I Am Pessimistic about the Future of EU

In Europe, we have a refugee crisis now and it looks like the EU is not able to agree on any reasonable common policy. Liberals criticize the xenophobic tendencies among the majority, they say we should be more open towards immigration in general, but on the other hand ordinary people are really afraid of Islam. Where is the solution?

I don’t think it’s unreasonable to say that you cannot take an unlimited number of refugees, because politically in the long run a lot of European countries have a hard time assimilating these populations. In the long term this is a threat to good democratic politics in many parts of Europe. There is some justification to being a bit restrictive.

Looking at the US, which is much more successful in accommodating immigrants from diverse cultures, is it even a possible model for Europe?

It really depends on the country. Also there are different ways of assimilating people. The French, for all the problems they have had with Charlie Hebdo and so forth, have got a very large Muslim population and a big part of that population is actually pretty well integrated. The French really do have a concept of republican citizenship not tied to ethnicity. In other parts of Europe that is not possible. The British had gone over to a form of multiculturalism that was not working: you don’t try to assimilate these populations, you simply let them live in their own communities and have their own schools and I think that’s why a lot of jihadism has come out of Britain. They did not make an effort to assimilate people into a common culture like the French do. There is no common answer for all of Europe.

Looking at our two European crises, the sovereign- debt and refugee/immigration, what do you think is the future of the European integration, and indeed of the EU as such?

I am pessimistic right now. The crises have really driven Europeans much further apart. The belief in the strength of the Union is just not what it was before the crisis started.

What’s the way out of the mess?

I think the Germans could have shown the way out by making long-term changes to the common fiscal rules in return for helping Greece in the short run. But they have not been willing to exercise that kind of leadership.

Do you believe that the common currency is sustainable?

No, I don’t believe that, not without a fiscal union. You will just keep running into the same kind of problem. It’s what everybody said at the time the euro was adopted, that it was the invitation to instability. And that problem has not been fixed yet.

Europe is weakened and some observers say that America’s standing in the world, too, is diminishing. Is America in decline?

There is no question that the relative power balance has shifted. It’s really China above all that is going to affect it. But now America is doing pretty well economically. I don’t believe in any long-term decline. The US is one of the few OECD countries that have relatively low unemployment and pretty good growth. We are doing OK It is our political system that is dysfunctional, like our inability to come with a rational budget year after year. We could exercise our power around the world in a more effective way if we were better organized.

Where is China heading?

China is going to be a big authoritarian monster. The thing we don’t know about China is whether they can maintain their growth with the authoritarian system they have. There is a body of theory saying that is not possible, that you need political freedom in the long run to promote economic freedom, innovation and growth. That’s just theory. We don’t know, and China has proven to be much more capable and stable than people imagined 20 years ago. I don’t think it’s a good thing to bet against China. One thing we don’t know is, what’s going to happen with China in a real economic crisis, a setback, because they have not even experienced a recession since 1978.

In that regard what should be the West’s and especially American policy towards China?

The first element of policy should be to get our own act together. We have recovered a lot of the economic vitality lost during the crisis. We need to stop politically the stupid partisan infighting in Washington that’s beginning to creep into aspects of our foreign policy as well. In certain areas we need to cooperate with China. The US effort to stop the Asian Infrastructure Bank is just stupid. We should have joined right in the beginning. It’s actually a way of influencing them and dealing with developing countries, getting them to act according to certain standards. On the South China Sea and the territorial disputes we have a real problem. It is clear that the Chinese want to assert a kind of regional hegemony and that will come at the expense of our friends and allies. We need to provide political support to these friends.

Anything more than political support?

This gets pretty complicated. Imagine a world 25 years from now when the absolute size of the Chinese economy is substantially larger than the United States and you ask yourself, is it conceivable that the US will still be playing the dominant military position in the Pacific? It is hard to see that happening. Certainly in the short run there are things we can do to shore up our position there. So yes, I do think there is a military component to this, but in that sense we will not be able to fully balance China.

You have endorsed Barack Obama. How would you assess his Presidency?

Well, there are different parts to a legacy. So probably the most important will be the health care law, the Obamacare, which was a really significant achievement. It drove the Republicans crazy, but I do not think they will be able to repeal that. Health insurance is becoming more and more an expectation that people will have. I think the process by which you got to the bill was very problematic and the bill itself, the way the law was crafted has got a lot of problems, but those are things that can be fixed down the road. In foreign policy I think he has been a disappointment, but I also think that he reflects a lot of the feeling of the American people. After two big wars in the Middle East nobody is really eager to jump in again. His instincts in foreign policy—more in the second term than the first—are not all that sound. He could have reacted more strongly to many of the events that happened in Ukraine and the Middle East.

Do you mean mostly rhetorical strength, or do you envision some sort of military action in Syria for example?

Each one of those is a separate question. I really don’t see how we could have intervened helpfully in Syria. To this day I think that conflict is very complex and the goal of driving Assad out power right now is in a way crazy. Unless you can explain how you are going to re-establish some authority in that big power vacuum, I don’t think anyone should talk about military intervention. This is the point that a lot of the Republicans haven’t absorbed about the experience of Iraq and Afghanistan, which is that the big problem is the state-building problem. You need to be able to establish a state authority in areas where you have a collapsed state like Iraq, like Afghanistan. And despite all the billions of dollars we have spent, and hundreds of thousands of troops deployed, neither of those countries has a real state that can exert authority and protect its territory. So the president who claims that if we don’t know how to do this we shouldn’t get involved in the first place, asserts a basically correct policy.

What then should he have done differently on Ukraine?

On Ukraine, I am all in favor of providing military assistance to Ukraine. The issue there is not a collapsed state, it is an aggression by a very well organized one. That is something much more familiar and one in which we could have exercised our power more strongly. At the same time, I don’t think that supporting Ukraine militarily is the main solution to that problem. The main problem is Ukrainian economy and there I think the US and Europe as a whole ought to have been much more supportive, raising the funds making Ukraine a viable place, but I do think military support could have been a part of that picture that would have raised the cost to Putin and the Russians.

That is a sound assessment, but how do you fix a corrupt, disintegrating state as Ukraine was even during the reign of so-called reformers like Yushchenko and Tymoshenko?

Well, that is really the main subject of the work I have been doing for the last few years. We, especially Americans, when we think of democracy, we mostly think in terms of constraints on the state: protecting individual rights and limiting state power. We don’t think adequately about how to build state authority and power in a democracy in order to actually be able to govern itself properly. So after the Orange Revolution when Yushchenko first came to power, at that moment most Americans breathed a sigh of relief. They said, OK the job is done, and did not pay any attention to helping that government actually govern. And you immediately had this bickering between Tymoshenko and Yushchenko and nothing was done about the corruption problem. One of the things I have been personally involved in since the Maidan uprising was trying to persuade many of the civil society activists that I know in Ukraine to leave civil society and actually go into the government. In fact a number of them have done that, like Serhiy Leshchenko and Mustafa Nayem. In my view you can’t fix a government unless it actually has new people who are not corrupt, want to reform it and try to do that from the inside. They obviously face huge opposition in doing that, but that is the transition that did not happen in 2004.

Is Russia under Putin what you call a neopatrimonial state?

Definitely. Putin has created no institutions. He started out with the group of KGB colleagues when he was in Germany in the 1980s and they all went to St. Petersburg and then they all moved to Moscow. Igor Sechin, Yakunin, and all these guys are part of that network. His regime is based on personal connections. That is why there is a lot of danger for Russia. If he gets run over by a bus tomorrow, there is no institutional structure that is going to survive. And there will be a big fight among all his lieutenants for pieces of this mafia organization that he has created.

What should the US and Europe do about it? Are we doing the right thing?

No, as I said, we could have done much more to support Ukraine. I felt for a long time, ever since the Georgia war, that we ought to revive NATO as a serious military alliance. In the 1990s and early 2000s NATO became a little bit like the democracy- promotion political organization, involved in Afghanistan and all of the out-of-area operations. The Article 5—a core of the alliance, which is a military alliance to support each other in the event of an attack, had eroded. NATO stopped doing military exercises, there are no forward-deployed troops, and even the command-post exercises were really stopped. Now that has begun to be reversed and it is a good thing. NATO ought to be taken seriously. We ought to figure out how to get Finland and Sweden into NATO. That would be the appropriate response to all the stuff that the Russians are doing in the Baltics.

In fact in the Czech Republic and Poland that have been much more successful than Ukraine, corruption still is a huge problem that delegitimizes democracy. We have new populists who sometimes are billionaires in power taking advantage of the corruption issue. But let me continue on the subject of Obama and his assessment. What do you think about the deal he has struck with Iran?

I am in favor of it. I think that Iran is very close to getting a nuclear weapon one way or another. I don’t know whether they are actually going to live up to the terms of the deal. However, given their internal politics there is a substantial part of the country that would actually try to re-integrate itself with normal outside world. Certainly the population is divided between the conservatives and the much more Western-oriented urban middle class. That is ultimately the only hope for Iran as that middle class will eventually come to power. It seems to me that the deal will at least delay their attempt to get the weapon. The only honest alternative to signing the deal is a military action, which I don’t think is going to work terribly well. The idea that we could maintain the sanctions and even increase them is just a fantasy. The Chinese and the Russians will walk away the moment we walk away and the whole sanctions regime is going to erode, so we might as well try it. It may not work, but we might as well try it.

So the deal is the least bad of bad options?

Yes and the same is true for North Korea. People pretend that there is a solution, that only if we are decisive and tough enough are we going to get either of these countries to drop their nuclear program, and I just don’t think that’s possible.

Iran may be the only country in the Middle East, in which the middle class and young people are pro-American and pro-Western. Is it something to work with?

Oh, it is definitely. As I said, the only hope for dealing with the larger Iran problem is the internal political change. That possibility came to the forefront during the Green Revolution, it was quashed, but the demographics suggest that over time and especially if Iran re-integrates with the rest of the world, that middle class is going to get larger, and they may actually change the regime from within.

In the Middle East there is basically a Sunni/ Shia civil war going on. It is led by Iran and Saudi Arabia through series of proxies, but most of the fighting is not done by them, it is done by various communities on the ground. And I just think that the United States ought to have a policy of containment to prevent it from spilling over and affecting us, but fundamentally we don’t have a stake on one side or the other. Actually, we have a stake to balance between the two. That ought to be the goal of our policy in the region.

That indeed is your well-known argument of offshore balancing. Czech President Miloš Zeman criticizes Western policy towards radical Islam. He sees the Islamic State as threatening us directly and compares them to the Nazis. He implies a Munich agreement analogy in trying to oppose what he considers to be an appeasement of aggressor. Obviously, you disagree. When you advocate offshore balancing, doesn’t that imply that you do not see the IS as a real threat to the West?

No. Well, it is not an existential threat.

Like the Soviet Union was.

Yes. The Nazi Germany, or Russia vis-a-vis Poland and the Baltic States, is a true existential threat. They can invade their neighbors and take over their territory. The Islamic State claims to be a state but they have yet to prove that they can establish real state authority over anything other than supply corridors. They are in a very bad part of the world. They have relatively few friends to support them, and they are mainly threat to other sectarian communities in the region. They are a threat to the West because they are able to attract young men without jobs…

…and without girlfriends…

Yes. But it is not an existential issue. It is more like an international criminal activity rather than a traditional security threat. I just feel that ever since September 11 we have overestimated the true danger of these threats. They are dangerous and we have to respond to them, but the bigger danger lies in our overreacting to them.

Or, maybe, in misapplying historical lessons and analogies? Like using the Munich Conference analogy? You have criticized the neoconservatives in 2003 for doing exactly that. But when do we know that a historical analogy is a good one?

The truth is, we do not. The trouble with historical analogies is that history never repeats itself. Everybody uses them, trying to interpret and understand the world, but in fact every circumstance is different. For example: what is ironic in comparing Iran or ISIS to Nazi Germany is that the same mistake was made by Anthony Eden in 1956 justifying the Suez intervention, by saying that Nasser of Egypt was a Hitler. It ended up in a big debacle. The fact to the matter is that sometimes appeasement works. A nicer word than appeasement is engagement and negotiation. We have an opposing power that has interests different from yours but you work out a way of living with them. It does not work with some people. Some argue it will not work with Iran because they are driven by religious fanaticism, but the way I read the Iranian foreign policy since 1979 is, they have a religious ideology yet in practice they are extremely cautious. They don’t use their power in the way that would threaten the core national interest. As long as that is the case it seems to me you can actually do a deal with them.

Well, they do support Hizballah and other terrorist groups.

That part of Lebanon has a great historical significance for the Iranians, and they are allies for them. It is not like ISIS, that they would support anybody who would blow themselves up and kill Westerners. They are very interested in supporting very specific Shiite communities especially around the Gulf, and beyond that they are not going to do anything that is going to provoke retaliation against their national interest. Even if they get a nuclear weapon, which I am not eager to see happen, but even if that happens, they will be deterred by an Israeli nuclear weapon just the way Russia and China were deterred by American nuclear weapons.

You once wrote that the Islamist groups ought eventually to be brought into the political process…

It depends on whom. Groups like ISIS will not…

Well, what about Hamas?

Hamas is complicated. They reflect an important part of a Palestinian opinion and they are not going away. But negotiating with them is not going to get you very far because their demands will not be negotiable in a lot of respects. That is not going to be a good strategy. What they are trying to do, negotiating through the Palestinian Authority, is about as good a negotiating partner as you are going to get. But I would not exclude the possibility that Hamas over time will get to a point when they feel they’ve got to do a deal.

Sort of like the Irish Republican Army?

Eventually. These groups evolve over time.

What lessons have we learned since the great financial crisis since 2008? Are there any serious lessons for capitalism itself?

The main lesson is that the financial sector is different from the real economy and that a lot of the free-market principles that apply in trade, or with a corporation like the General Electric or General Motors that makes things, is different from the big Wall Street banks, because the financial sector can impose costs on the rest of the economy through systemic failure that a large industrial corporation simply cannot. Which has always been the reason they have been more tightly regulated. There was a period in the late 1990s when the free-market principles were applied in the wrong places. The whole system for regulating banks, capital, and prudential oversight over the capital leverage and risk-taking was relaxed. As a result we had a crisis and the costs to everybody were very high. It is very important to re-regulate that sector. To this day I don’t think we’ve done it adequately, but it’s better than it was in 2008.

As the economy becomes increasingly more dependent on sophisticated software and certain middle-class jobs get displaced, what is your view of the prospects for our economy?

It is a big problem. The inequality has been driven by technology. It is easier to replace a low-skilled and medium-skilled worker than a high-skilled one. That’s been the fundamental cause of the decline of the middle class. It is also about the ever-increasing educational requirements for getting an employment of any sort. I have no solution for this.

Jaron Lanier dubs the companies based on supercomputers, the corporations like Amazon or Google, as Siren Servers, according to Homer’s Sirens. Some dismiss his argument as neo-Luddite. They say eventually the economy will correct itself, like it did after the Luddite rebellions in England.

That is an article of faith. It may happen, or it may not. I would think that the logic of information technology is that it threatens lower-skilled occupations much more than the high-skilled ones, which involve complex judgment. So I think the process will continue. Lanier’s critique is also that we have allowed ourselves to be seduced by technology and basically give away our privacy in exchange for free apps. I am quite shocked at the degree to which Americans are perfectly happy with—or complacent of—the fact that Google knows everything about you.

“We let you snoop on us in exchange for free candy”—that kind of attitude? In your book on Latin America, you have zeroed-in on the unequal distribution of wealth as a cause of many social and political problems. Isn’t that something also coming our way?

Sure, Latin America is a good warning. In fact it is disturbing, the degree to which American politics is beginning to resemble Latin American politics in a certain sense.

In terms of fragmentation?

In terms of populism and attitudes towards the state. In Latin America, because of the high degree of economic inequality, the politics have always been polarized between a relatively well- to-do elite and relatively small middle class on the one hand, and then a lot of poor people. That’s what produces Hugo Chávez and Rafael Correa, Evo Morales, Cristina Fernandez and all these populist politicians. Some states in Latin America have for the first time in the 1990s and 2000s begun to develop more like European countries with a center-right and center-left without the sharp polarization, at least that’s where Chile and Brazil have been slowly moving. The danger in the US and to some extent in Europe is that if inequality gets more deeply entrenched, then you get populist politicians calling for really stupid policies that will in the end hurt economic growth.

Someone like Donald Trump? Or is he a special case?

I don’t take him seriously as a politician so I am not quite sure what he represents. There is obviously a lot of anger among middle class Americans because the erosion of manufacturing jobs and other kind of job loss has been pretty relentless over the last 30 years. Part of it gets expressed in organized labor movement, but part of it gets expressed as right-wing populism because in the US many working-class whites vote Republican. They don’t vote for the traditional left-wing parties. The anger comes from the same source, which is the economic insecurity.

How does the media fragmentation associated with digital communication enter the picture? Is it a consequence of economic polarization?

It’s a consequence of technology driven by marketization of media. Media companies of the 19th and 20th centuries were family-owned. They were not necessarily interested in maximizing profits. They had a civic sense that media have to play a certain role in the community. That has all been displaced by corporatization of media. But I don’t think it is the main problem. With all the channels to communicate, they communicate with relatively small groups. They can tell themselves things that other people don’t believe, but it’s nice to be with people who think exactly like you. The compartmentalization of the media has really been what has eroded a broader sense of national community.

That is one side of the coin of information society, which, on the other hand makes available an unimaginable amount of information. Is the democratizing of information good or bad for democracy?

It is an ongoing struggle. It was very common in the 1990s for people to think that the information revolution would be good for democracy everywhere, because it gives the people access to information and therefore power. That’s been true, but authoritarian governments in the meantime learned how to master the same technology. So China is very successful at censoring the Internet and preventing people from using it to take collective action, protest… And the Russians are heading in the same direction.

Have you followed the latest doping scandal in track-and-field athletics? I am talking about blood doping. But the next logical step clearly is…

…genetic doping.

Clearly. Isn’t that close to what you have criticized in one of your books? Your argument against trans-humanism: Are we finally getting there?

(smiles) I think it’s happened one way or another. Biomedicine ought to be used for therapeutic purposes, to cure diseases and help people who are suffering, but the same technology can be used to enhance people. It’s going to happen. I actually think it’s going to happen in Asia first.

Why?

The moral system in Asia simply doesn’t have the same kinds of inhibitions about experimentation on human beings. The concept of human dignity deeply embedded in Christianity has been the source of resistance to manipulating the human essence. You don’t want to threaten that essence by enhancing it. Whereas in Asia they just don’t have that concept in the same respect and they have the technological ability to do that. There have been reports that the Chinese have successfully manipulated the germ line, which most European and American labs would be very reluctant to do.

Are you skeptical about our ability to safeguard against altering our essence?

You are not going to be able to prevent everybody from doing things that are morally questionable, but you can change the incentives for people so you get less of it. So I do think we can control it. In this country it is very hard because of the whole debate about abortion and the status of the embryo.