Political Economy of International Crisis

Economics 357L

Section II


This section begins with an initial examination of the structure of foreign policy making. In as much as international decision-making is generally carried out by nation states, wether working together or at odds, either through alliance, conflict or international institutions, the behavior of those states in the international arena can only be understood by examining the particular processes through which they arrive at the positions which they carry to international discussions. Obviously, those vprocesses vary enormously, from country to country and we cannot examine them all. Therefore, we will focus on the United States and the institutions, persons and processes which play the major roles in foreign policy formulation and implementation.

Then, we will look at the upheavals in diplomacy that have accompanied the onset and development of the crisis, from the split between Nixon/Kissinger and the Foreign Affairs Establishment through Carter's Trilateral foreign policy to the Byzantine problems of Reagan and Bush foreign policy. We will discuss the dual aspect of diplomacy: first, what is normally called "diplomacy" -the formal and informal, overt and covert negotiations among nation states for the resolution of interstate conflicts- (processes that almost never formally includes the citizenry of the countries concerned but is carried on by a small elite, mostly operating out of the public eye) and second, what we might call "internal diplomacy" that is to say an informal negotiation between that elite and its own citizenry. Failures of such diplomacy, failures in the "selling" of foreign policy at home, have led to fundamental political crises in various societies, including the United States. The most important example in the post-World War II era, of course, was that of the Vietnam War. The failure of internal diplomacy resulted in massive upheaval at home that undercut foreign policy abroad and contributed to the collapse of the Keynesian period as a whole. The "Vietnam Syndrome" of skepticism and opposition to foreign policy objectives and methods continued in the 1970s and 1980s probably preventing a number of cases of overt American intervention in various parts of the world (e.g. in Southern Africa in the 1970s, in Central America in the 1980s).

The conflicts over Vietnam policy worked their way from the streets into the intersanctums of the foreign policy making elite which became divided over how to get out of the quagmire and social trauma of the war. This led to Lyndon Johnsons resignation and subsequent conflicts between the elite and the Nixon administration whose foreign policies were being mannaged by Henry Kissinger. But the main attacks on Nixon/Kissinger were not based on fundamental disagreement with most of their policies. They originated in the growing isolation and hence inefficiencies of the administration's foreign policy making procedures and approaches to diplomacy, not only around the Vietnam War but also over relations with America's major allies, the Europeans and the Japanese. The diplomatic methods of the Nixon Administration were judged to be threatening the stability of the North Atlantic and North Pacific alliances. The attacks led to the creation of Foreign Policy magazine, the Trilateral Commission and Jimmy Carter's presidency.

During Carter's term in office members of the Trilateral Commission occupied most of the important positions in the State Department and other foreign policy wings of his administration. Despite their critiques of Nixon/Kissinger diplomacy, this new group failed to mend the rifts that had been opened in American relations with its allies and the Third World.

The Reagan Administration repeated some of the unilateralist errors of the Nixon/Kissinger period as well as inventing new ones of its own; partly, as Authur Schlesinger suggests in one of the articles listed below, because its ideological blinders prevented it from recognizing options, partly because of chronic internal discord and infighting within the administration and partly because of a preference for force over diplomacy among many in the administration concerned with foreign affairs. Unlike the Nixon/ Kissinger period, however, the Reagan Administration could draw systematically on a newly constituted "counter-establishment" of Right-wing thinktanks and policy critics. The most dramatic element of Reagan Administration foreign policy making, of course, was the way it circumvented its failure to gain congressional support for its war against Nicaragua by constituting a secret government -whose discovery led to the Irangate scandal and a further delegitimization of the executive branch in the eyes of many citizens.

The Bush Administration’s early foreign diplomatic efforts benefited enormously from the Revolutions of 1989-1990 which were neither of its making nor within its control. Despite the way in which that series of events belied every Right-wing prognostication (e.g., those of Jeanne Kirkpatrick) about the impossibility of change within the communist block, the administration adapted to the new "post-cold war period" by developing new relations with the Soviet Union and the excommunist countries of Eastern Europe -largely by supporting Gorbachev's policies of glasnost and peristroika.

In other parts of the world, especially the Middle East, the Bush Administration, like its predecessors, contributed little or nothing to the resolution of the region’s problems and tensions. American support for the Iraqis in their war with Iran contributed to the stalemate of that situation but did nothing to resolve the long standing Palestinian problem which accentuated with the explosion of the Intifada and a decided shift to the hard-line right in Israeli internal politics.

In the wake of the Iraqi invasion of Kuwait in August 1990, the Administration achieved remarkable diplomatic success by forming an anti-Iraqi coallition through the U.N. (especially one that included several Arab countries) and then leading that coallition into the war against Iraq with support from Congress - something the U.S. had not been able to do since the Korean war in the 1950s. On the other hand, its ability to gain support abroad among foreign ruling elites through intimidation (threatening the cut-off of aid) or payoffs (canceling debt or promising more aid) was not replicated at the popular level either at home or abroad, prior to the war. Its refusal to negotiate a settlement with Iraq and its failure to convince vast numbers of the need for war led to the emergence of a world-wide anti-war movement even before the war started. In comparison, in the case of the Vietnam War it took years before such a movement mobilized to the same level of opposition -a mobilization which, it will be remembered, provoked tremendous internal instability in many countries and brought about both an end to the war and a political-military defeat of the U.S. In the case of the Persian Gulf, the much more rapid mobilization provoked a military strategy designed to achieve quick victory that minimized American deaths (air bombardment), slaughtered Iraqi draftees in Kuwait, destroyed Iraqi social infrastructure causing widespread civilian deaths and left Saddam Husein in power. The creation and maintinance of a U.N. blockade and of no-fly zones in Northern and Southern Iraq provided the rationale for sustaining the long-desired American policy objective of a continuing military presence throughout the Persian Gulf area.

The Clinton Administration has, to a considerable degree, followed in the steps of its predecessor. The Administration backed the air strikes against Iraq ordered by President Bush in his last days and gives every indication of persuing similar policies in the Middle East. Clinton also successfully continued the Bush push for a new GTT accord and for NAFTA. As Bush backed Gorbachev, so Clinton has backed Yeltsin in the internal conflicts of Russia -but not without growing criticism. Therefore analysis of the Bush record is of immediate interest in assessing the future of Clinton policy. Our examination of the backround and politics of the Persian Gulf War will continue, and deepen, in the subsequent section on the "energy crisis".