The author is a contributing editor to the FT and writes the Chartbook newsletter
The United States is not eager for a war with China. This is the important message spokesman for the Biden administration they were send in the last weeks. The fact that this needs to be said tells you something about the state we are in. In Washington today, it may seem that war is just over the horizon. Maybe as soon as 2025.
It has become a cliché that the only thing America’s divided democracy can agree on is anti-China policy. But if the dogs of war are in full cry, what is worth noting is the dog that no longer barks. The “peace interest” anchored in US big business’s investment and trade links with China has been pushed from center stage. Central to US strategy, big business has less influence today than at any point since the end of the Cold War.
The idea of a “peace interest” – a transnational social and economic constituency opposed to war – was coined by economist and social theorist Karl Polanyi, who used it to explain the long era of peace between the great powers in Europe between 1815 and 1914. the composition of the peace interest can change. After the shock of the French Revolution and Napoleon, it was the conservative dynasties of Europe who opposed the war. From the mid-19th century, he was a bourgeois advocate of free trade.
Of course, not all big business is interested in peace. Military spending is an easy source of profit. Throughout history, commercial interests have propelled imperial conquest and cemented international alliances. The commercial interest in peaceful globalization must be organized if it is to be influential.
The first attempt to do this deliberately was made after the First World War. American financial interests, led by JPMorgan, hoped to pacify Europe and East Asia with dollar diplomacy. That thin web of stability was torn apart by the Depression of the 1930s.
During the Cold War, the disruption of economic and trade relations by the Iron Curtain meant that the peace interest operated primarily within the Western Bloc, particularly in promoting European integration.
Beginning in the 1970s, business interests began to extend beyond the Iron Curtain and really became ascendant in US relations with China from the 1990s onwards. Hank Paulson, former CEO of Goldman Sachs, appointed Treasury Secretary by President George W. Bush precisely to manage strategic relations with China, personified the interest in peace. Today, a figure like Paulson would be an embarrassment to the Biden administration.
Of course, Western business in China continues on a massive scale. But the globalized political coalition of the 1990s and early 2000s collapsed under the weight of its own contradictions. In recent weeks, the Biden administration has buried neoliberalism and declared a new Washington consensus. National industrial policy is all the rage. National Security Advisor Jake Sullivan boasts that it’s not his job to defend the interests of American investors in China. As a result, multibillion-dollar investments in China are hanging politically by a thread.
For the left in the United States, this is cause for celebration. The decline in corporate influence and the move away from globalization creates the space for an economic policy centered on the needs of American society. But what is the foreign policy accompanying this progressive domestic agenda?
The space vacated by the likes of Paulson has been filled by a president bent on reviving a Cold War-style alliance of democracies against the axis of autocracy. Meanwhile, the “blob” – the network of government agencies and think tanks that shape hard power in Washington DC – is free to pursue its hawkish agenda. Vladimir Putin’s war against Ukraine cements their grip.
The balance of influence can be read from the US federal budget. If over the next half-decade, spending on the Chips Act, the infrastructure bill and the Inflation Reduction Act matches the Annual defense budget of $886 billion be required by the Biden administration in 2024, we’ll be in luck.
This is how Beijing will judge speeches on Sino-US relations such as the one made recently by Treasury Secretary Janet Yellen. You have tried to draw the lines for healthy competition and cooperation, but you have left no doubt that national security trumps every other consideration in Washington today.
With escalation in the air, it would be futile to hope for a return to the old days of business hegemony. The era of the “Davos man” is over.
Since the question of war has been raised, a diplomatic effort at the highest level is needed. The first priority should be to defuse tension over Taiwan, as seemed expected after the Biden-Xi meeting at the G20 in Indonesia. Those hopes were dashed, however, by the gratuitous escalation of the Chinese “spy” balloon incident in February.
In the long run, an easing of tension requires something more fundamental: a new security order for East Asia based on the accommodation of China’s historic rise. That stating this self-evident truth in Washington today may be judged treasonous or unglobal is a measure of the danger we are in.
—————————————————-
Source link