the situation for what it is, that a tenuous peace can be achieved if the scales are balanced just so. In these fleeting moments of balance, that’s the time to work towards peace. Obama’s strategy will never work. Not only for the reasons mentioned above, but by stacking the deck against himself and giving power away to others, Obama is not only perceived as weak, but is actually weakening the country. In a world of power politics, the weak players never have a say in what goes on. Why would Obama think that he would be able to manipulate the situation when he is too weak to be worth listening to?

I fear Obama has massively misjudged the arena of international relations. He is a guppy in a shark tank. Hopefully he will come around, but that will be almost impossible without some hard knocks to hammer the message home. I never, ever want to see our country or our president take hard knocks.

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