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Niall Ferguson: A new grand strategy for America

This is the transcript of an interview conducted with Professor Niall Ferguson. This interview is part of The Daily’s “Ideas of an International Order” series, running April 27-30, 2014, which explores the potential for evolving and contrasting concepts of an international system in the 21st century and what America can or should do in response.

Where is the international order going?

When people talk about the international order, they’re usually conflating two or three different things. Number one, the order that was devised at the end of WWII that we associate with the United Nations. Two, a set of economic arrangements around about the same time—Bretton Woods and the associated financial institutions like the International Monetary Fund (IMF) and World Bank. And then three, the institutions and alliances that evolved over the course of the Cold War somewhat later. And so it’s hard to use a term like “the international order” for something which is multidimensional and evolving.

The first thing, I think, to notice, is that a massive economic shift in the balance of power is happening and has been happening not only throughout your life but [in fact throughout] my life. And that has rendered some of the international architecture of the post-1945 period obviously anachronistic. I think that’s the biggest challenge to the international system. It’s not that China wants to challenge the United States in some kind of Thucydides-type contest. It’s more that because of its growth—because of its growing dependence on imported energy—China has to be a more powerful state in terms of military and naval capability. That’s not some kind of violation of the international order; that is a real consequence of China’s growth.

The second point I’d make is that the financial order that we live in is unrecognizably different from what John Maynard Keynes and Harry Dexter White had in mind at Bretton Woods. Bretton Woods fell apart in the early 1970s. The international financial system exploded in size as capital flows were deregulated, and we now live in a completely different financial world order, [one] which very nearly blew up just six years ago and is in the process of being reassembled. But that process isn’t over because the regulatory innovations in Europe and the U.S. still are a work in progress.

And finally, I think that the military alliance system the U.S. built up in the Cold War is falling apart because the United States no longer looks like a credible hegemon, at least under this President. And that’s the other development of recent years. The U.S. has lost its credibility as an alliance leader, whether you look at Europe or the Middle East or East Asia.

What exactly does the recent Ukraine crisis and some of the other Russian interventions preceding it represent: a return to normalcy, or some completely different type of action?

It was very unfortunate that President Obama said in January that he didn’t need a George Kennan, because almost immediately it became clear that he did. He and his advisors did not read Putin right and they got themselves into a very weak position. I think most strikingly, an international agreement to uphold the sovereignty of the Ukraine from the 1990s was violated with no military downside, only financial. The annexation of Crimea has been achieved by Russia at tolerable cost.

So what one has to recognize is that this is a pretty bad precedent, but I think it’s part of an ongoing process of American strategic failure that goes back to Syria and maybe back to the Arab Spring’s outbreak. Although Crimea doesn’t look like it’s of enormous importance to the United States as we sit here in Stanford, it’s important because it signals that, as in Syria, you can use military force in defiance of the United States and get away with it. And that’s the thing that’s concerning to me—this is a clear encouragement to other regimes to try the same approach.

Is that the fault of the President or the political concerns surrounding the President?

The public mood is strongly against international intervention. If one looks at polls, we haven’t seen this lack of interest in the rest of the world since before World War II. It’s not quite Isolationism 2.0, but it’s kind of getting that way. And I think that the President, to some degree, has reflected that public mood.

I think he’s not in that sense an isolated figure–on the contrary, I think there’s a substantial part of the political establishment, of both the left and the right, that is inclined to reduce America’s commitment overseas. It’s only really John McCain who appears on primetime television arguing for intervention in Syria or Ukraine.

So I don’t think the President’s on his own here. I think he’s channeling both the public mood and an elite mood, which isn’t uniquely Democratic–I think Republicans are probably just as inclined to disengage from global problems.

So what do you think the United States should be doing in terms of grand strategy and also in terms of policy-defining what it’s planning to do in order to ensure some kind of stability and to secure the future of its institutions?

Well, first of all, I think having a grand strategy would be a good idea, rather than just improvising in response to fiscal and domestic political pressures. I would like to see a much higher caliber of person helping the President to formulate that strategy, with a mandate really to think about what the rise of China means for U.S. foreign policy and indeed for the U.S. alliance system, which in Asia looks increasingly anachronistic.

I think the U.S. needs, when it assesses its predicament, to recognize that, although in relative terms it may not be as powerful as it was in 1945 or 1950, in other respects it’s more powerful, because there is no antagonist as hostile and dangerous as the Soviet Union was then. In many ways, America’s enemies and rivals are weak. Russia is not a superpower. And China is so preoccupied with its internal problems that, as I said, its challenge is not really one that is very conscious or aggressive.

So I think there are options open to the U.S., which still enjoys tremendous leadership in energy and information technology. It just requires some thought about priorities, and some recognition that the institutions we began by talking about are looking somewhat dated and certainly aren’t appropriate to a world in which, by at least one measure, China is now the largest economy, or a world in which Russia is a much reduced threat to the independence of Western Europe.

What I would argue is for some more serious reflection on grand strategy, and that’s something the President has been disinclined to do. So maybe he does need George Kennan or somebody like George Kennan to help him think about these problems. They’re not easy, and one of the mistakes that people sometimes make at elite universities is to think that international relations is easier than, say, economics or computer science. Actually, it’s way more difficult, because it’s not actually possible to model the processes that we’re talking about, and you have to have some real historical understanding to make sense of the challenges that the U.S. currently faces in Europe, the Middle East or the Far East. These are historically informed decisions that have to be taken and they need historically informed people to take them.


Niall Ferguson is a senior fellow at the Hoover Institution at Stanford University and the Tisch Professor of History at Harvard University. His latest book, The Great Degeneration: How Institutions Decay and Economies Die, was published in 2013. He is currently working on the authorized biography of Henry Kissinger.

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Winston Shi

Winston Shi

Winston Shi was the Managing Editor of Opinions for Volume 245 (February-June 2014). He also served as an opinions and sports columnist, a senior staff writer, and a member of the Editorial Board. A native of Thousand Oaks, California (the one place on the planet with better weather than Stanford), he graduated from Stanford in June 2016 with bachelor's and master's degrees in history. He is currently attending law school, where he preaches the greatness of Stanford football to anybody who will listen, and other people who won't.