Mrs. May must be even bolder to make Global Britain a free-trading success

“Fear not, we are of the nature of the lion.”

–Queen Elizabeth I

There was just enough in Theresa May’s speech today to reassure those who campaigned to leave the EU. Crucially, she made clear we are definitely leaving the Single Market and taking control of our borders. She suggested only a great deal would keep us in the Customs Union in some form, a highly unlikely event. Her tone – and such things matter – was forthright and constructive. Blessedly, we all know where she stands.

At one level, all she really did was confirm that we are going to be leaving the EU. But such has been the paranoia amongst eurosceptics about the prospect of some sort of excessive accommodation that just hearing we are going to be leaving will be enough to have Tory backbenchers cheering.

It was a speech long overdue. Having been almost completely silent on the EU as Prime Minister, May had well and truly lost control of the debate. Eurosceptics, dominant in the Tory Party, feared the worst and the media questioned whether she had meaningful plan. As such, despite addressing EU leaders, it was mostly a speech for a domestic audience – designed to assert control over the debate and to reassure Leave voters that she is on their side.

From that perspective, it was a job well done. But it is hard not to come away from the speech thinking that we should be further ahead by this point. When May took over back in the summer, some Leave campaigners were worried that, as a Remain supporter and someone who has spent relatively little time thinking about the future of Britain’s role in the EU and the world, she would not be well placed to help create a new role for Britain.

To be fair, the physical backdrop to the speech called for a “Global Britain”. And there were many points within the speech where she underlined her aspiration for Britain’s global role – not least in a very upbeat, internationally focused introduction. However, by this time in the process it is not good enough to merely speak in generalities, even if the Prime Minister’s impulses are clearly on the mark. It is time to talk about the specific, glittering geopolitical possibilities that can make May’s Global Britain a success.

While all the world is now to be now Britain’s oyster in terms of securing free trade deals, obviously some bilateral arrangements matter more to London than others. Indeed, in the media’s obsession about the terms of negotiations with the EU, a much larger strategic point has been almost entirely missed: the success or failure of Brexit will have far more to do with whether Britain can secure free trade deals with the Commonwealth countries (Australia, New Zealand, Canada), the US, India, and China, than whatever are the specific terms reached with the economic basket case that is the EU. That is where Britain’s Drakean, swashbuckling, energies must lie.

The great news (it is far better than good) is that the May government is pushing on an open door. Australia, New Zealand and critically Donald Trump’s America (once again the Project Fear establishment should never leave their day jobs and attempt to become actual foreign policy analysts) are itching to quickly negotiate and secure trade deals with the UK. As these three countries all have a solid record of growth–certainly compared with a becalmed EU—this is the first step toward Global Britain. But this is just the low-hanging fruit. The medium-term test is whether India and China (probably in that order) can also reach trade agreements with the UK. This is what the May government should actually be worrying about.

There is a further Holy Grail to attain if Brexit is to lead to a new Elizabethan Age: the Global Free Trade Alliance (GFTA). This proposed trading group would be a coalition of genuinely dynamic economies, voluntarily committed to pushing the free trade envelope. A legislative initiative rather than a trade deal, Parliament would offer GFTA members (chosen by neutral numerical criteria relating to their economy’s openness) access to the UK market with no tariffs, quotas, or other trade barriers, on the single condition they offer the same to the UK and the other members of the club. Such a radical move would over time do nothing less than remake both the UK and the world.

May gave a very solid speech which should encourage everyone that believes in a new, global future for Britain. She gave a speech that even five years ago would have been unimaginable. But we are where are and now is the time to think big. We look forward to hearing a detailed vision along these lines in the next few months.

Written with James Frayne and published in City AM London, January 7, 2017

Germany is not the answer to any serious strategic question

Given the nervous breakdown of America, epitomised by the election of know-nothing Donald Trump as President, it is altogether understandable and human that elites are desperately casting about for a new champion of western stability. There are precious few other candidates for the job, so largely by the process of elimination analysts (particularly on the left) have hit upon Chancellor Angela Merkel’s Germany as the last, best hope for the western order.

This would be a laughable thesis if people were not taking it seriously. For in truth, Germany cannot save either the wider world or Europe. In fact, it is an open question as to whether Germany can even save itself.

In her endless intellectual confusion over the basic fact that caution is not the same thing as wisdom, it is all too easy to point the finger of blame at Merkel for this. Yet Germany’s problems, and the weaknesses that spring from them, are far more systemic and deep-rooted. A simple look at the unholy trinity of crises facing Berlin—the endless euro crisis, the war in Ukraine, and the refugee crisis—makes it clear that Germany is more supplicant than driving force on the world stage.

More than the others, it is euro crisis that provides the analytical key to understanding overall German weakness. The basic problem is psychological and moral. In Europe, what is truly going on is the end of economic life as it has been known. Europeans simply can no longer afford the serene, cosseted, not overly strenuous and very attractive way of life they have grown used to; government in European countries has simply grown unaffordable.

Having bought into the cult of endless leisure time as an inalienable right, it is devilishly hard to row back from this primary sign of decadence. But almost no-one wants to hear this, much less do anything about it. To do so would require a very painful, immediate retrenchment for millions. That is human and understandable, but it is also fatal. For it means that at present democratic politics in Europe is being conducted based on lies.

And lying—beyond the immorality of it–is a very poor basis for making sustainable policy, at least in any open society. With its wilfully ignorant populace, Germany is the primary example of how stubborn self-delusion fuels member states’ approach to Europe.

In essence, to survive, the euro-zone will either move towards a true federation, becoming a debt union complete with fiscal transfers (all done on largely German terms) or the euro will cease to exist. As such, Berlin will be the primary paymaster for such a new political constellation. As none of this appeals to much of anyone in Germany, best not to talk about it. And so Chancellor Merkel does not.

It is at this point that even the sleepiest German citizen will wake up, howling. It is also here that not levelling with one’s own people becomes as poor a strategy as it is immoral. By not making clear what is really going on, Merkel has been able for quite a long while to put off an awful lot of unpleasantness. But to imagine for a moment that the German people won’t feel fundamentally lied to once the check for this Kafkaesque party comes due, is not to be Machiavellian. Rather, it is to be hopelessly naïve.

Whatever Germany ultimately decides to do, there will have to be sacrifices. And any policy requiring those sacrifices that is not buttressed by public support stands no chance of success. Lying as a way to avoid the democratic deficit over the European crisis is not clever.

Meanwhile, Germany, like doomed passengers on the Titanic, has spotted the economic iceberg dead ahead, but made precious little effort to right the ship of state’s course. The demographic problem is especially stark. The old age dependency ratio—which evaluates the number of pensioners in a society versus the working age population—simply cannot be wished away. The German ratio was 34% in 2013, rising to an economically crippling 52% by 2030. Over this period of time, the number of pensioners in Germany will skyrocket by 5 million, even as the number of workers declines by 6 million. Who is going to pay for those endless vacations and for the overly generous social safety net?

The inconvenient truth about Germany is that it is strategically pacifist (with laughable defence capabilities for a serious power), politically ostrich-like in its stubborn refusal to even attempt to master Europe’s many policy crises, and—worst of all—economically very much living on borrowed time.

For all these reasons, Germany is simply not the answer to any serious strategic question there is.

Published in City AM London, January 16, 2017

The thwarted greatness of Barack Obama on foreign policy

“No man is truly great who is great only in his lifetime. The test of greatness is the page of history.”

–William Hazlitt

It seems a million years ago that Barack Obama, then at the apogee of his fame, gave his address to half a million people in Berlin in 2008. Curious the see the phenomenon of Obama-mania, I was a drop of water in that ocean of people. What was most striking about being there was the mismatch between the somewhat anodyne nature of what was being said—the speech was staid, sober, reasonable but unspectacular—and the rock star adulation that greeted the speaker.

After the address was over, I bumped into an old Washington hand who I had known from my days in the capital who was now working for Obama. I said only half in jest, “There is simply no way your guy can live up to this.” My friend smiled tightly and replied, “Yes, that is what worries all of us.”

And of course, the tragedy of Barack Obama is that, as he was a merely a human being, he did not.

But while this unfair yardstick was beyond attaining, despite his undoubted prodigious gifts, President Obama also failed in more concrete terms. The many successes of his closet realist foreign policy—which kept America from stumbling into yet another major war in the Middle East, rightly saw Asia as where the action is in the new era, and correctly perceived that the world itself is now multipolar—are ethereal and will disappear as soon as Donald Trump (with his Jacksonian nationalist foreign policy) is sworn in as president.

The other tragedy of the Obama years is that while he was right that realism is the correct way to strategically think about the new multipolar world, he did not tell anyone else of his insight, forgoing necessary fights with the more utopian schools of thought such as Wilsonianism and neo-conservatism. As such, there are no Obama closet realist acolytes to politically carry on his cause. His many wise, measured, and correct foreign policy initiatives (the Trans-Pacific Partnership free trade deal in Asia leaps to mind) in the end amount to nothing lasting.

What Closet Realism as a Foreign Policy Strategy Looked Like

America’s oft-stated Pivot to Asia was the focus of the White House’s overall grand strategic goal. The President wanted America to spend far more time and effort in a region where much of the world’s future growth will occur and where much of its political risk is bound to threaten to kill the goose that just might lay this golden egg. For unlike in Europe, there are simply not any major multilateral institutions that are in place to cushion the strategic blows that fall there; foreign policy remains based on unadulterated power politics.

Further, tactical conditions in Asia were promising for the US. Due to the recent Chinese provocative stance in the South China and East China Seas, many important countries in the region increasingly yearn for America to play a larger role there, if only because realism dictates that favouring a far-away offshore- balancing ally is infinitely preferable to yielding to the domination of a neighbouring bully. Nations such as Japan, Vietnam, India, South Korea, the (pre-Duterte) Philippines, and Australia were all calling for America to do more, a welcome change for a Washington unused to much popularity in other vital hotspots such as Europe and the Middle East.

Vitally, the region’s other great power, China, lurked as the only possible peer competitor to America in the long-term. As such, spending time in the region carefully monitoring Beijing’s progress—building a coalition of Asian allies that makes any future effort by Beijing to become a revolutionary global power far more problematic–made eminent sense.

But for the Pivot to Asia to work, two other corresponding diminutions in America’s global presence were absolutely necessary. First, the US has to do less in Europe. Here America’s non-action over Russian President Putin’s move into eastern Ukraine and Crimea is instructive. Despite the usual beating of hawkish breasts, the Obama White House has managed to do the minimum over the crisis.

The Obama White House’s desire to do less in Europe was mirrored by its efforts to decrease America’s strategic footprint in the thankless Middle East, a region that has caused America no end of heartbreak over the past generation. In both cases, the White House wanted to position America as ultimately a great power off-shore balancer, with the US remaining a major player, but one who safeguards an organic balance-of-power, rather than intensively tending to the daily chores of alliance management in both regions.

All these foreign policy initiatives were informed by a greater strategic insight, that the US found itself in a very different structural position now that the world has become multipolar, an era of many powers. While America remains—much like Lord Salisbury’s late nineteenth century Britain—first among equals, and the greatest power in the world, it also is a fact that other countries are relatively gaining on it, and that there are real limits to the what the US can do, strictures that were not there in the freewheeling post-Cold War days.

Obama grasped this fundamental reality shift, but didn’t bother to tell anyone about it, as it would have been at odds with the dominant utopian Wilsonian school of thought in his own Democratic Party. The president’s standoffish approach to governing meant it was easier to simply not use the White House as a bully pulpit (as say Truman had done), come what may teaching the country about America’s place in this new world. It was far easier to avoid this fight, do the right closet realist thing, and pretend nothing much had changed. While understandable, this diffident political strategy has led to calamity.

Conclusion: The limits of Closet Realism

A foreign policy that cut prior losses (Iraq, Afghanistan), didn’t initiate new adventures (Syria), believed in talking to enemies (Iran), didn’t not waste much time on the impossible (Palestinian-Israeli peace), and focused on the essential (Asia) was all in place. And yet for being right about all this, Obama’s analytically correct Closet Realism will have no staying power, as the White House’s largely neglected foreign policy goes unnoticed into oblivion.

There have been no political battles over Closet Realism. But there has also been no re-education of the American public and its elites; the world has changed, but overall American thinking about foreign policy—never seriously challenged by the Obama administration—remains disastrously mired in an earlier era of easy American dominance.

While Closet Realism has been temporarily, fleetingly, effective, the absence of discussion about both it and the world it was created to deal with risks dooming America to a series of catastrophic failures, once the maximalist guard returns, who, like the Bourbons, never forget anything and never learn anything. The tragedy of Barack Obama is that he was right about foreign policy, but never bothered to tell anyone about the new world he so accurately foresaw.

Published in Aspenia online, January 9, 2017