Transatlantic Values in an Era of International Upheaval

(Adapted from remarks upon acceptance of the Lifetime Achievement Award at the Verbandes Deutscher Zeitschriftenverleger Publisher's Night in Berlin.)

Five years after my family left Fürth for New York, I returned to Germany with the American army. Afterwards as a student and then as a professor, I had the opportunity to reflect on questions of European order and Germany’s future, and subsequently in public service, I was able to work on issues to which the future of Germany, and the ties of friendship and cooperation between Germany and the United States, were central. In that context, Germany has never ceased being a part of my life.

These words are written at a time of upheavals of unprecedented scope. Europe is altering the notion of sovereignty that it first promulgated and on which its history has been based. The United States is seeking to revitalize its economy while reassessing its world role. The Islamic world is rent by ideological conflicts comparable to those of Europe in the 17th century. Russia is reinventing its domestic politics and its ties with the former Soviet world while it is torn between its historic patterns and its contemporary necessities. Two of the world’s main classical civilizations, China and India, are emerging as modern great powers. With this, the center of gravity of international affairs is shifting from the Atlantic to the Pacific and Indian Oceans.

Two major changes dominate the present world: first, the shift from a focus on foreign dangers to the risks produced by the international system itself; and secondly, the challenge this poses for domestic governance. For the generation following the Second World War, security was the dominant problem. With hostile armies facing each other across a divided continent, international order was identified in large part with military deployments and the security guarantees of the United States. Atlantic unity was a necessity; the German-American relationship was its anchor.

The challenges of our world are more ambiguous. The international economic system has become global, but the political structure has remained essentially national. The global economic structure is predicated on removing obstacles to the flow of goods and capital. The international political system is still largely based on the nation state. Globalization facilitates and encourages decisions based on comparative advantage; in its essence, it ignores national frontiers. Both systems have a plausible claim to represent the popular will, one on a global and the other on a national level. The winners, of course, have few reservations. But the losers will seek their remedies within a national political system by solutions which negate, or at least obstruct, the functioning of the global system.

This dynamic has produced decades of sustained economic growth alternating with periodic financial crises of seemingly escalating intensity: in Latin America in the 1980s; in Asia in 1997; in Russia in 1998; in the United States in 2001, and then again starting in 2007; in Europe in the current period.

While each of those crises has had a different cause, their common feature has been profligate speculation and systemic underappreciation of risk. Aided by the Internet, the role of speculative capital has magnified. With nimbleness as its essential attribute, it has often turned upswings into bubbles and downward cycles into crises, in part by the invention of financial instruments that obscure the nature of financial transactions. Lenders have found it difficult to estimate the extent of their commitments, and the borrowers to understand the implications of their indebtedness.

The global international system thus faces a paradox: its prosperity is dependent on the success of globalization, but the process produces a political dialectic that often works counter to its aspirations. The economic managers of globalization have few occasions to manage its political processes. The managers of the political processes have few incentives to risk their domestic support on anticipating economic or financial problems whose complexity eludes the understanding of all but the expertly trained. When the crisis occurs, it is often too late to close this gap.

In these conditions, the challenge becomes governance itself. Governments are subjected to pressures seeking to tip the process of globalization in the direction of national advantage or mercantilism. They face the reality that increased productivity enhances well-being but also substitutes technology for manual labor. Congenital unemployment can result, or else the devolution of manual-labor jobs to workers from cultures prepared to work for lower wages – inviting a clash of cultures or a nationalist reaction. The European debate over Greek debt exhibits many of these reactions.

In the West, the challenge of globalization thus merges with a challenge to the nature of democracy. Many problems are better understood than executed because governments are reluctant to challenge the interest groups, threatened by their insights. For the issues are technically extremely complex, thus tempting politicization, complicating serious debate.

Recent American legislation encompassed thousands of pages of detail beyond the capacity of the individual citizen to grasp or, for that matter, even to read. Executives who called on their legislators in order to learn their interpretation of laws they have recently passed occasionally found themselves referred to administrative assistants because the lawmaker himself was uncertain of the bill’s precise implications. In such an environment, information often overwhelms context; facts are more plentiful than ever, but their relevance is often elusive. How to translate information into knowledge is a key challenge facing the generation of today.

The erosion of national sovereignty compounds the challenge for the European democracies. The willingness to sacrifice for the common purpose has dissipated to some extent amidst the carnage of the two World Wars and the gradual growth of European institutions. The European Union has become the repository of technical functions but not yet of the emotional commitment of the historic European states.

Thus the deepest challenge, especially of Western societies, is to achieve perspective on the issues that obtrude themselves, to define their nature and to devise solutions which the bureaucracy can execute and which the public can understand.

In this effort, the media play an essential role – especially now in the age of the Internet. The hardest task for a society is to move from where it is to where it has never been. This requires a coherent vision. But the temptation of the Internet is to learn by fragments. Each individual fact can be evoked separately. It needs neither to be memorized nor internalized because it can always be reinvoked. The Internet supplies information but no context. This is where the media can fill a gap.

Behind all of these challenges lies the essential question of how we will respond, as members of a common Western moral and intellectual tradition. For decades Western unity was a fundamental component of world order. Now, however, our policymakers and economic elites are engaged with global issues where a common Western perspective, while no less important, may not be as readily discernible.

The question is how, in this environment, the United States and Europe will relate to the rise of Asia and the dislocations of globalization. Will we do so, once more, as partners in a common destiny informed by shared traditions? Or will we enter an era where we act as competitors in a borderless world of nations vying for economic advantage on essentially impersonal and mathematical terms?

Let me end on a note of hope. When I first saw this city, very few buildings were standing; the parks had been denuded of trees for firewood; food was extremely short. Then there was the airlift; then the Wall. For anyone who has lived through that period, the present cannot seem insurmountable.

We also need to remember that our present dilemmas are the product of great achievements over the past half-century, in science and technology, in standard of living and in the spread of democracy. We no longer face a common adversary. But the issues as I have sketched them cannot be solved by individual nations. They call for common efforts and merged hopes, some global, some regional and, I believe, also Atlantic.