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HOOVER DIGEST

R ESE AR C H + O P I N I ON ON P U B L I C P OLICY
FA LL 2 016 NO. 4

T H E H O OV E R I N S T I T U T I O N S TA N F O R D U N I V E R S I T Y

The Hoover Institution on War, Revolution and Peace was established at Stanford University
in 1919 by Herbert Hoover, a member of Stanfords pioneer graduating class of 1895 and the
thirty-first president of the United States. Created as a library and repository of documents,
the Institution approaches its centennial with a dual identity: an active public policy research
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The Institutions overarching goals are to:
Understand the causes and consequences of economic, political, and social change
Analyze the effects of government actions and public policies
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By collecting knowledge and generating ideas, the Hoover Institution seeks to improve the human condition with ideas that promote opportunity and prosperity, limit government intrusion
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RE S E A R C H + OP IN ION ON P U BL I C PO L I CY
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HOOVER DIGEST
R ESE A RC H + O P IN ION ON P U B LIC P OL I CY
Fall 2016 HO OV ER D IG EST.OR G
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Fall 2016
HOOVER D IG EST

T HE E CO N O M Y
9

Only a Clean Sweep Will Do


Americans live in a hoarders house cluttered with regulations,
tax schemes, and other growth-killing junk. A mere tidying
up? Its far too late for that. By John H. Cochrane

14

America the Fixer-Upper


If we got entitlement programs under control, we could pay
for the infrastructure we desperately need. By George P.
Shultz and John F. Cogan

18

Debt? What Debt?


The national debt is rising steeply. Somehow, voters manage
not to notice. By Charles Blahous

T RA D E
22

In a Trade War, No One Wins


What will help American workers? Free trade and better
incentivesnot protectionism. By Douglas A. Irwin

EUROPE
33

The Brexit Door


Hoover fellows examine where Britains perilous path might
lead.

H O O V E R D IG E ST Fall 2016 3

POLITICS
49

Alpha Dog Days


What this confusing presidential campaign has unleashed. By
Bill Whalen

56

The Demagogues Move In


The Democrats and the Republicans: two of the oldest, most
storied political parties in all of history. Hoover fellow James
Ceaser on how they got put up for rent. By Emma Green

62

Too Much Democracy?


Simple majorities were never meant to rule Americans lives.
How the founders limited factions and fanatics. By James
Huffman

66

The Walking Dead


Continually revived by unprincipledor ignorantUS
politicians, socialism is a zombie idea. By Paul R. Gregory

T HE M I L ITA RY
73

Warriors and Citizens


Civilians either thank him for his service, and let it go at that,
or ignore him altogether. Its time for Americans to get to
know the soldier next door. By Rosa Brooks

H OOVER DI GEST Fa ll 201 6

83

Ready or Not? Not


How budget cuts and shortsighted thinking have gutted both
our capacity and our readiness. By Thomas Donnelly

90

How to Sustain Our Military


Ships, shells, and boots on the ground: restoring our armed
forces is all in the details. By Gary Roughead

T E R R OR ISM
94

Wellsprings of Violence
Has radicalism been Islamized, or has Islam been radicalized?
If we are to fight this kind of terrorism effectively, the answer
matters. By Reuel Marc Gerecht

R U SS I A
99

Moscows Wounded Pride


Vladimir Putin embodies many of the pathologies of the postSoviet state, a land both animated and crippled by its sense of
mission. By Stephen Kotkin

110

Peace as Cold as Siberia


Americas frigid relations with Russia have little to do with US
policy. They have a great deal to do with Vladimir Putin. By
Michael A. McFaul

119

What Is Russias Military Up To?


The decrepit Red Army of Soviet days has been replaced by
a modern, effective fighting force. How effective? Its the job
of Lieutenant General H. R. McMaster to find out. By Bryan
Bender

H O O V E R D IG E ST Fall 2016 5

CHINA
128

Chinas Deep Logic


A big countryone thats always sought a big role in the
world. By Miles Maochun Yu

I N T E L L I GE N C E
133

The Snowden Cure


America and its intelligence establishment have recovered
from Edward Snowdens disclosuresand are better off for
them. By Jack Goldsmith

E D U C AT IO N
138

One Brainchild Left Behind


The federal drive for school reform has ground to a halt.
Now the long struggle is back in the hands of states and
communities. By Paul E. Peterson

142

School of Hard Knocks


For a quarter of a century now, charter schools have been
trying to provide disruptive innovation. A summary of what
weve learned. By Chester E. Finn Jr. and Brandon L. Wright

H OOVER DI GEST Fa ll 201 6

T HE E N VIR O N M E N T
150

Climate Wars Heat Up


Rancor over climate change has turned ExxonMobil into a
scapegoatfree speech be damned. By Richard A. Epstein

D E M O C R ACY A N D F R E EDOM
155

We Have to Hold the Line


Hoover fellow Timothy Garton Ash pens a free speech
manifesto for the Internet age. By Isaac Chotiner

I M M I GR ATIO N
163

Writing on the Walls


The truth is as old as Hadrians Wall: cultures that dont unite
wont get along. By Victor Davis Hanson

I N T E RVIE WS
170

John Hennessy: The Exit Interview


The outgoing Stanford president reflects on the founding, and
the future, of a truly great university. By Peter Robinson

180

We Ought to Be Humble
Economist and Hoover fellow Russell Roberts tries mightily
to make the dismal science less dismaland offers a warning
about the science part. By Kyle Peterson

VALU ES
185

In the Spirit of Friendship


Benjamin Franklin knew social ties would create the ideas
to energize his brave, new society. The Hoover Institution is
helping to rekindle Bens bright idea. By William Damon

H O O V E R D IG E ST Fall 2016 7

192

Visions of Entitlement
A guaranteed income for those who refuse to work? How did
we come to this? By Thomas Sowell

HI STORY A N D C ULTUR E
195

A Big Intellectual Risk


Hoover fellow Lee E. Ohanian dared to question the belief
that Franklin Roosevelts New Deal had anything to do
with ending the Depression. His research continuesand
continues to make ideologues uncomfortable. By Jessica Wolf

HO OV E R A R C HIVE S
199

The Cold Wars Pivot


When the Hungarian Revolution took place six decades ago,
the world learned the difference between containment, the
policy the United States had adopted, and rollback, the policy
it had not. By A. Ross Johnson

H OOVER DI GEST Fa ll 201 6

T H E ECON OM Y

Only a Clean
Sweep Will Do
Americans live in a hoarders house cluttered with
regulations, tax schemes, and other growth-killing
junk. A mere tidying up? Its far too late for that.

By John H. Cochrane

clerotic growth is Americas overriding economic problem. From


1950 to 2000, the US economy grew at an average rate of 3.5
percent annually. Since 2000, it has grown at half that rate1.76
percent. Even in the years since the bottom of the great recession

in 2009, which should have been a time of fast catch-up growth, the economy
has grown at only 2 percent.
The differences in these small percentages might seem minor, but over
time they have big consequences. By 2008, the average American was more
than three times better off than in 1952. Real GDP per person rose from
$16,000 to $49,000. And those numbers understate the advances in the
quality of goods, health, and environment that came with growth. But if
US growth between 1950 and 2000 had been the 2 percent of recent years
instead of 3.5 percent, income per person in 2000 would have risen to just
$23,000, not $50,000. Thats a huge difference.
Solving almost all of Americas problems hinges on re-establishing robust
economic growth. Over the next fifty years, if income could be doubled relative to 2 percent growth, the United States would be able to pay for Social

John H. Cochrane is a senior fellow at the Hoover Institution.


H O O V E R D IG E ST Fall 2016 9

[Taylor Jonesfor the Hoover Digest]

10

H OOVER DI GEST Fa ll 201 6

Security, Medicare, defense, environmental concerns, and the debt. Halve


that income gain and none of those spending challenges can be addressed.
Doubling income per capita would help the less-well-off far more than any
imaginable transfer scheme.
Why is growth slowing? One camp says that weve run out of ideas. We
were supposed to have flying cars and all we got was Twitter. Get used to it,
the thinking goes, and start fighting over the shrinking pie.
Another camp holds that the culprit is secular stagnation, a savings glut demanding sharply negative interest rates that the Federal
Reserve cannot deliver. That outlook attracts clever new economic theories and promotes vast new stimulus spending of the
sort that Japan has fruitlessly followed.
The third camp (mine) holds that the US
economy is simply overrun by an outof-control and increasingly

H O O V E R D IG E ST Fall 2016 11

politicized regulatory state. If it takes years to get the permits to start projects
and mountains of paper to hire people, if every step risks a new criminal investigation, people dont invest, hire, or innovate. The United States needs simple,
commonsense, Adam Smith policies.
America is middle-aged and overweight. The first camp says, well, thats
nature, stop complaining. The second camp looks for the latest miracle diet
try the ten-day detox cleanse! The third camp says get back to the tried, true,
and sometimes painful: eat right and exercise.
The first two camps are doubtful. How much more growth is
really possible from better poliDoubling income per capita would
help the less-well-off far more than cies? To get an idea, consider the
data comparing 2014 income per
any imaginable transfer scheme.
capita for 189 countries with the
World Banks Distance to Frontier ease-of-doing-business measure for the same
year. The measure combines individual indicators, including starting a business,
dealing with construction permits, protecting minority investors, paying taxes,
and trading across borders. This is a measure of how good or bad things are, with
100 being the best observed so far, or Frontier, score.
In general, the higher a countrys score, the higher its per capita income.
The Central African Republic scores a dismal 33, and has an annual per
capita income of just $328. Compare that to India (50.3, $1,455), China (61,
$7,000), and the United States (82, $53,000).
The United States scores well, but there is plenty of room for improvement.
A score of 100 unites the best already-observed performance in each category.
So a score of 100or Frontieris certainly possible. Frontier would generate
$163,000 of income per capita, 209 percent better than the current US figure. If
America could improve on the best seen in other countries by 10 percent, a 110
score would generate $400,000 income per capita, a 650 percent improvement.
If you think those numbers are absurd, consider China. Between 2000 and
2014, China averaged 15 percent growth and a 700 percent improvement in
income per capita. This growth did not follow from some grand stimulus
or central plan; Mao tried that in the 1960s and produced famine, not steel.
China just turned an awful business climate into a moderately bad one.
It is amazing that governments can do so much damage. Yet the evidence is
strong. The nearly controlled experimental comparison of North Korea versus South Korea, or East Germany versus West Germany, is even stronger.
If bad institutions can do such enormous harm, it follows inescapably that
better institutions can do enormous good.

12

H OOVER DI GEST Fa ll 201 6

A growth agenda doesnt fit neatly into current policy debates. This is
fortunate, as new ideas are easier to swallow than defeats.
Parties argue over tax rates, but whats really needed is deep tax reform,
cleaning out the insane complexity and cronyism.
Parties argue over how much to raise or cut spending for social programs,
but whats needed is a thorough overhaul of the programs pernicious incentives. For example, Social Security disability needs to remove its disincentives to work, move, or change careers.
Parties argue about education spending, but America needs the better
schools that come from increased choice and competition.
Most of all, the country needs a dramatic legal and regulatory simplification, restoring the rule of law. Middle-aged America is living in a hoarders
house of a legal system. State and local impediments such as occupational
licensing and zoning are also part of the problem.
Growth-oriented policies will be resisted. Growth comes from productivity,
which comes from new technologies and new companies. These displace the
profits of old companies, and the healthy pay and settled lives of their managers and workers. Economic regulation is largely designed to protect profits,
jobs, and wages tied to old ways of doing things. Everyone likes growth, but
only in someone elses backyard.
There is hope. Washington lawmakers need to bring about a grand bargain,
moving the debate from theyre getting their special deal, I want mine to
Im losing my special deal, so theyd better lose theirs too. While the presidential candidates are not championing economic growth, House Speaker
Paul Ryan and other House members are. And if economic-policy leadership
moves from a chaotic presidency to a well-run Congress, that may be healthy
for Americas political system as well as the economy.
Reprinted by permission of the Wall Street Journal. 2016 Dow Jones &
Co. All rights reserved.

New from the Hoover Institution Press is Central Bank


Governance and Oversight Reform, edited by John H.
Cochrane and John B. Taylor. To order, call (800) 888-4741
or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 13

T H E ECONOMY

America the
Fixer-Upper
If we got entitlement programs under control, we
could pay for the infrastructure we desperately need.

By George P. Shultz and John F. Cogan

ommon sense and careful observation

Key points

tell us that the water systems, roads,


and many other parts of Americas infrastructure are badly in need of modern-

ization and repair. The residents of Flint, Michigan,


certainly experienced this firsthand in their struggle
with their citys crumbling water system. Americans
who travel by car dodge potholes and bounce over
uneven roads and highways, and outdated bridges.
With all the taxes Americans are paying, why
is our public infrastructure in such bad shape?
Where can we find the resources to fix it?
The answer to both questions is the same. Rap-

Ballooning entitlement costs are


squeezing out vital infrastructure spending.
Shaving just 2% off
entitlement growth
would double federal transportation
spending.
Indexing Social
Security to prices, not
wages, and raising the
eligibility age would
preserve the program
and save money.

idly rising expenditures on entitlement programs


George P. Shultz is the Thomas W. and Susan B. Ford Distinguished Fellow at
the Hoover Institution, the chair of Hoovers Shultz-Stephenson Task Force on Energy Policy, and a member of Hoovers Working Group on Economic Policy. John
F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution
and a member of the Shultz-Stephenson Task Force on Energy Policy and the
Working Group on Economic Policy.
14

H OOVER DI GEST Fa ll 201 6

by all levels of government are squeezing out needed public investments.


At the federal level, Social Security and Medicare are the primary causes
of the squeeze. At the state and local levels, soaring public-employee pensions, Medicaid, and welfare are the culprits. Even the military is seeing the
squeeze from its own high retirement and health care costs.
According to the federal governments national income statistics, since
2003 expenditures on major entitlement programs by all levels of government have risen 15 percent faster than revenues. At the same time, according
to the Congressional Budget Office, public infrastructure spending adjusted
for the price of materials used in construction has declined 9 percent. Reductions have occurred at the state and local levels of government as well as at
the federal level.
The squeeze is about to get a lot tighter. As the Federal Reserve transitions
from near-zero interest rates to more normal rates, the burden of the governments high debt will take a substantial bite out of the federal budget. Larger
numbers of baby boomers collecting their federal, state, and local retirement
and health care benefits will take an even larger bite.
Entitlement restraint, necessary to ensure the nations economic health,
can also free up resources to rehabilitate public infrastructure. Shaving just
1 percent off the growth in entitlements would free up $100 billion annually
after four years. We estimate that shaving 2 percent could free up enough
money to double federal transportation spending.
Significant savings are not hard to find. Lets start with Social Security.
First, change the method of calculating initial benefits for future retirees
from wage to price indexing, taking effect, say, for those now younger than
sixty so that future retirees have time to adjust. No current retiree would be
affected. Future retirees would still be guaranteed a Social Security benefit
protected from inflation.
Second, continue the current policy of raising the age for full benefits to
sixty-seven and keep it going by indexing that age to changes in longevity.
Also, give people an incentive to stay in the labor force longer by eliminating
the payroll tax for those who have reached the age of full benefits. The modified Social Security program will be a better deal for younger people than
worrying about the system being bankrupt by the time they reach retirement
age.
These changes will help to ensure that Social Security continues to meet
the primary goal that President Franklin Roosevelt set for the program
eighty-one years ago: that monthly benefit levels provide some measure of
protection to the average citizen and to his family against...poverty-ridden

H O O V E R D IG E ST Fall 2016 15

[Taylor Jonesfor the Hoover Digest]

old age. The changes will also go a long way toward ensuring that benefits
can continue to be paid without substantially relying on general fund revenues, thereby meeting FDRs stated objective that the program not become
the same old dole under another name.
There are trends in the health care system that, if encouraged sensibly,
can result in a major improvement in Americans quality of life and the cost
of health care. Our scientists, with a lot of help from National Institutes of
Health funding, are teaching us more and more about how our bodies work
so that more and more people can take better control of their own health.
Gradually, lower-cost prevention can replace higher-cost treatment.
Health savings accounts, which allow individuals to set aside money taxfree for out-of-pocket health care expenses, can expand to encourage this
development. They should be made more broadly available, allowing those
who administer Medicare and Medicaid to provide adequate HSAs to their
clients. The result can be universal coverage that puts consumers, rather
than bureaucrats, at the center of the system.
Just as the federal government has politically difficult but conceptually
easy work to do, so do the state governments. All too many have overpromised pensions and health care to retirees, and these entitlements need to be
brought under control. The same basic ideas can be helpful here. While federal dollars are important, funding and control are even more important at
the state level. We need a coordinated effort. The entitlement fix is not hard
to conceive of, but it takes real political effort to do what is obvious.
The money can be there if we exercise common sense. As our bold boss,
Ronald Reagan, once told us, there are simple answers, they just are not
easy ones. So lets put on our hard hats and get on with it.
Reprinted by permission of the Wall Street Journal. 2016 Dow Jones &
Co. All rights reserved.

New from the Hoover Institution Press is Learning from


Experience, by George P. Shultz. To order, call (800)
888-4741 or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 17

T H E ECONOMY

Debt? What
Debt?
The national debt is rising steeply. Somehow,
voters manage not to notice.

By Charles Blahous

ne of the fascinating quirks of humanity, studied by scientists


ranging from behavioral economists to psychologists, is how our
perceptions of events are shaped as much by our expectations
as by objective realities. Because we compare outcomes to our

expectations it is easy to make a number of cognitive mistakes, including


confusing something getting better for something getting worse, and vice
versa. The national debt is a good example. The tenor of much recent news
coverage is that the federal debt is a fading problem, even though by any
objective measure it is a serious one that is rapidly getting worse.
Evidence that the federal debt situation is worsening is easily visible in
projections by the Congressional Budget Office (CBO). Throughout the whole
period the CBO has made estimates, federal debt held by the public never
exceeded 50 percent of GDP until 2009, when it began to rise dramatically,
eventually reaching roughly 75 percent of GDP this year. The CBO now projects that we will continue to accumulate debt at unsustainable rates, exceeding 85 percent of GDP by 2026 and continuing to grow to eventually exceed
our entire domestic economic output.
Charles Blahous is a research fellow at the Hoover Institution and a senior research fellow at the Mercatus Center.
18

H OOVER DI GEST Fa ll 201 6

Viewed objectively, our debt situation has grown much worse in recent
years and is projected to grow still worse in the future.
Strangely, levels of concern over the national debt do not reflect this reality. A Google Trends search of interest in national debt within the United
States turns up far less during the past two and a half years than during previous years; interest peaked before the 2008 and 2012 presidential elections
and during the debt ceiling negotiations of July 2011. Coverage by economic
reporters now typically treats the debt problem as having become less
bad. Even presidential candidates are running on platforms to increase the
national debt rather than reduce it. Why is this?
The answer may lie in comparisons with prior expectations. Things may
be getting worse but if you had expected them to be worse still, you can fool
yourself into thinking they are getting better. What has improved is not the
current reality of the federal budget but rather future expectations relative
to some previous expectations.
Heres how reporter Greg Ip put it in a recent Wall Street Journal article:
The real problem was never the debts the US incurred at the
depths of recession, but those that will pile up in coming decades
as an aging population sends the bill for Social Security and
Medicare through the roof. It is on that front that the outlook has
changed for the better....One reason for the reprieve is plunging
health care inflation....The second factor is interest rates.
Yes, if both interest rates and health care costs are lower than previously
expected, then future deficits and debt are likely to be as well, all other things
being equal.
But look more closely; this does not mean that the debt situation is actually
getting better. It merely means it is better than some previous projections.
The distinction is enormously important for policy
The debt may be getting worse, but
making, where what matters is the current collection if youd expected it to be worse still,
you can fool yourself into thinking
of facts as well as current
expectations for the future.
things are getting better.
Previous expectations are
irrelevant to the policy choices now before us. In fact, because those prior
expectations may influence our emotions and attitudes as we go about the
task, they distract us from the objective of setting optimal policy based on
what we now believe. The right policies for the future should not depend on

H O O V E R D IG E ST Fall 2016 19

[Taylor Jonesfor the Hoover Digest]

what we thoughtor hopedfive or ten years ago, when we had less information than we do now.
Our national confusion on this point is remarkablenot only because the
fiscal situation is worse than in prior years but because it is actually worse
than previous projections.
Again we turn to the CBOs baseline projections in previous years. The
most recent analysis estimates federal debt held by the public at 75.4 percent
of GDP for fiscal year 2016. This is worse than we thought in previous years
that it would be. Its a lot worse than the most optimistic projections made
in previous years, and even a little worse than the most pessimistic ones. For
example, in January 2011 the CBO projected that the public debt would climb
to 75 percent of GDP by fiscal year 2016. The worsening is actually greater
than the figures indicate because of changes to GDP measurement introduced between the 2013 and 2014 projections.
Not only are things a little worse than we recently thought theyd be,
theyre a lot worse than we expected several years ago.
In January 2010 the baseline debt projection for fiscal year 2016 was 65.5
percent of GDP. In January 2009 the projection was only 46.4 percent of GDP.
In January 2008 the projection was a mere 26.4 percent.

20

H OOVER DI GEST Fa ll 201 6

In other words, federal indebtedness is now nearly three times as serious


a problem as the CBO predicted in January 2008 that it would now be, while
warning that a substantial reduction in the growth of spending, a significant
increase in tax revenues
relative to the size of the
economy, or some comThe right policies for the future should
bination of the two will
not depend on what we thoughtor
be necessary to maintain
hopedfive or ten years ago.
the nations long-term fiscal stability.
The best we can say is that current long-term projections dont look as bad
as some previous long-term projections. But to fail to make necessary fiscal
corrections because of confusion engendered by prior expectations would be
a highly damaging indulgence of cognitive bias.
Reprinted by permission of e21. 2016 Economic Policies for the 21st Century. All rights reserved.

Available from the Hoover Institution Press is Making


Failure Feasible: How Bankruptcy Reform Can End
Too Big to Fail, edited by Kenneth E. Scott, Thomas H.
Jackson, and John B. Taylor. To order, call (800) 888-4741
or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 21

T RA DE

In a Trade War,
No One Wins
What will help American workers? Free trade and
better incentivesnot protectionism.

By Douglas A. Irwin

ust because a presidential candidate bashes free trade on the


campaign trail does not mean
that he or she cannot embrace

it once elected. After all, Barack Obama


voted against the Central American
Free Trade Agreement as a US senator and disparaged the North American
Free Trade Agreement (NAFTA) as a
presidential candidate. In office, however,
he came to champion the Trans-Pacific
Partnership (TPP), a giant trade deal with
eleven other Pacific Rim countries. Yet in
the current election cycle, the rhetorical
attacks on US trade policy have grown so
fiery that it is difficult to imagine similar

Key points
Trade is the opposite of a
zero-sum game.
The solution to economic
frustration is to help American workers, not stifle trade
with tariffs or protectionism.
A trade deficit is nothing
like a firms bottom line.
Americans actually
strongly support foreign
trade.
The threat from China is
not just overblown but out
of date.
Shrinking from world
trade will hurt Americans in
the end.

transformations.
Douglas A. Irwin, a distinguished visiting fellow at the Hoover Institution, is the
John Sloan Dickey Third Century Professor in the Social Sciences in the Department of Economics at Dartmouth College.
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H OOVER DI GEST Fa ll 201 6

Bernie Sanders, campaigning for the Democratic nomination, railed


against disastrous trade agreements, which he claimed have cost jobs and
hurt the middle class. The Republican Donald Trump complains that China,
Japan, and Mexico are killing the United States on trade thanks to the bad
deals struck by stupid negotiators. Even Hillary Clinton, the Democratic
nominee, who favored the TPP as secretary of state, has been forced to join
the chorus and now says she opposes that agreement.
Blaming other countries for the United States economic woes is an ageold tradition in American politics; if truth is the first casualty of war, then
support for free trade is often an early casualty of an election campaign. But
the bipartisan bombardment has been so intense this time, and has been so
unopposed, that it raises real questions about the future of US global economic leadership.
The anti-trade rhetoric paints a grossly distorted picture of trades role in
the US economy. Trade still benefits the United States enormously, and striking back at other countries by imposing new barriers or ripping up existing
agreements would be self-destructive. Backing out of the TPP would signal a
major US retreat from Asia and mark a historic error.
Still, it would be a mistake to dismiss all of the anti-trade talk as illinformed bombast. Todays electorate harbors legitimate, deep-seated frustrations about the state of the US economy and labor markets in particular,
and addressing these complaints will require changing government policies.
The solution, however, lies not in turning away from trade promotion but in
strengthening worker protections.
By and large, the United States has no major difficulties with respect to
trade, nor does it suffer from problems that could be solved by trade barriers. What it does face, however, is a much larger problem, one that lies at
the root of anxieties over trade: the economic ladder that allowed previous
generations of lower-skilled Americans to reach the middle class is broken.
SCAPEGOATING TRADE
Campaign attacks on trade leave an unfortunate impression on the American public and the world at large. In saying that some countries win and
other countries lose as a result of trade, for example, Trump portrays
it as a zero-sum game. Thats an understandable perspective for a casino
owner and businessman: gambling is the quintessential zero-sum game,
and competition is a win-lose proposition for firms (if not for their customers). But it is dead wrong as a way to think about the role of trade in an
economy. Trade is actually a two-way streetthe exchange of exports for

H O O V E R D IG E ST Fall 2016 23

importsthat makes efficient use of a countrys resources to increase its


material welfare. The United States sells to other countries the goods and
services that it produces relatively efficiently (from aircraft to soybeans to
legal advice) and buys those goods and services that other countries produce relatively efficiently (from T-shirts to bananas to electronics assembly). In the aggregate, both sides benefit.
To make their case that trade isnt working for the United States, critics
invoke long-discredited indicators, such as the countrys negative balance of
trade. Our trade deficit with China is like having a business that continues
to lose money every single year, Trump once said. Who would do business
like that? In fact, a nations trade balance is nothing like a firms bottom
line. Whereas a company cannot lose money indefinitely, a countryparticularly one, such as the United States, with a reserve currencycan run a
trade deficit indefinitely without compromising its well-being. Australia has
run current account deficits even longer than the United States has, and its
economy is flourishing.
One way to define a countrys trade balance is the difference between its
domestic savings and its domestic investment. The United States has run
a deficit in its current accountthe broadest measure of trade in goods
and servicesevery year
except one since 1981. Why?
If truth is the first casualty of war,
Because as a low-saving,
then support for free trade often dies
high-consuming country,
the United States has long
early in a political campaign.
been the recipient of capital
inflows from abroad. Reducing the current account deficit would require foreigners to purchase fewer US assets. That, in turn, would require increasing
domestic savings or, to put it in less popular terms, reducing consumption.
One way to accomplish that would be to change the tax systemfor example, by instituting a consumption tax. But discouraging spending and rewarding savings is not easy, and critics of the trade deficit do not fully appreciate
the difficulty involved in reversing it. (And if a current account surplus were
to appear, critics would no doubt complain, as they did in the 1960s, that the
United States was investing too much abroad and not enough at home.)
Critics also point to the trade deficit to suggest that the United States is
losing more jobs as a result of imports than it gains from exports. In fact, the
trade deficit usually increases when the economy is growing and creating
jobs and decreases when it is contracting and losing jobs. The US current
account deficit shrank from 5.8 percent of GDP in 2006 to 2.7 percent in

24

H OOVER DI GEST Fa ll 201 6

2009, but that didnt stop the economy from hemorrhaging jobs. And if there
is any doubt that a current account surplus is no economic panacea, one need
only look at Japan, which has endured three decades of economic stagnation
despite running consistent current account surpluses.
And yet these basic fallaciesmany of which Adam Smith debunked more
than two centuries agohave found a new life in contemporary American
politics. In some ways, it is odd that anti-trade sentiment has blossomed in
2016, of all years. For one thing, although the post-recession recovery has
been disappointing, it has
hardly been awful: the
Trade makes efficient use of both
US economy has experienced seven years of
countries resources to increase their
slow but steady growth
mutual welfare.
and the unemployment
rate has fallen to just 5 percent. Meanwhile, imports have not swamped the
country and caused problems for domestic producers and their workers;
over the past seven years, the current account deficit has remained roughly
unchanged at about 2 to 3 percent of GDP, much lower than its level from
2000 to 2007. The pace of globalization, meanwhile, has slowed in recent
years. The World Trade Organization (WTO) forecasts that the volume of
world trade will grow just 2.8 percent in 2016, the fifth consecutive year
that it has grown by less than 3 percent, down significantly from previous
decades.
Whats more, despite what one might infer from the crowds at campaign
rallies, Americans actually support foreign trade in general and even trade
agreements such as the TPP in particular. After a decade of viewing trade
with skepticism, since 2013 Americans have seen it positively. A February
2016 Gallup poll found that 58 percent of Americans consider foreign trade an
opportunity for economic growth, and only 34 percent viewed it as a threat.
THE VIEW FROM THE BOTTOM
So why is trade under such strident attack? The most important reason is
that workers are still suffering from the aftermath of the Great Recession,
which left many unemployed and indebted. Between 2007 and 2009, the
United States lost nearly nine million jobs, pushing the unemployment rate
up to 10 percent. Seven years later, the economy is still recovering. Many
workers have left the labor force, reducing the employment-to-population
ratio sharply. Real wages have remained flat. For many Americans, the recession isnt over.

H O O V E R D IG E ST Fall 2016 25

Thus, even as trade commands broad public support, a significant minority of the electorateabout a third, according to various pollsdecidedly
oppose it. These critics come from both sides of the political divide, but they
tend to be lower-income, blue-collar workers, who are the most vulnerable to
economic change. They believe that economic elites and the political establishment have looked out only for themselves over the past few decades. As
they see it, the government bailed out banks during the financial crisis, but
no one came to their aid.
For these workers, neither political party has taken their concerns
seriously, and both parties have struck trade deals that the workers
think have cost jobs. Labor unions that support the Democrats still feel
betrayed by President Bill Clinton, who, over their strong objections,
secured congressional passage of NAFTA in 1993 and normalized trade
relations with China in 2000. Blue-collar Republican voters, for their
part, supported the anti-NAFTA presidential campaigns of Pat Buchanan
and Ross Perot in 1992. They felt betrayed by President George W. Bush,
who pushed Congress to pass many bilateral trade agreements. Today,
they back Trump.
Among this demographic, a narrative has taken hold that trade has cost
Americans their jobs, squeezed the middle class, and kept wages low. The
truth is more complicated. Although imports have put some people out
of work, trade is far from the most important factor behind the loss of
manufacturing jobs. The
main culprit is technology.
Fallacies that Adam Smith debunked Automation and other technologies have enabled vast
more than two centuries ago have
productivity and efficiency
been reborn.
improvements but they
have also made many blue-collar jobs obsolete. One representative study,
by the Center for Business and Economic Research at Ball State University,
found that productivity growth accounted for more than 85 percent of the
job loss in manufacturing between 2000 and 2010, a period when employment in that sector fell by 5.6 million. Just 13 percent of the overall job
loss resulted from trade, although in two sectors, apparel and furniture, it
accounted for 40 percent.
This finding is consistent with research by the economists David Autor,
David Dorn, and Gordon Hanson, who have estimated that imports from
China displaced as many as 982,000 workers in manufacturing from 2000 to
2007. These layoffs also depressed local labor markets in communities that

26

H OOVER DI GEST Fa ll 201 6

produced goods facing Chinese competition, such as textiles, apparel, and


furniture. The number of jobs lost is large, but it should be put in perspective: while Chinese imports may have cost nearly a million manufacturing
jobs over almost a decade, the normal churn of US labor markets results in
roughly 1.7 million layoffs every month.
Research into the effect of Chinese imports on US employment has been
widely misinterpreted to imply that the United States has gotten a raw deal
from trade with China. In fact, such studies do not evaluate the gains from
trade, since they make no attempt to quantify the benefits to consumers from
lower-priced goods. Rather, they serve as a reminder that a rapid increase in
imports can harm communities that produce
Far from exploiting Third World
substitute goodsas
labor, as critics charged, NAFTA
happened in the US
automotive and steel sec- has promoted the growth of a Mexican middle class that now includes
tors in the 1980s.
Furthermore, the
nearly half of all households.
shock of Chinese goods
was a one-time event that occurred under special circumstances. Imports
from China increased from 1 percent of US GDP in 2000 to 2.6 percent
in 2011, but for the past five years, the share has stayed roughly constant.
There is no reason to believe it will rise further. Chinas once-rapid economic
growth has slowed. Its working-age population has begun to shrink, and the
migration of its rural workers to coastal urban manufacturing areas has
largely run its course.
The influx of Chinese imports was also unusual in that much of it
occurred from 2001 to 2007, when Chinas current account surplus soared,
reaching 10 percent of GDP in 2007. The countrys export boom was partly
facilitated by Chinas policy of preventing the appreciation of the yuan,
which lowered the price of Chinese goods. Beginning around 2000, the Chinese central bank engaged in a large-scale, persistent, and one-way intervention in the foreign exchange marketbuying dollars and selling yuan.
As a result, its foreign exchange reserves rose from less than $300 million
in 2000 to $3.25 trillion in 2011. Critics rightly groused that this effort constituted currency manipulation and violated International Monetary Fund
rules. Yet such complaints are now moot: over the past year, Chinas foreign
exchange reserves have fallen rapidly as its central bank has sought to
prop up the value of the yuan. Punishing China for past bad behavior would
accomplish nothing.

H O O V E R D IG E ST Fall 2016 27

THE RIGHTAND WRONGSOLUTIONS


The real problem is not trade but diminished domestic opportunity and social
mobility. Although the United States boasts a highly skilled workforce and
a solid technological base, it is still the case that only one in three American
adults has a college education. In past decades, the two-thirds of Americans
with no postsecondary degree often found work in manufacturing, construction,
or the armed forces. These parts of the economy stood ready to absorb large
numbers of people with limited education, give them productive work, and help
them build skills. Over time, however, these opportunities have disappeared.
Technology has shrunk
manufacturing as a source
If a current account surplus were to
of large-scale employment:
appear, critics would no doubt comeven though US manufacplain, as in the 1960s, that the United turing output continues to
grow, it does so with many
States was investing too much
fewer workers than in the
abroad and not enough at home.
past. Construction work
has not recovered from the bursting of the housing bubble. And the military turns away 80 percent of applicants because of stringent fitness and
intelligence requirements. There are no comparable sectors of the economy that can employ large numbers of high-school-educated workers.
This is a deep problem for American society. The unemployment rate
for college-educated workers is 2.4 percent, but it is more than 7.4 percent for those without a high school diplomaand even higher when
counting discouraged workers who have left the labor force but wish to
work. These are the people who have been left behind in the twenty-firstcentury economyagain, not primarily because of trade but because of
structural changes in the economy. Helping these workers and ensuring
that the economy delivers benefits to everyone should rank as urgent
priorities.
But here is where the focus on trade is a diversion. Since trade is not the
underlying problem in terms of job loss, neither is protectionism a solution.
While the gains from trade can seem abstract, the costs of trade restrictions
are concrete. For example, the United States has some 135,000 workers
employed in the apparel industry, but there are more than forty-five million Americans who live below the poverty line, stretching every dollar they
have. Can one really justify increasing the price of clothing for forty-five million low-income Americans (and everyone else) in an effort to save the jobs
of just some of the 135,000 low-wage workers in the apparel industry?
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H OOVER DI GEST Fa ll 201 6

Like undoing trade agreements, imposing selective import duties to punish


specific countries would also fail. If the United States were to slap 45 percent tariffs on imports from China, as Trump has proposed, US companies
would not start producing more apparel and footwear in the United States,
nor would they start assembling consumer electronics domestically. Instead,
production would shift from China to other low-wage developing countries
in Asia, such as Vietnam. Thats the lesson of past trade sanctions directed
against China alone: in 2009, when the Obama administration imposed duties
on automobile tires from China in an effort to save American jobs, other suppliers, principally Indonesia and Thailand, filled the void, resulting in little
impact on US production or jobs.
And if restrictions were levied against all foreign imports to prevent such
trade diversion, those barriers would hit innocent bystanders: Canada,
Japan, Mexico, the European Union, and many others. Any number of these
would use WTO procedures to retaliate against the United States, threatening the livelihoods of the millions of Americans with jobs that depend on
exports of manufactured goods.
Trade wars produce no winners. There are good reasons why the very
mention of the 1930 Smoot-Hawley Tariff Act still conjures up memories of
the Great Depression.
If protectionism is an
Yes, people have been left behind in
ineffectual and counterthe twenty-first-century economy
productive response to
the economic problems
but because of structural changes in
of much of the workthe economy, not trade.
force, so, too, are existing
programs designed to help workers displaced by trade. The standard package of Trade Adjustment Assistance, a federal program begun in the 1960s,
consists of extended unemployment compensation and retraining programs.
But because these benefits are limited to workers who lost their jobs to trade,
they miss the millions more who are unemployed on account of technological
change. Furthermore, the program is fraught with bad incentives. Extended
unemployment compensation pays workers for prolonged periods of joblessness, but their job prospects usually deteriorate the longer they stay out of
the labor force, since they have lost experience in the interim.
And although the idea behind retraining is a good onehelping laid-off
textile or steel workers become nurses or techniciansthe actual program is a failure. A 2012 external review commissioned by the Department of Labor found that the government retraining programs were a net

H O O V E R D IG E ST Fall 2016 29

loss for society, to the tune of about $54,000 per participant. Half of that
fell on the participants themselves, who, on average, earned $27,000 less
over the four years of the study than similar workers who did not find
jobs through the program, and half fell on the government, which footed
the bill for the program. Sadly, these programs appear to do more harm
than good.
A better way to help all low-income workers would be to expand the
earned-income tax credit (EITC). The EITC supplements the incomes of
workers in all low-income households, not just those the Department of
Labor designates as having
been adversely affected
Chinese imports may have cost
by trade. Whats more, the
nearly a million manufacturing jobs
EITC is tied to employment,
over almost a decade. But the normal thereby rewarding work and
keeping people in the labor
churn of US labor markets chalks up
market, where they can
1.7 million layoffs every month.
gain experience and build
skills. Of all the potential assistance programs, the EITC also enjoys the most
bipartisan support, having been endorsed by both the Obama administration
and Paul Ryan, the Republican speaker of the House. A higher EITC would
not be a cure-all, but it would provide income security for those seeking to
climb the ladder to the middle class.
Taxpayers already bear the burden of supporting workers who leave the
labor force, many of whom start receiving disability payments. On disability,
people are paidpermanentlyto drop out of the labor force and not work.
In lieu of this federal program, the cost of which has surged in recent years, it
would be better to help people remain in the workforce through the EITC, in
the hope that they can eventually become taxpayers themselves.
THE FUTURE OF FREE TRADE
Economists responses to harsh anti-trade campaign rhetoric have tended
to be either meek defenses of trade or outright silence, with some even
criticizing parts of the TPP. Its time for supporters of free trade to engage
in a full-throated championing of the many achievements of US trade
agreements.
Because other countries trade barriers tend to be higher than those of
the United States, trade agreements open foreign markets to US exports
more than they open the US market to foreign imports. That was true of
NAFTA, which remains a favored punching bag on the campaign trail. In

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H OOVER DI GEST Fa ll 201 6

fact, NAFTA has been a big economic and foreign policy success. Since the
agreement entered into force in 1994, bilateral trade between the United
States and Mexico has boomed. For all the fear about Mexican imports
flooding the US market, it is worth noting that about 40 percent of the
value of imports from Mexico consists of content originally made in the
United Statesfor example, auto parts produced in the United States but
assembled in Mexico. It is precisely such trade in component parts that
makes standard measures of bilateral trade balances so misleading.
NAFTA has also furthered the United States long-term political, diplomatic, and economic interest in a flourishing, democratic Mexico, which not only
reduces immigration pressures on border states but also increases Mexican
demand for US goods and services. Far from exploiting Third World labor,
as critics have charged, NAFTA has promoted the growth of a middle class
in Mexico that now includes nearly half of all households. And since 2009,
more Mexicans have left the United States than have come in. In the two
decades since NAFTA went into effect, Mexico has been transformed from a
clientelistic one-party state with widespread anti-American sentiment into a
functional multiparty democracy with a generally pro-American public.
One option for the United States would be to pause and simply stop
negotiating any more trade agreements, as Obama did during his first term.
The problem with this approach, however, is that the rest of the world would
continue to reach trade agreements without the United States, and so US
exporters would find themselves at a disadvantage compared with their
foreign competitors. Glimpses of that future can already be seen. In 2012, the
car manufacturer Audi chose southeastern Mexico over Tennessee for the
site of a new plant because it
could save thousands of dollars
per car exported, thanks to
NAFTA has neither cheated
Mexicos many more free-trade
the United States nor exploited
agreements, including one with
Mexico. Both, in fact, have
the European Union. Australia
benefited.
has reached trade deals with
China and Japan that give Australian farmers preferential access in those
markets, cutting into US beef exports.
If Washington opted out of the Trans-Pacific Partnership, it would forgo an
opportunity to shape the rules of international trade in the twenty-first century. Other countries are already moving ahead with their own trade agreements, increasingly taking market share from US exporters in the dynamic
Asia-Pacific region.

H O O V E R D IG E ST Fall 2016 31

Free trade has always been a hard sell. But the anti-trade rhetoric of the
2016 campaign has made it difficult for even pro-trade members of Congress
to support new agreements. Experience suggests that Washington will lead
the charge for reducing trade barriers only when there is a major trade
problem to be solvednamely, when US exporters face severe discrimination
in foreign markets. Until the United States feels the pain of getting cut out of
major foreign markets, its leadership on global trade may wane. That would
represent just one casualty of the current campaign.
Reprinted by permission of Foreign Affairs (www.foreignaffairs.com).
2016 by the Council on Foreign Relations Inc. All rights reserved.

Available from the Hoover Institution Press is NAFTA


at 20: The North American Free Trade Agreements
Achievements and Challenges, edited by Michael J.
Boskin. To order, call (800) 888-4741 or visit www.
hooverpress.org.

32

H OOVER DI GEST Fa ll 201 6

E UR OPE

The Brexit Door


Hoover fellows examine where Britains perilous
path might lead.

ritons voted in a referendum last summer to sever ties with the


European Union, a step that could have profound consequences
for the world economy, immigration, cultural and political ties,
and security. Hoover Institution fellows and task force members

continue to examine the implications of a post-Brexit world.


JOSEF JOFFE: A SLAP TO THE RULING CLASS
After Brexit, the cold eye sees only losers. Two of them, the United Kingdom
and the European Union, are obvious. The third one deserves a more complex reckoning.
Robbed of the EU as the worlds richest market, London instead will now
have to knock, hat in hand, on the doors of the United States and China.
Chasing independence, Mini-Britain will discover that it has squandered its
clout in a world of giants.
Europe loses close to 20 percent of its gross domestic product, its most
dynamic economy, and a champion of economic freedom against the dirigisme of Brussels. In the global arena, the EU will have to fend without the
one nation still willing to use force against the malfeasants du jour. In finance,
pride of place will slip from the City to Frankfurt.
The biggest loser, though, is the New Class. Samuel Huntington called this
new global elite the Davos Man. He has little need for national loyalty, views
national boundaries as obstacles that thankfully are vanishing, and sees
national governments as residues from the past whose only useful function is
to facilitate the elites global operations.
H O O V E R D IG E ST Fall 2016 33

Thomas Frank, in his book Listen, Liberal, changes the label to Liberal
Class. Unlike yesterdays ruling class, this one isnt defined by high birth or
wealth but by education and expertise. These assets are their means of production, to borrow from Karl Marx. Their Ivy League and Oxbridge degrees
are their ticket to entitlement. Economic security, social status, and cultural
hegemony are their rewards.
The grandees of the zeitgeist are professors and pundits, authors and
anchors, university administrators and deans of diversity, school principals
and psychologists, Greens
and feminists, the gurus of
This class war isnt about income.
the creative class and the
Its about culturethe civic faith.
guardians of correct thinking. Add the very rich who
have amassed billions not by making stuff but in global finance, entertainment, and digital wizardry.
The experts and knowledge workers set the agenda and deliver the truth.
They are lifes officer class, Frank quips. They give the orders and write
the prescriptions for whatever ails society: global warming, LBGT discrimination, MBA women held back by the patriarchy. They preach one world and
multiculturalism. And like any ruling class, they mobilize the state to enforce
correct language and demeanor.
Yet they do not speak for the hoi polloithe worker bees and the soft
middle beset by globalization and, more brutally, by technology. Ages ago,
Americas Democrats and Europes Social Democrats did. Now they talk
workers rights in the Third World.
Their defection explains the rise of populism, which happens to be both of
the left and right, as Bernie Sanders and Donald Trump show. In Europe, it is
Marine Le Pen, Nigel Farage, or Geert Wilders on the right. On the left, Die Linke in Germany, Syriza in Greece, and Podemos in Spain. All of them are delighted to corner the market where injured pride, fear, and frustration beckon.
The Great Unwashed have also noticed the contempt the New Class holds
for them. Theyre considered foes of goodness by the New Class: angry,
middle-aged white men without college degrees who wont keep up. They are
on the wrong side of history, to invoke an Obama shibboleth.
Historys avant-garde knows how to deal with the losers. Every economic problem, Frank writes, is really an education problem. To better
themselves, the poor must go to school. Thus, everybody could become a
yuppie.
Going for Brexit, seventeen million Brits roared no.

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H OOVER DI GEST Fa ll 201 6

[Taylor Jonesfor the Hoover Digest]

The rebellion of the voiceless screams: Listen, liberal, check your moral
hauteur and accord us worth. Care as much about us as about LBGT. Pride
in the nation is not xenophobia. Dont bamboozle us by refusing to call terrorism Islamic. Keep our gates open, but insist on assimilation. Restore
self-government, which has ebbed away to Brussels and the Obama White
House as it drowns out Congress with torrents of executive orders. Dont
censor speech.
This class war isnt about income but culture. Its about the civic faith.
Liberals should listen for their own sake. The middle is not the mob. Ceding
H O O V E R D IG E S T Fall 2016 35

the forgotten to the Mussolinis of the twenty-first century will speed the
victory of illiberalism, the common enemy of us all, and a tragedy worse
than Brexit.
TIMOTHY GARTON ASH: SHATTERED HOPES
Britain cannot leave Europe any more than Piccadilly Circus can leave London. Europe is where we are, and where we will remain. Britain has always
been a European country, its fate inextricably intertwined with that of the
continent, and it always will be. But it is leaving the European Union. Why?
Look in the mirror and say after me: we are also to blame. How did we,
as educators, allow such a simplistic narrative to go unchallenged by good
history and civics taught at
school and university? How
It feels almost as bad as the fall of
did we, as journalists, allow
the Berlin Wall was good.
the Eurosceptic press to
get away with it, setting the
daily news agenda for radio and television as well? How can we pro-Europeans have so underrated the painful sense of losing out from Europeanization
that I encountered when canvassing for a vote to remain?
And why have generation upon generation of British politicians failed to
make the positive case for the project of European integration that we call in
shorthand Europe?
Yet the origins of this debacle are as much European as British. As their
price for supporting German unification, France and Italy pinned Germany
down to a timetable for an overhasty, ill-designed, and overextended European monetary union. As a result of their liberation from Soviet communist
control, many poorer countries in Eastern Europe were set on a path to EU
membership, including its core freedom of movement. And 1989 opened the
door to globalization, with spectacular winners and numerous losers. Each
of these chickens came home to roost in Britains referendum.
As a lifelong English European, I see this as the biggest defeat of my
political life. It feels almost as bad as the fall of the Berlin Wall was good. I
believe it will spell the end of the United Kingdom, yet even worse may be
the impact on Europe. Unless the European Union learns the lessons of this
stinging reverse, it will be engulfed by a thousand continental versions of the
Brexiteers.
Acres of newsprint and gigabytes of web space will be devoted over the
next months to the grim mechanics of disentangling the UK from the EU.
As all the experts derided by the Brexiteers pointed out, this will be long,

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H OOVER DI GEST Fa ll 201 6

complicated, and painful. Those of us who predicted, in entirely good faith,


that the consequences of Brexit would be disastrous have to work to prove
ourselves wrong. I would be so happy if we were proved wrong.
ALLAN H. MELTZER: THE PEOPLE HAVE SPOKEN
Most of the Brexit commentary has been nothing short of apocalyptic. A
typical response came from George Soros, who claimed that the catastrophic scenario that many feared has materialized. He went on to speculate that
other EU members would choose to punish Britain in future negotiations on
separation and trade. And he seemed certain that other EU members have
reached a breaking point.
This dark future is not at all certain. What is certain is that Britain will pay
a short-term cost for Brexit. The long-term effect cannot be known until both
Britain and the EU choose their next steps and ultimate objectives. That will
test the leaderships wisdom on both sides.
What becomes clear is that to those on the left, centralized control by the
Brussels bureaucrats is much more desirable than a heroic effort by the
people to strengthen their freedom. No one on the left mentions the EUs
poor prospects, its inability to develop a successful pro-growth strategy or to
control the greedy special interests that especially burden France and Italy,
or the waste of time, money, and attention in dealing with the failed Greek
economy.
British growth has surpassed the EU average. If it chooses to increase
market freedom, Britain will improve on its recent performance. Stripping
away the hyperbole,
the majority of voters
According to the left, centralized
included those who
control by Brussels is more desirremembered that since
the Glorious Revolution
able than the peoples heroic effort to
of 1688, the British have
strengthen their freedom.
cherished the right of
free citizens to have taxes and laws made by their elected parliament. David
Camerons negotiations with the EU did not regain those rights.
Brexit is more of an orderly retreat. Market participants dislike uncertainty,
but there is no way to avoid it. No one can know how soon Britain will be
ready to negotiate a new agreement with the EU, how amicable the negotiations will be, and how well the British will be able to restore their trading
positions around the world. There also is no way that EU countries can punish
Britain by refusing to renew trade agreements without hurting themselves.

H O O V E R D IG E ST Fall 2016 37

DEFEAT: Prime Minister David Cameron, who campaigned for Britain to stay
in the European Union, announces his resignation June 24. Cameron, who had
described Brexit as an act of economic self-harm, maintained that the will
of the British people is an instruction that must be delivered. [Tom EvansOpen
Government Licence]

The EUs leaders should listen to the message of Brexit and use it as
an opportunity to remake the EU, whose original aim was to supply some
common collective policies, what economists call public goods. As member
nations sought ever closer union, common tax rates and common regulations were imposed. That degenerated into an effort to impose a common set
of rules on a very heterogeneous population.
Europeans, like Americans, come from many different cultures. And also
like Americans, many of them resist the rules passed down to them from a
remote and centralized source of power. Every country has to decide what
will be done best collectively and what should be accomplished locally and
individually. Europe took a wrong turn when it extended its centralized control to rules that need not be common.
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H OOVER DI GEST Fa ll 201 6

After Brexit, the European Union has a choice. One path punishes Britain
and sustains a relatively stagnant European Union. The other is harder but
will lead to a stronger union and a better world.
NIALL FERGUSON: LONG, COSTLY DIVORCE
In June, the papers were full of prophecies of the impending end of days. I
myself said Britain was heading down the stairway to hell. And then, having fallen off a Lehman Brothersstyle cliff on July 24, global financial markets rallied. This created the perfect opportunity for the referendums victors
to consign the losers warnings to the shredder.
The flaw with this argument is twofold. First, and most important, Brexit
hasnt happened. Nor is it imminent. In fact, it probably wont happen for
more than two years. Second, there is no evidence yet to dismiss the predictions that the United Kingdom would suffer a recession if the electorate
voted to leave the European Union. I still expect it to, as investment appears
to have ground to a halt, and that sucking sound you hear is the sound of
financial-services jobs leaving London.
Nor did the referendum result portend a generalized revolt against the
elites (a view fashionable with the kind of hacks who belong to the elites but
like to write as if they dont). The only concrete consequence of the referendum so far is a Tory leadership contest that seemed like a re-enactment of
the Oxford student politics of my youth.
The revolt against the elites thesis has another flaw. The biggest division
exposed by the referendum was between the generations. Not only were the
elderly much more likely to back Brexit than the young, but they were also
much more likely to show up and vote.
You need to be in your eighties to remember what a mess Europe was
in 1945. Small wonder
David Camerons somber
That sucking sound you hear is the
warning about the continents historic instability
sound of financial-services jobs
did not resonate.
leaving London.
Make no mistake, my
pro-Brexit friends: you voted for a divorce. And, like most divorces, its going
to take much longer than you think and cost much more. Today there are a
great many Brexiteers who, like an estranged spouse, would love to pin all
the United Kingdoms problems on the EU. Trust me. Most of those problems
will still be there after Brexit, along with a heap of nasty new ones. And youll
have no one left to blame but yourself.

H O O V E R D IG E ST Fall 2016 39

TIME TO GO: Protesters outside 10 Downing Street press the new prime
minister, Theresa May, to uphold the leave vote. May insists that post-Brexit
Britain will still very much be part of Europe. [Vicky TsuiEyePress]

STEPHEN KOTKIN: TRANSNATIONAL TRAVAILS


Britains vote to leave the European Union has been salutary, exposing the
political, economic, and cultural divide between the Davos elites (to use
shorthand) and the majority. This gap has widened not just in the United
Kingdom, of course, and this was not the first such vote. (When Brussels has
been put to national votes, it has tended to be repudiated, only to be rescued
by re-votes or the results simply ignored.) A squeaker remain vote in the
United Kingdom would have enabled the Davos elites to continue papering
over the divide. So whatever the mendacity and irresponsibility of the leavers, or the ultimate outcome of any Brexit process, balloting was a victory
for democracy.
The vote did not appreciably increase the risk of an unraveling of the
EU, which was already high. Europe today is remarkably prosperous and
peaceful, with degrees of cross-border cooperation that are stunning by any
historical standard. And this followed the most horrible wars in recorded
history and required decades of painstaking effort and painful compromise.
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H OOVER DI GEST Fa ll 201 6

All this has been undermined, though, not by the 52-48 vote in the United
Kingdom but by the integration process itself.
Europes deep and perhaps insurmountable challenges are rooted in a shift
from the European Economic Community, a zone of free trade in goods, to
the European Union. Hopes for such a leap can be appreciated, but it has
proved fateful in practice. Monetary union came first not because it was
most desired but because it was the least difficult. Political union lagged not
because it was less desired but because it was too difficult (cultural union,
still more so). But as some critics warned at the time, and which has become
evident to many more people since, monetary union without fiscal and ultimately political union does not advance prosperity and peace.
Europes fundamental structural dilemma is often obscured by passionate ideological tilting. In left-wing critiques, the EU is increasingly identified
with neoliberalism, an epithet taken to mean wrongheaded liberalization of
every aspect of the economy, from capital (finance) to labor (immigration),
which is viewed as advantaging the few and disadvantaging the middle and
working classes. At the same time, much of the actual work of the various
European bodies involves extensive regulation to harmonize laws, practices, and institutions across borderswhich produces absurd rules governing
minutiae, and fodder for right-wing critiques. In both guiseshyper-liberalization or hyper-regulationEurope is more easily bashed than loved.
Imagine that the North American Free Trade Agreement, NAFTA, had
been deepened to include a supranational court, housed, say, in Mexico
City, whose rulings were mandatory for every US jurisdiction. And that every
single citizen of Mexico possessed the right, not by flouting the law but precisely according to the law, to settle in the United States and draw upon US
government benefits. Pondering this arrangement, Americans might better
understand much of the
popular mood in Europe.
Transnationalism has built-in limTransnationalism has
its. It remains, in important ways,
built-in limits. Nationalism often gets a bad
incompatible with democracy.
name, but it is, by definition, majoritarian and therefore compatible with democracy. Transnational
sentiments remain decidedly minoritarian and therefore, in important ways,
incompatible with democracy.
If Brexit takes place in some formwhich remains to be seenit will
have little or no appreciable effect on Europes fundamental structural
dilemma. Europes status quo is detrimental and ultimately untenable, but

H O O V E R D IG E ST Fall 2016 41

its replacement could take different forms. Upheaval remains an option. In


the long term, it seems to have placed in question the survival of the United
Kingdom. Scotland, Wales, and Northern Ireland have been developing political cultures different from that of England. If the UK is worth saving, and if
it can be saved, it will be. If not, the Brexit vote will have at most accelerated
something that would have happened anyway.
MICHAEL A. MCFAUL: RUSSIA WILL BENEFIT
Europe is now weakening as Russia, its allies, and its multilateral organizations are consolidating, even adding new members. Vladimir Putin, of course,
did not cause the Brexit vote, but he and his foreign policy objectives stand to
gain enormously from it.
Most important, one of the European Unions most principled critics of
Russian aggression in Europe will no longer have a vote in Brussels. Thats
good for Putins interests and bad for US national interests.
London also helped advance our common interests inside the European
Union on non-European security issues from Iran to Libya to as far away as
the Pacific. That Anglo-Saxon perspective is now lost
The job of European diplomats fight- within this most important
ing to resist Russian aggression just
international organization.
The UK exit also removes
got harder.
one of the EUs most capable
members. Whether it was Britains world-class military or its skilled diplomatic corps, the United Kingdom contributed greatly to an array of EU
missions over the years, despite its complicated relationship with Brussels.
Removing those resources, personnel, and assets from the EU will ultimately
weaken the organization, an outcome that serves Putins political purposes.
To be sure, the British government will continue to engage the EU and
European capitals on foreign policy matters of mutual interest, just as the
United States does now. But having a seat at the table with a vote and a
veto is different from trying to influence those sitting at the table. The job of
diplomats from EU countries seeking greater accommodation with Moscow
just got easier. The job of EU diplomats fighting to resist Russian aggression,
especially those from Estonia, Latvia, and Lithuania, just got harder.
Moreover, pro-Putin, anti-EU politicians and movements throughout
Europe just became a little stronger. Marine Le Pen, whose National Front
party is partially financed by a Kremlin-friendly Russian bank, celebrated the
UK referendum result. Other nationalist, xenophobic, isolationist leaders and

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H OOVER DI GEST Fa ll 201 6

parties on the continent who share her views already have begun to call for
EU exit referendums in their countries. Even the process of debating these
initiatives will weaken European unity.
Britain, our special partner, will be distracted for years in managing these
internal challenges and the negotiations with Brussels over its exit. More
dangerously, the United Kingdom could end, as Scotland ponders another
referendum. Such a dismantling would dramatically reduce the power and
stature of one of our closest allies. Former prime minister Margaret Thatcher correctly observed, The Anglo-American relationship has done more for
the defense and future of freedom than any other alliance in the world.
ANDREW ROBERTS: NATO STANDS GUARD
Britains decision to leave the European Union does not have anything like
the security ramifications for the West that its opponents liked to pretend
during the recent campaign. A central part of the pro-remain campaign
was to try to terrify voters into believing that Brexit entailed dire security
implications, but the British public voted to leave anyhow, because they
understood that far from guaranteeing peace and security on the European
continent, the EU has been at best neutral in its effect, and it was always
NATO that has been the bedrock.
Apart from the French, the British have the only significant armed forces
in Europe, at a time when the Germans do not want to spend the money
necessary to make the European army a reality, and anyway are concerned
about doing anything further to antagonize Russias Vladimir Putin. Brexit
might therefore have actually strengthened NATO.
One sometimes hears the specious argument that the EU has kept the
peace because nations
that trade with each
When it comes to European security,
other seldom fight each
other. This flies in the
NATOnot the EUhas always been
face of thousands of
the bedrock.
years of history, when
nations have both traded with and fought against their closest adjacent
neighbors. In the modern world, one doesnt even have to be adjacent; Britains greatest export-import partner in 1914 was imperial Germany.
One cannot envisage so sclerotic, corrupt, bureaucratic, and unwieldy an
organization as the EU committing to anything like Article 5 of the North
Atlantic Treaty, which commits all signatories immediately to go to the aid of
any one of them who is attacked.

H O O V E R D IG E ST Fall 2016 43

THE SCOTTISH QUESTION: Scottish Labour leader Kezia Dugdale campaigns for Britain to stay in the European Union. Scotland, where voters overwhelmingly chose remain, faces uncertainty, with the possibility of another
Scottish independence referendum. [Danny LawsonZUMA Press]

The capacity for the EU to keep the peace in Europefor which it ludicrously won the Nobel Peace Prize in 2012was demonstrated during the
Yugoslav civil war in the 1990s, when over a quarter of a million Europeans
were killed over several yearseasily the worst bloodshed in Europe since
World War IIwhile the EU had minimum impact. Indeed, several distinguished historians have plausibly argued that it made matters worse.
By contrast, when NATO was finally permitted to intervene, the war was over
in a little over twenty-four hours after its jets bombed Serbia out of Kosovo.
Withdrawal of countries from the EU will not have a positive or negative
impact on Western security for the simple reason that the EU itself doesnt
have a positive or negative impact on Western security.
Remainers tried to make Leavers look like irresponsible warmongers for
wanting to remove Britain from the EU, and will doubtless make the same
argument for any other country that wants to escape its coils. Yet as time
goes on and nothing happens, the argument will lose its potency, assuming
of course that nothing is done to weaken the true organization the continent

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H OOVER DI GEST Fa ll 201 6

needs to thank, the one that ought to have won the Nobel Peace Prize: the
North Atlantic Treaty Organization.
RICHARD A. EPSTEIN: BUREAUCRACY IMPLODES
The decision to leave has vast ramifications for many aspects of British
life: economics, energy, the environment, immigration, a system of weights
and measures, and much more. The vote was a black and white decision in
a world filled with grays, with major advantages either way. Staying in the
EU would have ensured Britain access to continental markets, which is why
many, but by no means all, large firms and banks supported remain. But
staying also would continue to subject Britain to vast amounts of regulation
from the powerful Brussels bureaucracy, which extends its tentacles into
every nook and cranny of British and European life. Today, more law in Britain comes from Brussels than London.
The EUs power rests on the critical notion of harmonization. The union
subjects all member nations to uniform rules and regulations to ease the
burden on cross-border transactions. Uniformity surely has some advantages, but to classical liberals like myself, the advantages come at far too high
a price. To see why, it is critical to see how a federal system should work, best
exemplified by the US Constitutionnot as it is interpreted today, but as it
was understood in 1787.
Exitand equally importantly, the threat of exitimposes strong discipline on local governments, who know they will pay a heavy price if they
impose unwanted taxes and regulations on their citizens. People leaving
badly governed states like California, Illinois, and New York are putting real
pressure on local governments to mend their ways, without having to identify
the particular shortcomings that take place. Knock out the exit right and one
reduces the internal pressures for economic and social reform.
At the same time, it is important not to ignore the economic forces driving
Brexit. Open borders for trade are essential to economic development. The
movement of people across national lines is a much more complex problem
than the movement of goods, but this personal freedom also turns out to be
pro-competitive by allowing people to move across borders in search of greater economic opportunity. Speaking more generally, the nation that uses force
to contain its citizens has confessed to the deficient nature of its economic and
political order, especially since the cost of leaving ones nation is exceptionally
high. Exit rights force governments to reform themselves at home by whatever means it takes to keep the local environment more attractive.

H O O V E R D IG E ST Fall 2016 45

But all of these calculations have changed in light of the mass migrations
out of the Middle East, which make open borders a far more difficult issue.
There seems to be little doubt that this helped explain the sentiment in favor
of Brexit. Indeed, it threatens to unravel the rest of the EU as well. It is often
difficult to know whether
the benefits of immigration
Centralized control has meant
outweigh the costs. Immiunwise interventions can take hold
gration from unstable and
across the entire EU simultaneously. war-torn countries may well
carry greater perils than
The rest, alas, is history.
immigration from more
stable places. Yet, by the same token, it is just those people from war-torn
areas who may work hardest to preserve the set of local freedoms.
Yet even if immigration is kept to one side, the economic issues tend to favor
Brexit, given the massive overreach of the EU. The point of a common market is
to allow free movement across national borders of people, goods, services, and
capital. A common market with such modest aspirations leaves each nation free
to organize its internal production as it sees fit, knowing that its comparative
advantage lies in keeping those regulations that foster commerce and eliminating those that do not. The common market may insist that nationals from other
states be allowed to cross borders for purposes of trade, but it does not give
them the right to become citizens or permanent residents of other nations.
On this view, the great blunder of the EU was the shift from a free-trade
zone to a broader social and economic union, with an all-powerful bureaucracy. The larger number of nations meant greater heterogeneity among its
members. Yet, at the same time, the central government in Brussels sought
to do more than had ever been done before under the dangerous banner of
harmonization.
The bureaucrats in Brussels displayed strong tendencies toward central
planning, and thus pursued the naive assumption that the more regulation of
labor and capital markets, the better. The synergy between regulation from
the center and labor market rigidity in France, Italy, and Spain has taken
its toll. Centralized control meant that unwise interventions could not be
confined to particular countries, but could take hold across the entire EU
simultaneously. The rest, alas, is history.
Brexit should be understood as a way for the country to reconnect with
the rest of the world. But it also affects the nations that remain inside the
EU. The conventional wisdom is that Brexit will hurt the EU economically.
But perhaps not, if Brexit spurs the remaining members of the EU to rethink

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H OOVER DI GEST Fa ll 201 6

their positions. Free trade is a winner for all sides, whether Great Britain
remains in the EU or leaves itand the EU would cut off its nose to spite its
face if it imposed sharp trade sanctions on the British. The European Union
should realize that it needs Britain as much as Britain needs it.
MICHAEL S PENCE: AND NOW, LEADERSHIP
I dont believe that foreigners contribute usefully by issuing strong opinions
about how a countrys citizens, or those of a larger unit like the European
Union, should decide when faced with an important political choice. But
outsiders may be able to add some perspective.
In terms of the distribution of income, wealth, and the costs and benefits
of forced structural change, growth patterns in most of the developed world
have been problematic for the past twenty years. We know that globalization
and some aspects of digital technology (particularly those related to automation and disintermediation) have contributed to job and income polarization,
placing sustained pressure on the middle class in every country.
We also know that Europes ongoing crisis (more like a chronic condition)
has kept growth far too low and unemploymentespecially for youthunacceptably high. And
Europe is not alone.
The broad goal should be to restore
Developed countries
a sense of control and responsibilcitizens might be less
ity to electorates everywhere. It will
unhappy were there
require inspired leadership from all
evidence of a concerted
effortbased on genucorners of Europe.
ine burden sharingto
address these issues. In Europe, that would mean a multinational effort.
But, for the most partand again, throughout the developed worldeffective responses have been missing. Central banks have been left largely alone
with objectives that exceed the capacity of their tools and instruments, while
elements of the elite wait for a chance to blame monetary-policy makers for
weak economic performance.
Powerful forces operating beyond the control of elected officials are shaping citizens lives, leaving them feeling powerless. But while all countries
must deal with the challenges of globalization and technological change,
important elements of governance in the EU are beyond the reach of democratic institutions, at least those that people understand and relate to.
The situation in the eurozone is particularly unstable, owing to citizens growing alienation from a distant, technocratic elite; the absence of

H O O V E R D IG E ST Fall 2016 47

conventional economic adjustment mechanisms (exchange rates, inflation,


public investment, and so on); and tight limits on fiscal transfers, which send
powerful signals about the real boundaries of cohesion.
Brexit is a part of this larger drama. It is primarily about governance, not
economics. From a strictly economic point of view, the risks for both the
United Kingdom and the rest of the EU are almost entirely on the downside.
But if that was all there was to the issue, the outcome would be a foregone
conclusion in favor of staying.
In the face of non-monetary-policy responses that are somewhere between
deficient and nonexistent relative to the magnitude of the challenges, the
natural response in a democracy is to replace the decision makers and try
something different. After all, democracy is a system for experimentation, as
well as the expression of citizens will. Of course, the new may not be better
and could be worseperhaps significantly worse.
The British vote, along with similar strong centrifugal political trends elsewhere, should bring about a major rethink of European governance structures and institutional arrangements. The goal should be to restore a sense
of control and responsibility to the electorates.
It would require inspired leadership from all corners of Europeincluding
government, business, organized labor, and civil society, as well as a renewed
commitment to integrity, inclusiveness, responsibility, and generosity. That is
a tall order, but it is not an impossible one.
Reprinted by permission from the Wall Street Journal (Joffe); the Guardian (Garton Ash); Defining Ideas (Melzter, Epstein); Strategika (Roberts);
Top1000funds.com (Kotkin); the Washington Post (McFaul); the Boston
Globe (Ferguson); and Project Syndicate (Spence). All rights reserved.

Available from the Hoover Institution Press is


Americans and EuropeansDancing in the Dark: On
Our Differences and Affinities, Our Interests, and Our
Habits of Life, by Dennis L. Bark. To order, call (800)
888-4741 or visit www.hooverpress.org.

48

H OOVER DI GEST Fa ll 201 6

POLI T I C S

Alpha Dog Days


What this confusing presidential campaign has
unleashed.

By Bill Whalen

lenty of adjectives come to mind in describing this years presidential campaign: unexpected, intriguing, historic, paradigm
altering. Not to mention role-reversing.
In Hillary Clinton, Democrats have their oldest first-time nomi-

nee since before the Civil War. Clinton turns sixty-nine two weeks before Election Day; only a sixty-five-year-old James Buchanan, the partys choice in 1856
and the last former secretary of state to win the presidency, comes close.
That alone should make Democrats queasy: after Buchanans one failed
term, Republicans held the presidency for the next twenty-four years.
Besides queasy: confused.
This is, after all, the party that, in the Television Age at least, has venerated fortysomething dreamers, not septuagenarian pragmatists. John F.
Kennedy, Bill Clinton, and Barack Obama all were well under fifty at the time
of their victories.
Not that Republicans have their bearings in this election. In Donald
Trump, the GOP has gone with a nonpolitician for the first time since Dwight
Eisenhower in 1952. America liked Ike; Republicans do and dont like Trump.
The flamboyant businessman received 13.3 million votes during primary
seasonrecord support, as hes fond of reminding audiences. What Donald
Trump conveniently omits: his three closest rivals combined received two
million votes morealso a historic first.
Bill Whalen is a research fellow at the Hoover Institution.
H O O V E R D IG E ST Fall 2016 49

So how did the two parties arrive at this pointDemocrats bidding


farewell to their youth and Republicans saying hello to a marriage of
inconvenience?
YEAR OF THE ALPHA DOG
Lets start with the Republicans.
From Ronald Reagan in 1980 to Mitt Romney in 2012, theres a pattern
to the GOP presidential selection process: with the exception of George W.
Bush in 2000, the GOP nomination has gone to a carryover from the previous
competitiontypically a runner-up with enough money and organization to
outmuscle, outmaneuver, and outlast the field.
This year, that pattern never materialized. Rick Santorum, the GOP runner-up in 2012, was a nonfactor from the outset; he didnt last beyond Iowa.
Former Florida governor Jeb Bush, the nominal front-runner and establishment favorite, spent $150 million and collected all of three delegates; he quit
the race three weeks after Santorum, following a fourth-place finish in the
same South Carolina primary that had been a springboard for his fathers
and brothers candidacies.
Entering the void created by the lack of a Republican alpha dog was
Donald Trump. His call for a Mexican border wall and screeds against the
political class drove the primaries narrative. The medias fascination with his
campaign made it difficult for his rivals to gain traction.
Trump stumbled upon a winning formula: plurality wins in primaries,
majority hauls of delegates.
Could Trump have been denied the nomination? One can argue that the
Never Trump crowd was doomed by an excess of wealth: a seventeencandidate field with at least a half-dozen individuals whom the party establishment could live with as a nominee. Those six: Bush, New Jersey governor
Chris Christie, Ohio governor John Kasich, former Texas governor Rick
Perry, Florida senator Marco Rubio, Wisconsin governor Scott Walker.
An excess of options was not one of the Democrats defining traits in 2016,
much to Hillary Clintons delight. Her chief rival, Vermont senator Bernie

BERNED: Protester Ivan DelSol carries a cutout sign of Bernie Sanders outside
the Democratic convention in Philadelphia. Sanders may have endorsed Hillary Clinton in the end, but many of his supporters continued to be angry about
the primary races denouement. [Tom GralishPhiladelphia Inquirer]

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Sanders, was a devout socialist. She benefited from running in arguably the
weakest Democratic presidential field since Bill Clintons run in 1992.
And for this, the Clintons have Barack Obama to thank.
Under Obamas watch, Democrats have gone from 257 to 188 in the US
House of Representatives, from 57 to 44 in the US Senate, and from 20
to 19 in the number of sitting governors. In other words, there was no
Democratic bench to speak of in 2016no seasoned officeholder with a
record and stature to take on Hillary Clinton if he or she so dared (that
excludes Vice President Joe Biden, who might have run were it not for his
sons death).
1968 ALL OVER AGAIN?
Not surprising, each party entered the general election with tickets reflecting their vulnerabilities. The pairing of Trump and Indiana governor Mike
Pence has notable points. Trump wants to rewrite US trade policies; running
mate Pence, a former congressman, is a free-market hawk. Pence supported
the same US invasion of Iraq that Trump has denounced. While in Congress,
Pence was a proponent of entitlement reform; Trump has shown little interest in touching Social Security or Medicare.
Hillary Clinton and Virginia senator Tim Kaine, her running mate, dont
have policy gripes, but there are differences that underscore the Democrats
internal squabbles. For example, Kaine is considered a friend of the financial
industry; the Democratic platform wants to break up big banks. Well have
to wait for the election postmortems to learn why Clinton didnt opt for Ohio
senator Sherrod Brown, who, like Kaine, comes from a battleground state
but unlike Clintons choice is popular with the Feel the Bern movement.
Younger, more liberal, more idealistic Democrats disillusioned by a ticket
they deem too establishment? Sounds a bit like 1968. Then again, theres
much about this election
that harks back to one of
the most turbulent years in
The Democrats bid farewell to their
youth and Republicans say hello to a American history. The comparison isnt exact. Obama
marriage of inconvenience.
is far more popular in his
final year than was Lyndon Johnson (Obamas approval rating has hovered
around 50 percent; LBJ hit a rock-bottom 35 percent three months before
the election). Johnsons presidency was an albatross Hubert Humphrey
couldnt escape; Clinton is counting on Obamas charm to turn out his base of
young, black, and Latino voters.

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H OOVER DI GEST Fa ll 201 6

PICK ONE: Political buttons on sale during the Democratic conventions last
day reflect many of the causes and candidates that propelled the 2016 primary season. [Jeremy HoganPolaris]

Trump, on the other hand, is both Richard Nixon and George Wallace. Like
the late Alabama governor, Trump has tapped into a disgruntled white electorate polarized along racial lines (civil rights and desegregation in the 1960s;
illegal immigration in 2016). Like Richard Nixon, Trump recognizes the
potency of forgotten Americansa phrase both candidates wove into their
convention acceptance speeches to encapsulate a portion of the citizenry
resentful of economic stagnation, cultural decay, disrespect for the law, and
the loss of the nations prestige overseas.
It worked for Nixon in 1968he prevailed in the three-way contest with
43.4 percent of the vote (in 1992, Bill Clinton received 43 percent in his
three-way race against then-president George H. W. Bush and H. Ross Perot).
Could it work for Trump this time around?
That depends, in large part, upon the potency of two third-party spoilers:
Libertarian Gary Johnson and Jill Stein of the Green Party.
Johnson and his running mate, Bill Weld, are former Republicans from
New Mexico and Massachusetts, respectively. To this point in his political
career, Johnson has been defined by his advocacy of recreational marijuana.
H O O V E R D IG E S T Fall 2016 53

In this election, hes safe harbor for Republicans who disagree with Trump
on immigration (Johnson opposes the border fence and deportation), prefer
a flat tax to more traditional rate reduction, and want to abolish the Internal
Revenue Service.
Johnson also is an outlet
for Democrats who might
An excess of options was not one
see eye-to-eye with him on
declassifying drugs and
of the Democrats defining traits in
abolishing the National
2016.
Security Agency (Johnsons said hed deep-six a few other federal agencies, such as the Commerce
Department, HUD, and the Department of Education, if such legislation were
sent his way).
Stein and the Green Party are the Clinton campaigns headache. A practicing physician and a former Reform Jew whos now an agnostic, Steins agenda
includes transitioning to 100 percent clean, renewable energy by 2030, livingwage jobs for every American, guaranteed access to food, water, and utilities,
and health care and education as a right.
In other words, shes Sanders with a stethoscope.
THIRD-PARTY FAILS
This isnt to suggest that either Johnson or Stein has a shot at becoming
Americas forty-fifth president. Theodore Roosevelt and the Bull Moose ticket received a shade under 27.4 percent of the vote in 1912the gold standard
for any third-party run but still a distant second in that election (the winner,
Woodrow Wilson, received 41.8 percent).
As for Electoral College impact, that honor also goes to Roosevelt, with
eighty-eight. Strom Thurmond and the Dixiecrats
Younger, more liberal, more idealmustered thirty-nine elecistic Democrats disillusioned by a
toral votes in 1948; George
ticket they deem too establishment? Wallace took home forty-six
in 1968.
Sounds a bit like 1968.
But bear in mind: in more
recent elections, third-party spoilers are all about quality, not quantity. Ross
Perot received almost 19 percent of the vote in 1992 and not a single electoral
vote. But by tapping into frustration as Trump does todaytrade deals, sputtering economy, and a distaste for establishment politicianshe crippled the
elder George Bushs hopes for re-election.

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H OOVER DI GEST Fa ll 201 6

Then theres 2000 and a Ralph Nader candidacy that was a small tremor
nationwidezero electoral votes, only 2.74 percent of the votebut a seismic
event in a select few states. Take Naders vote totals in Florida and New
Hampshire and move them into Al Gores column, a safe assumption as
Nader was running under the Green banner, and its Gore, not George W.
Bush, fighting the war on terror.
History has a funny habit of tossing curveballs. Political scientists survey,
analyze, and scour the landscape in search of certainty. And yet an oddduck businessman from Dallas (Perot), a career consumer-safety advocate
(Nader), or an outlandish developer with a special genius for self-promotion
in the age of social media and insta-fame (you know who) throws a monkey
wrench into Oval Office redecorating.
Headache-inducing? You bet. But just wait until this campaign finally ends
and we head into the next election cycle.
Special to the Hoover Digest.

Available from the Hoover Institution Press is The


Crusade Years, 19331955: Herbert Hoovers Lost
Memoir of the New Deal Era and Its Aftermath, edited
by George H. Nash. To order, call (800) 888-4741 or visit
www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 55

P O L I TI CS

The Demagogues
Move In
The Democrats and the Republicans: two of the
oldest, most storied political parties in all of
history. Hoover fellow James Ceaser on how they
got put up for rent.

By Emma Green

redictions are dangerous business, especially in the hall of mirrors that American politics has become. Suffice it to say, no one
called this US presidential election cyclenot Donald Trump, not
Bernie Sanders, not any of it.

Except, perhaps, in a roundabout way, a 1979 book about the presidential-

primary system. James Ceaser, a Hoover senior fellow and University of


Virginia professor, outlined the history and potential weaknesses of various
nomination processes, including one that largely relies on popular primaries.
Starting in the early 1970s, Democrats and Republicans began reforming
their primary-election processes, transferring influence over nominations
away from party leaders to voters. This kind of system is theoretically more
democratic, but it also has weaknessessome of which have been on display in 2016. When I spoke with a couple of conservative political-science
James Ceaser is a senior fellow at the Hoover Institution and the Harry F. Byrd
Professor of Politics at the University of Virginia and director of the Program on
Constitutionalism and Democracy. Emma Green is a senior associate editor at
the Atlantic.

56

H OOVER DI GEST Fa ll 201 6

professors about their field recently, one of them remarked, with just a hint
of envy, I expect Jim Ceaser to take a victory lap around the country saying
I told you so.
I spoke with Ceaser about Trump and the unintended effects of trying to
make democracy more democratic.
Emma Green, Atlantic: What has changed in the three and a half
decades since you published your book [Presidential Selection: Theory and
Development]?
James Ceaser: Not very much. The ideas [for reform] were laid in the
Progressive Era: to take control over the nomination process from the party
leaders and transfer it to a popular following within the party or even outside, in a primary. That was the fundamental transformation. It was finally
implemented fully in 1972 when the majority of the delegates came to be
chosen by primaries. Even in the nonprimary states, the caucuses reflected
public opinion.
It has gone through some modifications. There was lots of experimentation
with things like the order of the primaries. Theres been experimentation
with whether the primary should be winner-take-all or proportional.
But the essential changethe people are the source of the nomination
came in 72.
Green: Has there been any push to walk that back, so theres less influence
from popular primaries on who gets the nomination?
Ceaser: There was some modification of that deliberately in the Democratic
Party in the 80s with the Hunt commissionthey felt they had gone too
far in some ways. They pulled back a little bit and instituted these superdelegates, which was a way of making sure party officials would be at the
convention. In a marginal case, where it was close, there would be enough of
those to make a bit of a difference. Thats not quite the case this time, but its
made a bit of differencethe fact that Hillary Clinton collected most of the
superdelegates.
The difficulty of really walking it back substantially would be to ask the
American people to have a different conception of whats legitimate in the
nomination. [The parties] would have to be willing to come out and say, Were
no longer operating on the method of this full, open deliberation, and take
their chances about whether the American people would abandon the party.
Green: What are the downsides of a popular primary model?

H O O V E R D IG E ST Fall 2016 57

Ceaser: The argument made when parties were established was fear of
demagogy. Its a vague wordsometimes one mans demagogue is another
mans fate. But [it was fear of] popular appeals that emphasize emotionin
short, getting people elected who dont have the qualifications that people
think would be good for a statesman and leader.
When Woodrow Wilson proposed [a popular-vote nomination system], the
idea was that the types of appeals made to the public would be high-minded,
and we would have these very deliberative debates by great statesmen. The
minute this got under way,
though, people started
The essential changethe people
believing more in propaare the source of the nomination
ganda, public relations, and
advertising.
came in 72.
When you look at recent
races, you notice something in play: people for whom running for the presidency is their entry into politics rather than the capstone of a career. Jesse
Jackson, Pat Roberts, Pat Buchananthese people, even if they didnt win,
they got pretty far. This is the antithesis of what some had in mind originallythis shouldnt be an entry-level job.
Green: You lay out four goals that a selection system should ideally be able to
achieve:
1. It should promote candidates with presidential character,
2. the accession to power should be seen as legitimate,
3. the executive should have qualifications for the office, and
4. highly ambitious people should be prevented from taking office.
Has this happened this election cycle? Why hasnt our system been able to
produce a nomination process that supports these goals?
Ceaser: This is the danger of this fully popular system. Theres a higher probability that you could get a demagogic resultits ripe for that. And lo and behold,
thats what we have. Its the realization of the fear people had about this system.
There are disadvantages to a limited system, toono system is perfect. It
can become stale; it can protect too much of the status quo; it can fail to hear
messages that are surging up. This is a point that has been made in both the
Sanders and Trump phenomenathere is something the political class is
missing that became clear in this primary process. So its not as if one has all
the benefits and none of the disadvantagesits a mix.
The main concern going back to the founding period for presidential selection was, Can we block this dangerous demagogue? And in the 1820s, when

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H OOVER DI GEST Fa ll 201 6

we established political parties, they had the same concern: Can we make it
much less probable, by the institutions we set up, that this person can ever
get to the presidency?
Green: You talk about the way party leaders fall into line around whatever
the system produces. Its been interesting to watch that as Trump managed
to become the default Republican nominee.
How do you think the change from a system led by party elites to a system
led by popular primaries has shaped these dynamics?
Ceaser: This is the system we have. They cant stop this. The people have
spoken. Thats a very powerful moral force in our society. Thats why a lot of
them are falling in line.
They have other reasons, toopolitical reasons. They fear the opposite
party more. Theyre united in their distaste for Hillary Clinton. But its powerfullook, Trump is the winner. He won, fair and square.
Green: Is the choice really between party bosses and Trump-like demagogues?
Ceaser: Those are the
models of the two differThe difficulty of walking it back
ent systems weve had
would be to ask the American people
going back to the 1820s
to have a different conception of
something more party
whats legitimate.
oriented, and something
more popular oriented.
You can mix them a little bit. For example, in the period of the Progressive
Era up until the 1970s, you had some primariesso you got to taste a little of
what the people wantedbut the party still held control. You had a little bit
of both. And thats the superdelegate ideayou try to mix.
At this point in American history, the idea that the people should speak
is awfully strong. There are a lot of people in Washington today saying, Oh,
lets go back to closed systemnot only in parties, but in Congress. Do things
behind closed doors. To heck with transparencyits nonsense anyhow. The
problem they are going to run up against is, yeah, there are good arguments
for what they saybut are the American people going to swallow this?
Green: Do candidates always question the system in the way that Sanders
did during his campaign?
Ceaser: They will use that, because they know the underlying principle of
legitimacy people tend to back is of popular choice.

H O O V E R D IG E ST Fall 2016 59

[Sanders] didnt get a majority of the delegates selected by election. But


if he had, you could imagine how this would be: he makes the argument that
its rigged against him, and appeals to this idea of democracy as the more
legitimate principle. Trump made the same argument right before Indiana,
saying, Im going to get more delegates than anyone, no one is going to take
this away from me, we will
disrupt the convention,
things like that.
The idea was that appeals would
You also have two candibe high-minded, and we would have
dates
who werent members
these very deliberative debates by
of their party. Thats another
great statesmen. The minute this got
extraordinary thing: the
under way, though, people started
party used to say hey, we
believing more in propaganda, public control this, were going to
relations, and advertising.
pick the one that we want.
Now, a party at the national
level is kind of like a public utility. They dont have a basis even of limiting
who the candidates are to their own party. Bernie Sanders is not a Democrat.
He was a socialist. And Trump was really not a Republican. But they came in
and rented a party because thats the way the rules are set up.
Green: What do you mean by a public utility?
Ceaser: A party was a private organization that worked by its own rules and
had its own purposes. It wasnt obliged to run things according to popular
majority rule of all the people, but maybe majority rule of all the party memberspeople who have been important in the party.
By public utility, in a way, I mean [theyre] running an election by some
neutral ruletheyre just sort of running the election for the candidates.
Anyone can walk in, and the party cant really shape this very much. Parties
decided to do this on their own. Usually it works outmost of the time, youve
gotten good candidates out of itbut now its come to the point that they
havent been able to say, Well, we dont want this person because he hasnt
been a member of the party. You would think a party would be able to do that.
Green: Its sort of a Frankenstein effectthere was an intention of creating
one kind of creature, but it didnt really turn out this way.
Ceaser: Thats a fair characterization. If you go back to Woodrow Wilson and
others, you have the high-minded, popular statesmen. Not the bossesthe
best minds and leaders in the party vying against each other, putting forward

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H OOVER DI GEST Fa ll 201 6

their program and their ideas, and letting the mass of people in the party
make the decision, not the party leaders. That was the ideayoud have a
high-minded debate, and the people would decide, it would be highly legitimate because theres no stronger principle in a democracy than that the
people should rule. Instead of forcing people to make deals behind the scenes
and all that used to go on at conventions, they would articulate a program
and the best person would win. That was the hope.
This system puts an emphasis on oratorythats what Woodrow Wilson
had in mind. Even if you take it on that basis, what youve seen is a lot of public relations running these things, and money is playing a role. These factors
have produced the Frankenstein effect.
Green: Do you think Libertarians or any other third party have a chance?
Ceaser: I think the [major] parties get a lot from this system now. It penalizes third parties and makes it very difficult. But as for a third party winningits hard, but not impossible. Another reason that you havent had
third parties: possible third-party candidates under the closed system just
say, What the heck? Im not going to start a third party. Im going to go into
one of the major parties and take over and win. They do this all the time in
American politicsnot just the presidency, but at other levels too. And most
of these so-called third parties that weve had have mostly organized around
an individualsay, George Wallace in 68.
The Libertarian Party has been aroundtheyve been trying to build up an
actual party over the long term, and the better they do, the more that would
be a conceivable strategy. I just dont think theyre anywhere near a majority
of the American people.
Reprinted by permission of the Atlantic. 2016 Atlantic Monthly Group.
All rights reserved.

Available from the Hoover Institution Press is Ronald


Reagan: Decisions of Greatness, by Martin and
Annelise Anderson. To order, call (800) 888-4741 or
visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 61

P O L I TI CS

Too Much
Democracy?
Simple majorities were never meant to rule
Americans lives. How the founders limited
factions and fanatics.

By James Huffman

ere they alive today, most of Americas founders wouldnt


be surprised by the electoral successes of Donald Trump
and Bernie Sanders. Trump and Sanders both are products of political factions, which James Madison cautioned

against in Federalist No. 10:


By a faction, I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse
to the rights of other citizens or to the permanent and aggregate
interests of the community.
While interest might explain why some voters favored Sanderswith his
laundry list of promises, from free health care to free college educationthe
passionate support for both Trump and Sanders arose mostly from their
appeal to common impulse[s] of passion. Sanderss supporters resented
what he portrayed as a rigged economic system benefiting only the wealthy.

James Huffman is a visiting fellow at the Hoover Institution. He is the Erskine


Wood Sr. Professor of Law (Emeritus) at Lewis & Clark Law School.
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H OOVER DI GEST Fa ll 201 6

Trump backers fear that immigrants are stealing their jobs and that foreign
leaders are outsmarting incompetent American officials.
A pure democracy, explained Madison, can admit of no cure for the mischiefs of faction. But a republic, he continued, by which I mean a government in which the scheme of representation takes place...promises the cure
for which we are seeking. The framers believed that cooler heads would prevail if the peoples impulses were funneled through elected representatives
in government. And, in fact, representation was only one part of the founders remedy for the mischiefs of faction. They also separated the powers of
government among three branches; established a Senate in which states, not
people, have equal voice; established the Electoral College rather than direct
popular vote for the selection of the president; divided powers between the
national and state governments; and allowed that individual rights would
prevail over national (and later state) power.
Writing in 1959, Pulitzer Prizewinning journalist Felix Morley asked,
How is it...that a form of government so politically undemocratic as that of
the United States, should nevertheless be habitually referred to as a democracy? Over the succeeding half century, Americans and our leaders have
become even more insistent that the core value of our constitutional system
of government is democracy. When Trump and Sanders claimed that the
system is rigged, they meant that the will of the voters is somehow being
frustrated. But while Hillary Clintons support from superdelegates might
seem unjust to Sanders supporters, its the sort of constraint on pure democracy that Madison defended in Federalist No. 10.
INDIRECT POWER, BY DESIGN
Were those who wrote and ratified the Constitution around today, few would
object that Clintons superdelegates or a scheming party establishment were
breaking faith with the
core principles of AmeriDemocracy, better than any other
can constitutionalism.
form of government, allows indiAs the historian Jackson
Turner Main observed
viduals a sayan expression of their
in writing about the anti- private libertyin decisions of the
Federalist opposition to
community.
the proposed Constitution, among those assembled in Philadelphia there were none who spoke out
clearly for democracy. Over the brief life of the Articles of Confederation,
under which state legislatures functioned with few constraints, the framers

H O O V E R D IG E ST Fall 2016 63

learned firsthand about the hazard of factions, or what the founding generation often referred to as the licentiousness of the masses. As a result,
they designed a government in which the people exercised no direct power
and only representatives to the lower chamber of Congress were selected
by popular vote. And although the Seventeenth Amendment provides for
popular election of members of the Senate, individual senators continue to
represent vastly disproportionate numbers of voters.
Recurrent proposals to abandon the Electoral College in favor of the popular vote reflect the persistent notion that our country is, first and foremost, a
democracy. But the case for pure democracy is no stronger today than in 1787.
Factions and the tyranny of the majority remain threats wherever democracy is unconstrained. Witness the sad fates of Germany under Adolf Hitler,
Zimbabwe under Robert Mugabe, the Philippines under Ferdinand Marcos,
Venezuela under Hugo Chvez, Bolivia under Evo Morales, and Russia under
Vladimir Putin, all democratically elected leaders. The lesson, in the oftquoted words of Winston Churchill, is that democracy is the worst form of
government except all those other forms that have been tried from time to
time. As the foregoing examples underscore, democracy can fail with horrific consequences.
The case for democracy is not that majorities should define the public
goodthat over half of voters should have the authority to dictate to their
fellow citizens. Rather, the case for democracy is that, better than any other
form of government, it allows individuals a sayan expression of their
private libertyin decisions of the community. As historian Gordon Wood
writes in The Creation of the American Republic:
Public liberty was thus the combining of each mans individual
liberty into a collective governmental authority, the institutionalization of the peoples personal liberty, making public or political
liberty equivalent to democracy or government by the people
themselves.
Our constitutional founders preferred limited democracy as a form of government founded in individual liberty yet insulated against factional abuses
of liberty. The democratic republic they created is by no means a guarantor
of private liberty, but its the best they could do.
TYRANNIES OF BARE MAJORITIES
Sadly, our embrace of democracy as the core value of our Constitution has
led us to accept constraints on liberty, often imposed by bare majorities, as

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H OOVER DI GEST Fa ll 201 6

the natural and proper outcome of government. We do not question that


winning 55 percent of the vote is called a landslide, notwithstanding that 45
percent of the voters favored a different candidate. In the primary season
that recently ended, a win by a few thousand votes warranted the same election night celebration as a win by hundreds of thousands of votes. Election
winners cannot resist spiking the ball in the end zone because they accept
that democracy is a winner-take-all contest.
Where democracy is limited by constitutional design, however, as American
democracy iswhere limited democracy is accepted as that form of government
least likely to violate the liberties of its citizensthe expressed preferences of
those who voted for the losing candidate are not discounted to zero. Although the
democracy-limiting constraints of the Constitution have been eroded over the
course of American history by executive excesses, congressional power grabs,
and judicial deference to both at the expense of individual rights, the Constitution remains a bulwark against the powerful forces of faction.
But primary elections are a different matter. They are, in important
respects, private affairs governed not by the Constitution but by rules promulgated by the political parties. Of course, the millions who supported Trump
and Sanders in the primaries had no interest in being rescued by the party
establishments. The factions exhibited equal passion in support for their
candidates, precisely the risk Madison warned against. Of course, the political
parties and our elected leaders should not ignore or dismiss the passion. There
is clearly much dissatisfaction on both the left and the right. But if a belief in
pure democracy leads us to allow factions of either the left or the right to rule,
we will have sacrificed the very liberties democracy is meant to preserve.
Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is The New


Deal and Modern American Conservatism: A Defining
Rivalry, by Gordon Lloyd and David Davenport. To order,
call (800) 888-4741 or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 65

P O L I TI CS

The Walking Dead


Continually revived by unprincipledor ignorant
US politicians, socialism is a zombie idea.

By Paul R. Gregory

resident Obamas impromptu remarks to a Latin American audience last spring provided a fleeting glimpse into how the American left is preparing mainstream America for socialism.
In his unscripted talk in a town hall meeting in Argentina, Obama

downplayed the sharp division between left and right, between capitalist and
communist or socialist. Notably, Obama characterized such divisions as of
the past, as if they do not exist anymore. Per Obama, we supposedly live in a
postmodern ideology-free world. Although capitalist-socialist-communist divisions are interesting intellectual arguments, he advised the young people of
Argentina: You dont have to worry about whether it neatly fits into socialist
theory or capitalist theoryyou should just decide what works.
As an illustration, Obama praised Cubas universal health care system as
a huge achievement while regretting that Cuba is a very poor country.
Obamas implication: if Cuba just picked and chose wisely, it could have both
its medical care system and a prosperous growing economyno changes in
the political system necessary.
So what to do in such a post-ideology world? According to Obama, we
must create new forms that are adapted to the new conditions that we live
in today. Although economies rooted in market-based systems are the
most successful, a market does not work by itself. It has to have a social
Paul R. Gregory is a research fellow at the Hoover Institution. He is the Cullen
Distinguished Professor of Economics at the University of Houston and a research
professor at the German Institute for Economic Research in Berlin.
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H OOVER DI GEST Fa ll 201 6

and moral and ethical and community basis, and there must be inclusion.
No system is perfect; so we must craft an economic system that uses market
forces to produce results that are inclusive and socially, morally, and ethically
correct. In Obamas value-free world, practical judgments of what works
should replace ideological considerations.
CORE VALUES
Obama appears not to understand that ideology is alive and well and shapes
life in profound ways. Societies are based on core ideological principles that
cannot be randomly combined according to what works.
Economic, political, and social systems are like three-legged stools. The
three legs of the capitalist or free enterprise stool are democratic/pluralistic public choice, a noninterventionist state, and a rule of law that protects
personal and economic liberty. The three legs of the socialist stool are a oneparty state, pervasive intervention in economic affairs, and a lack of a rule of
law to guard personal and economic freedom.
The capitalist stool stands higher and is more stable than its socialist counterpart. Centuries of history show that capitalist, free enterprise economies
have been able to grow, provide rising living standards, and innovate technologiescontrary to Karl Marxs belief they would inevitably collapse.
Consider Germany and Korea. At the time of separation, North and South
Korea had the same per capita income. Today, the communist North has
the same subsistence income as sixty-five years earlier while the capitalist
Souths has increased tenfold with a thriving middle class. When the Berlin
Wall fell in 1989, curious West German visitors to the elite Wandlitz housing
compound were surprised that East Germanys top leaders did not live much
better than they. In fact, their greatest privilege was a store stocked with
West German goods within the compound grounds.
Even the countries cited by the left as positive examples of democratic
socialismSweden and Denmarkgained their affluence through a century
of free enterprise growth, and they revert back to first principles when they
stray too far from the model.
What Obama fails to understand is that a societys core values will constrain its policy landscape. A rule of law challenges the power of dictators,
both communist and of other stripes, such as Russias Vladimir Putin.
Limited government does not produce results that Obama and his ilk accept
as moral, ethical, and inclusive. Capitalist welfare states that go overboard
on redistribution and fairness lose the efficiency of the market economy. The
freedom of entrepreneurs to start businesses and for corporations to work

H O O V E R D IG E ST Fall 2016 67

in the interests of shareholders conflict with a communist/socialist states


control of the economy.
SOVIET MELTDOWN
The Soviet Union is another good example of how Obama is wrong. The Soviet
experiment with state ownership, national economic planning, and Communist
Party dictatorship was the greatest failure of the twentieth century. Communism
burst on the world scene with the Bolshevik Revolution of 1917 and Stalins forced
industrialization of the 1930s. The leaders of the Soviet Union vowed to bury
capitalism. Their promise of rapid growth, victory over poverty, and a worker
state captured one-third of the worlds population at its peak. Today, it accounts
for a fraction of 1 percent because its sixty-year experience revealed Soviet-style
planning could not deliver its promises, and it could not be amended to do so.
When the Soviet leaders realized in the mid-1960s that the internal weaknesses of their communist system were sending them into a death spiral,
they did what Obama recently advised his Argentine audience. They decided
to take over what worked in capitalist systemsthe profit motive and
managerial freedomonly to have vested interests reject these capitalist
reforms, much as a living organism rejects a foreign transplant.
Twenty years later, reform communist leader Mikhail Gorbachev decided
to restructure the Soviet economy into a new form of socialism with a
human face. He allowed political dissent, destroyed the central planning
system, and freed up enterprises, while continuing to
In President Obamas value-free
set prices, refusing to give
world, practical judgments of what
market forces free rein, and
failing to establish a rule of
works should replace ideological
law. The result was a huge
considerations.
black hole, which sucked the
remnants of the Soviet planned economy into a world of chaos that plagued
Russia for decades. Notably, Gorbachevlike Bernie Sanders todaycited
Sweden and Denmark as his model.
THE CHINESE EXPERIMENT
Chinas unprecedented growth after 1978 was due to its opening to the world
market, free enterprise zones, and the mobility of migrant workers. Despite
its monumental growth, China remains a poor country. As China struggles to
escape the middle-income trap, it must increasingly introduce to its economy
what works from the capitalist experience.

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H OOVER DI GEST Fa ll 201 6

The features of the Chinese economy that do not work are well known.
Foreign companies complain of arbitrary treatment and the lack of protection afforded by the rule
of law. Instead of relying
on courts to adjudicate
Centuries of history show that capitalclaims, they must seek
ist economies can grow, provide rising
powerful patrons to
living standards, and innovate techprotect them from caprinologiesin defiance of Karl Marx.
cious behavior. Chinese
entrepreneurs face expropriation, arbitrary claims against their assets, or
even arrest for corruption. Instead of growing their businesses, they move
themselves and their families abroad to live in a more protected environment.
Corruption emanating from the Communist Party must be tamed, freedom of
information must be ensured, and a true rule of law and protection of property rights must be introduced if China is to reach the next level.
Such necessary changes are not so simple to enact given the fundamental ideological building block on which socialism with Chinese features is
based: the dictatorship of the Communist Party. As amended in 2002, the
Chinese constitution states that
the Communist Party of China is the vanguard both of the Chinese
working class and of the Chinese people and the Chinese nation.
It is the core of leadership for the cause of socialism with Chinese
characteristics and represents the development trend of Chinas
advanced productive forces, the orientation of Chinas advanced
culture and the fundamental interests of the overwhelming majority of the Chinese people. The realization of communism is the
highest ideal and ultimate goal of the Party.
The Communist Party dictatorship is Chinas ideological core. Any capitalist ideas that challenge the partys leading role will be rejected just as they
were in the USSR.
If the rule of law were to trump the dominance of the Chinese Communist
Party, the law would become more powerful than the party. If citizens were
allowed to express their views openly and publicly, they could question why
the party, and not the people, is granted the leading role in society.
CUBAS SHELL GAME
Cuba is much like the USSR and China. The Cuban Communist Party is its
core ideological institution. Article 5 of the Cuban constitution states:

H O O V E R D IG E ST Fall 2016 69

The Communist Party of Cuba . . . the organized vanguard of the


Cuban nation, is the superior leading force of the society and the
State, organizing and guiding the common efforts aimed at the
highest goals of the construction of socialism and advancement
toward the communist society.
If the Castro brothers were to follow Obamas advice, they would replace their
communist planned economy with private enterprise. The Cuban state economy, however, is run as a military corporation by the armythe backbone of the
Castros power. The military is purported to control 60 percent of the economy
and receive 40 percent of Cubas foreign exchange. According to Obamas logic,
the Castros should introduce, along with free enterprise, a rule of law, property
rights, legal protections, and attractive conditions for foreign investment, and
allow a flourishing business class. These changes, though, would eventually spell
the end of the primacy of the communist regime and therefore will not happen.
The Cuban leaders instead focus their extremely limited resources on
universal health care to divert the attention of visiting heads of state (like
Obama) and provide ammunition for idealistic supporters in US college
dorms. One-party dictatorships concentrate on priority projects to gain
world acclaim. East Germany had its drug-induced Olympic champions.
Impoverished North Korea has its primitive nuclear bomb and missile programs. And the USSR had its space program and a defense establishment
that challenged the United States. Impoverished Cuba devotes 11 percent of
its GDP to public health, compared to the Caribbean and Latin American
average of 4 percent. It also should be noted that Cubas doctors-abroad
program is its major export earner. Cubas health care system is not only
good for the image. It is good business.
The shining baubles of military power, athletic success, and low infant
mortality distract from the few accomplishments and many failures of the
one-party, state-directed economies.
COERCION, AMERICAN STYLE
As a leftist transformative president, Obama believes that a big and intrusive
state works for the United States. Under Obama, the federal government
has used its coercive power to: require citizens to purchase products they
may not want (ObamaCare); harass citizen groups like the tea party; and
direct regulatory agencies to deliberately kill whole branches of the economy,
like coal, while promoting industries that cannot survive in a market setting,
such as green energy.

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H OOVER DI GEST Fa ll 201 6

Beyond these examples of coercion, most Americans do not understand


that their government has, and exercises, vast coercive power through
taxation and regulation. Rather, they associate coercion with communist
rulers such as Stalin, Mao, the Castros, and the Kim family dynasty. Americans rarely consider the coercive and punitive power that the state holds
over them.
The constitutional principle of limited government has been attacked
most intensely during the Obama, Lyndon Johnson, and Franklin Roosevelt
administrations. The Federal Registry of bills and regulations went from
14,500 pages in 1960 to a record 82,000 in 2015. Nondefense federal government spending rose from 8 percent of GDP in 1960 to 18 percent in 2016. A
count of federal agencies yields more than seven hundred departments, and
the federal government does not seem to know the exact number. The federal
tax code is 75,000 pages long.
Unlike communist systems that reject foreign transplants, affluent capitalist countries, such as the United States and some European nations, do not
automatically reject governments that have grown too large, too intrusive,
and too coercive. Vested interests play the system for special-interest legislation on both sides of the aisle. Elected officials promise limited government
but deliver the opposite. Costly legislation that yields narrow benefits can be
packaged as essential for the public good. The behind-the-doors machinations of the executive and
legislative branches have
Economic freedom is not about the
grown too complicated
privileges of the few but the opportufor voters to understand.
Rather they are left with
nities of the many.
the uneasy feeling that
the government is run for insiders and not for the people. Small wonder that
this system has in 2016 spurred the presidential candidacies of outsiders who
pledged to turn the establishment on its head.
Whereas communist/socialist systems have built-in alarms to protect themselves from private-enterprise institutions, limited government appears at
times defenseless. Indeed, the Fraser Institute Economic Freedom Index shows
that the United States has fallen from the sixth freest economy in the world
when President Obama took office to eleventh place in 2016. Americas declining
score is related to rapidly rising government spending, subsidies, and bailouts.
Americas declining score, especially prominent in property rights and rule of
law, should be taken seriously. Countries that have higher scores enjoy wealth
and prosperity. As analyst Gene Epstein remarks: Since economic freedom is

H O O V E R D IG E ST Fall 2016 71

not about the privileges of the few but the opportunities of the many, incomes of
the very poorest are much higher in freer countries than in those less free.
Voters fall for the Obama/Sanders leftist promise of a system that combines
high living standards, innovation, and efficiency with state coercion to ensure
that the community (Obamas code word for societys have-nots) gets a fair
social, moral, and ethical shake. But such a system has never existed in history and never will. Our leftist professors apparently do not teach this fact to
the ardent young followers of Bernie Sanders on college campuses.
The elite media and liberal college campuses associate capitalism or
private enterprise with heartless corporations, greedy businessmen, and
inequality. They promote the leftist cause through political correctness,
which is designed to crush individualism and to promote uniformity of thinking to achieve its goals of equal results. These ideologies are not only incompatible with the best economic results for all citizens, but at their extremes
are incompatible with an educated and enlightened population. How can an
educational system that teaches that Maos Peoples Liberation Army (not the
United States) defeated Japan or that Chinas invasions of Vietnam and Tibet
were defensive, or that ignores the thirty million famine deaths of the Great
Leap Forward, produce an educated population?
Obamas subtle message with pick and choose what works is that socialism is as good as capitalism or, better put, that state coercion is just as good
as individual freedom. Pragmatism, evidence, and basic logic are, of course,
contrary to this view.
The author is grateful to Thomas Mayor and Richard Mayor for their comments
on this essay.
Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is


Democracys Dangers and Discontents: The Tyranny
of the Majority from the Greeks to Obama, by Bruce S.
Thornton. To order, call (800) 888-4741 or visit www.
hooverpress.org.

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H OOVER DI GEST Fa ll 201 6

T H E M I LI TA RY

Warriors and
Citizens
Civilians either thank him for his service, and let
it go at that, or ignore him altogether. Its time for
Americans to get to know the soldier next door.

By Rosa Brooks

ost Americans know


roughly as much about

Key points

the US military as they

Civilian connections to the


military are dwindling.

know about the surface

of the moon. It is not that Americans


dislike the militarymost of us support
it wholeheartedly. It is just that we do
not have a clue who is in it, what it does,
what it costs those who join it, or what
current US military policies cost usas
a nation or as a democracy.
Manifestations of public support for
the military are everywhere in post-9/11
America. Troops are treated to special

Members of the military tend


to feel estranged and misunderstood.
Even personnel who never see
combat make sacrifices, both
personal and financial.
Todays soldier is both mature
and well-educated, compared to
the average American.
The military remains an important source of upward mobility for many Americans, particularly women and minorities.

discounts at chain stores and a constant


Rosa Brooks is a professor of law at Georgetown University, a senior fellow at the
New America Foundation, and a columnist for Foreign Policy. She is a contributor to Warriors and Citizens: American Views of Our Military (edited by
Kori N. Schake and Jim Mattis), from which this essay was adapted.
H O O V E R D IG E ST Fall 2016 73

barrage of Thank you for your service! Airlines invite military personnel to
board before other passengers, schools arrange for children to send greeting
cards to wounded warriors, and employers tout their commitment to hiring
military veterans at Hire a Hero job fairs.
But though support for the troops has become a kind of American civil
religion, these ritualized gestures sometimes seem only to emphasize the
distance between the military and civilian society. As James Fallows noted in
a 2015 Atlantic article titled The Tragedy of the American Military, nearly
10 percent of the US population had been in uniform by the end of World War
II. Today, it is quite different. Speaking at Duke University in 2010, former
defense secretary Robert Gates was blunt: For a growing number of Americans, he said, service in the military, no matter how laudable, has become
something for other people to do.
The majority of living veterans served in wars that most Americans now
consider part of our history, not part of our present. Not coincidentallyand
despite nearly fifteen years of waryounger Americans are far less likely
than older Americans to have a member of their immediate family in the
military. More than 75 percent of Americans over sixty have had a member
of their immediate family serve in the military, compared to 40 percent of
Americans under forty,
and only 33 percent
Enlisted personnel in combat occupaof Americans under
thirty. Looking only at
tional categories made up less than 13
more recent periods
percent of the active-duty force.
of military service, the
numbers tell a story of dwindling civilian connections to the military: in the
2014 YouGov survey population, only 19 percent of Americans said they had
served themselves or had an immediate relative who served in the military
after 1991, and only 15.6 percent had served or had an immediate relative
serve after September 11, 2001.
What is more, military service has largely become a hereditary profession
in modern America: the children of military veterans join the military at a
significantly higher rate than those without a parent who served do.
Meanwhile, base-relocation policies have isolated many military personnel
and their families in a small number of US states and regions. Half of all activeduty military personnel are now stationed in only five states: California, Texas,
Virginia, North Carolina, and Georgia. Partly as a consequence of these policies, over the past few decades the military has become more Southern, less
urban, and more politically conservative than American society as a whole.

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H OOVER DI GEST Fa ll 201 6

WATCHFUL: A sailor stands on the deck of the amphibious transport dock


ship USS Arlington. Members of the military say civilians understand and
care little about what they do, despite superficial gestures of support. Since
9/11, only 15.6 percent of Americans have served in the military or had an
immediate relative serve. [Mass. Comm. Specialist 2nd Class Stevie TateUSN]

THE UNKNOWN SOLDIER


Certainly, many military personnel feel ignored or misunderstood by their
civilian compatriots. In its 2012 annual survey, the Military Times found that
more than 75 percent of all active-duty personnel and reservists agreed with
the statement, The military community has little in common with the rest
of the country and most civilians do not understand the military. There is
substantial truth to the latter clause, at least: ask the average American to
describe the basic structure of the military, estimate its size and budget,
guess the locations of forward deployed military personnel, or describe the
militarys activities, and you will get a lot of sheepish shrugs.
While a near majority of YouGov respondents say they think the military is
not isolated and a substantial number are not sure if it is isolated, majorities across all demographic groups in the YouGov survey, both military and
civilian, agreed that military culture and way of life...is very different from
the culture and way of life of those who are not in the military and that the

H O O V E R D IG E ST Fall 2016 75

military has different values than the rest of society. Speaking to West Point
cadets a few years ago, Admiral Michael Mullen, former chairman of the
Joint Chiefs of Staff, expressed a similar sentiment:
Our work is appreciated, of that I am certain. There isnt a town
or a city I visit where people do not convey to me their great pride
in what we do. But I fear they do not know us. I fear they do not
comprehend the full weight of the burden we carry or the price we
pay when we return from battle.
The price paid by those who go into battle has certainly been high: more
than seven thousand American military personnel have given their lives in
Iraq and Afghanistan, and more than
For a growing number of Americans,
thirty thousand
have been wounded.
says Robert Gates, service in the miliDeployments also
tary, no matter how laudable, has become
bring countless
something for other people to do.
intangible costs:
damaged or broken marriages, children growing up with absent parents, and
the psychological strain of separation, hardship, and danger.
Even within the military, however, these costs are unevenly distributed.
In 2003, for instance, enlisted personnel in combat occupational categories
(such as infantry, armor, artillery, or Special Forces) made up less than 13
percent of the active-duty force; the remaining 87 percent were in support
services, public affairs, transportation jobs, medical and scientific jobs,
human resources, engineering and construction, and so on. By 2013, even
after two lengthy wars, the percentage of enlisted personnel in combat specialties had inched up to 15 percent. For officers, the percentage held steady
at 15 percent over the decade from 2003 to 2013. The percentage of personnel in combat occupations varies substantially by service, as well: 28 percent
of enlisted Army personnel serve in jobs classified as combat positions, for
instance, compared to only 3 percent of Navy enlisted personnel.
To be sure, many military personnel in noncombat positions end up in
combat anyway: a truck filled with supply clerks can be ambushed or hit with
an improvised explosive device as easily as a truck full of infantrymen can.
But even when deployed in combat zones, most members of the military are
not tasked with fighting: instead, their jobs are to maintain vehicles, enter
data into computers, write articles for the base newsletter, monitor satellite
imagery, make sure the right number of meals have been ordered, and so on.

76

H OOVER DI GEST Fa ll 201 6

A solid third of military personnel have never deployed at all to the Iraq
or Afghanistan theaters, though deployment rates also vary substantially by
branch of service. As of 2011, the most recent year for which there are statistics available, some 27 percent of active-duty Army personnel had never
deployed to either of these conflicts, nor had 34 percent of Navy personnel, 41
percent of Air Force personnel, and 39 percent of Marines. Army personnel
were also far more likely than personnel in any other service to have endured
multiple deployments to combat theaters: 25 percent of Army personnel in
2011 had been deployed to Iraq or Afghanistan for three or more years, compared to fewer than 7 percent of sailors, airmen, or Marines.
Unsurprisingly, the Army has also taken the lions share of the casualties
from these wars: of the roughly 0.6 percent of military personnel deployed to
Afghanistan and Iraq who were killed in action in the decade after 9/11, more
than two-thirds were Army soldiers, and most of the rest were Marines.
SACRIFICES
Still, the sacrifices borne by all members of the military community are substantial. Even personnel who never see combat face the risk of doing so, and
face a punishing and often unpredictable training and rotation schedule. Military families too must make substantial sacrifices: they are constantly uprooted, with consequent costs to friendships, childrens performance in school, and
the ability of military spouses to build their own careers. War or no war, life in
the military is full of difficulties and disruptions
of a type borne by few
Only 30 percent of people over age
civilians with comparable twenty-five have bachelors degrees,
education and income
compared to more than 80 percent of
levels.
military officers.
There are plenty of
dangerous civilian jobsconstruction workers, truckers, loggers, miners,
and fishermen all have rates of fatal accidents approaching those of military
personnelbut tough as these jobs are, civilians can always quit. A logger who
does not like his odds can decide from one day to the next to become a Realtor;
a miner ordered into a situation he deems dangerous can tell the foreman to go
to hell. His pay may be dockedhe may be fired and face consequent economic
hardshipbut he will not go to prison for his refusal to risk his life.
This is not the case for service members. Yes, America has a volunteer
military, but once you sign up, there is no changing your mind until you have
fulfilled your service obligation. A soldier assigned to Fort Hood cannot decline

H O O V E R D IG E ST Fall 2016 77

the assignment because he does not think much of the Texas public schools; a
financial clerk ordered to deploy to Iraq cannot politely decline. Under the Uniform Code of Military Justice, disobeying a lawful order will land you behind
barsand desertion in wartime is still punishable by death. The Declaration of
Independence tells us that all men have the right to life, liberty, and the pursuit
of happiness, but those who volunteer for military service effectively give up
those rights. Once in the military, their lives belong to the nation.
Perhaps to their credit, polls suggest that a fair number of American civilians are aware of their ignorance of military matters. The diminishing percentage of Americans who serve or have family members who have served,
taken together with the shared military and civilian sense of being separate
cultures, is usually viewed as indicative of a large civilian-military gap. But
despite distinct differences in the experience of civilians and of those within
the military community, todays military is far less different from the general
public than many Americans tend to assume.
MATURE AND MIDDLE CLASS
Before going further, it is useful to look at a quick snapshot of todays military. Start with the basics, courtesy of the Department of Defenses annual
report on military demographics: there were roughly 1.4 million active-duty
military personnel in fiscal year 2013, along with 843,000 reservists. The
Army is the largest service (it is almost as large as the Navy and Air Force
put together, though it is currently drawing down; at the end of fiscal year
2014 there were 508,000 active-duty Army personnel). The Marine Corps
is the smallest service, with just under 190,000 active-duty personnel. More
than 14 percent of active-duty personnel are women, and 30 percent selfidentify as members of minority populations.
Todays military is relatively mature compared to the military of the Vietnam War or World War II. The average age of active-duty personnel is 28.6
years, and more than a quarter of officers are over forty. More than half of
active-duty personnel are married, and 36 percent are married with children.
(In contrast, only 48 percent of all US households are made up of married
couples, and only a fifth of US households are made up of married couples
with children.) Altogether, there are roughly three million military dependents (mostly spouses and children), and roughly 30 percent of military
personnel and their families live in military housing.
Todays military personnel are more likely than comparable age groups in
the civilian population to have graduated from high school (with rare exceptions, military recruits must have high school degrees or General Education

78

H OOVER DI GEST Fa ll 201 6

SIGN HERE: An Army sergeant waits in New York. In contrast to years past,
todays recruits present a surprisingand distinctly middle classprofile.
According to Pew research, Veterans who served on active duty in the post9/11 era are proud of their service (96 percent), and most (74 percent) say
their military experience has helped them get ahead in life....More than eight
in ten (82 percent) say they would advise a young person close to them to join
the military. [Andrew GombertEPA]

Development [GED] degrees to be eligible to serve). Military officers, meanwhile, are substantially better educated than civilians: only 30 percent of the
overall population over age twenty-five have bachelors degrees, compared to
more than 80 percent of officers.
Commentators often complain that elites (however you choose to define
them) are underrepresented within the military. In 2010, for instance, only about 1
percent of students commissioned through ROTC came from Ivy League schools.
But since the eight small Ivy League schools confer fewer than 1 percent of all
bachelors degrees granted in the United States, this is not particularly telling.
Todays military is distinctly middle class. In part, this is because military
requirements render many of the nations poorest young people ineligible:
H O O V E R D IG E ST Fall 2016 79

the poorest Americans are the least likely to finish high school or gain a
GED, for instance, and poverty also correlates with ill health, obesity, and the
likelihood of serious run-ins with the criminal justice system, all of which are
disqualifying factors for the military.
Individualized data on the economic backgrounds of military personnel are
not available, but several studies have looked at the income levels in the ZIP
codes new military recruits give with their home addresses. A 2008 Heritage
Foundation study found that a quarter of new recruits came from neighborhoods in the highest income quintile, with only 10 percent coming from
neighborhoods in the lowest quintile. A 2010 study by the National Priorities
Project examined slightly different data and found a less top-heavy distribution, but the largest share of recruits came from the middle-income quintile
nonetheless, with numbers in the top and bottom quintiles roughly even.
People join the military for
many reasons. Some people
Military service is largely a hereditary
sign up becausereared on
profession in modern America.
old World War II movies, or
maybe just on first-person-shooter video gamesthey want to go to war.
Others dislike the idea of going to war but believe that a strong military will
prevent war by deterring potential adversaries and want to be part of such a
deterrent force. Others still join up for reasons that do not have much to do
with the nature of the military: they are attracted by the militarys excellent
educational benefits and free heath care, they are looking for opportunities
to travel and learn, or they simply view the military as a relatively stable job
with benefits during economic hard times.
A 2011 Pew Research Center survey asked post-9/11 military veterans to
list the most important factors that had motivated them to join the military.
Nearly 90 percent listed serving the country as an important reason for
joining, and 77 percent listed educational benefits as important. Upwards of
60 percent said they wanted to see more of the world, and 57 percent said
learning skills for civilian jobs was an important factor. In contrast, only 27
percent said difficulty finding a civilian job had been an important factor in
the decision to join the military.
That said, the military remains an important source of upward mobility for
many Americans, particularly women and minorities. Contrary to much popular mythology about dysfunctional vets, most veterans do pretty well economicallybetter than comparable nonveterans. Overall, veterans are less likely
than nonveterans to be unemployed, are less likely than nonveterans to live
below the poverty line, and have higher median incomes than nonveterans.

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H OOVER DI GEST Fa ll 201 6

This doesnt mean that specific subsets of the veteran population dont
struggle. Veterans are overrepresented among the homeless, for instance,
and post-9/11 veterans have above-average unemployment ratesthough
this may simply reflect transition issues. Transition issues are, unfortunately,
common: according to the 2011 Pew survey, 44 percent of post-9/11 veterans
say the transition to civilian life was difficult for them.
Overall, however, post-9/11 veterans are a surprisingly contented group.
Across the board, Pew found: Veterans who served on active duty in the
post-9/11 era are proud of their service (96 percent), and most (74 percent)
say their military experience has helped them get ahead in life. The vast
majority say their time in the military has helped them mature (93 percent),
taught them how to work with others (90 percent), and helped to build selfconfidence (90 percent). More than eight in ten (82 percent) say they would
advise a young person close to them to join the military.
Given all the recent media attention to military sexual harassment and
assault rates, it is worth noting two things: first, though any amount is too
much, rates of sexual assault and harassment do not appear to be higher in
the military than in comparable civilian settings such as universities. Second,
Pew found that post-9/11 female veterans were just as likely as their male
counterparts to say they
have experienced the
Nearly 90 percent of post-9/11 veterpositive benefits of milians listed serving the country as an
tary service. Seventyimportant reason for joining.
nine percent of female
veterans believed their
military service had helped them get ahead in life, 87 percent said serving
in the military had built their self-confidence, and 93 percent felt the military
had helped them grow and mature as a person.
A BLURRIN G OF IDENTITY
Todays military is a strange sort of animal. It is at once idealized and
ignored, celebrated and mistrusted. It is the most impressive public institution we have, but it is increasingly unsure of its own raison detreand
increasingly ill equipped, despite a wealth of internal talent and external
support, to tackle todays most pressing challenges.
If we want a military that is strong, capable, and responsive to Americas
changing needs, we will need to rethink many of our most basic assumptions
about the military and its role. In a world in which the contours of war and
warfare are no longer clear, and many tasks assigned to the military seem

H O O V E R D IG E ST Fall 2016 81

increasingly nonmilitary, we need to consider whether we are distributing


authority and funding in a sensible way. If our political leadership is unwilling
or unable to rebuild the capabilities of the civilian foreign policy sector, we
need to accept that our military will probably be in the business of development, diplomacy, and governance for the long term, whether we like it or
notand we will need to adapt recruitment, training, education, and everything else along the DOTMLPF (doctrine, organization, training, material,
leadership, personnel, and facilities) spectrum accordingly.
If we cannot meaningfully draw lines between military and civilian tasks,
we need to rethink our assumptions about the nature and purpose of civilian
control of the military, the relationship between civilian and military leaders,
and the accountability mechanisms designed to ensure the responsible use
of power. We will also need to consider how to maintain a sense of military
identity and morale in a world in which roles have grown increasingly blurry.
The paradoxes characterizing modern US civil-military relations will not
be easily resolved, and debates about the nature and consequences of civilmilitary gaps will surely continue. Some will demand that the military change
to become more like civilian society; others will demand that civilian society
become more like the military. Regardless, we should never forget a basic
truth: love it or hate it, the US military does not exist in a vacuum but is a
product of our culture and our collective decisions.
Whatever it is, it is what we have made it.
Adapted from Warriors and Citizens: American Views of Our Military,
edited by Kori N. Schake and Jim Mattis (Hoover Institution Press, 2016).
2016 by the Board of Trustees of the Leland Stanford Junior University.
All rights reserved.

New from the Hoover Institution Press is Warriors and


Citizens: American Views of Our Military, edited by
Kori N. Schake and Jim Mattis. To order, call
(800) 888-4741 or visit www.hooverpress.org.

82

H OOVER DI GEST Fa ll 201 6

T H E M I LI TA RY

Ready or Not? Not


How budget cuts and shortsighted thinking have
gutted both our capacity and our readiness.

By Thomas Donnelly

or the past several years, members of the Joint Chiefs of Staff


have been painting a bleak portrait of the state of the armed
services. Testifying to the Senate Armed Services Committee in
January 2015, thenArmy chief Ray Odierno admitted that Army

readiness has been degraded to its lowest level in twenty years. This year,
General Odiernos successor, General Mark Milley, went further, asserting
that the Army is not well prepared to engage a major power. If we got into a
conflict with Russia, then I think it would place our soldiers lives at risk, he
said.
Other service leaders have made similar statements regarding other
potential adversaries, including China, Iran, and North Korea.
We have a lot of not availables in the force right now, Milley said in his
April testimony, underscoring that force readiness is a multiple of sufficient
personnel, serviceable equipment, adequate training funds, and time, along
with a host of other factors. The Navy, for its part, has a constantly growing
backlog of deferred ship maintenance. A recent television report profiled a
Marine F/A-18 Hornet squadron that had to wait eighteen months for spare
parts and was constantly cannibalizing parts from one plane to another. Only
half of Air Force fighter pilotsincluding those who fly the top-of-the-line
F-22 Raptorreceive the full required training.
Thomas Donnelly is a member of the Hoover Institutions Working Group on
the Role of Military History in Contemporary Conflict. He is the co-director of the
Marilyn Ware Center for Security Studies at the American Enterprise Institute.
H O O V E R D IG E ST Fall 2016 83

It is small wonder then that the chairman of the Joint Chiefs, Marine general Joseph Dunford, agreed with the conclusion drawn by Representative
Mac Thornberry, the chairman of the House Armed Services Committee,
that we have a significant readiness problem across the services, especially
for the wide variety of contingencies that weve got to face.
How did this happen? How is it that a military that should be recovering,
now that the wars of the post-9/11 era have ended, is in such poor condition?
In fact, the US military has been caught in a storm that has been gaining
strength for decades. While the tempest has reached hurricane force during
the Obama years, the underlying patterns go back to the mid-1980s.
THE NOTORIOUS SEQUESTER
Let us begin by dividing the Obama years into two periods, the more recent
shaped significantly by the 2011 Budget Control Act
which means that the greatest damage done
to the US armed services

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H OOVER DI GEST Fa ll 201 6

[Taylor Jonesfor the Hoover Digest]

H O O V E R D IG E S T Fall 2016 85

is the result of a bipartisan agreement between an extremely liberal Democratic White House and a hard-core conservative Republican majority in
the House of Representatives. The law, now shaping the fourth of the ten
budgets it is supposed to cover, is on track to reduce overall defense spending by about 20 percent from what President Obama planned in his original
2011 budget proposal, roughly a total of $1.5 trillion. There have been minor
adjustments to the original figures in the short-term budget deals struck
last year and in 2012, but they amount to less than $50 billion in relief. That
modest amount did not make up for the damage done in 2013, when, thanks
to a standoff between the White House and Congress, the laws sequestration
provision took effect.
Sequestration accelerated the downward spiral in military readiness in
ways that are now manifesting themselves. At one point, only 10 percent
of the Armys forty-plus
active brigadesa total
The White House has lowered the
now reduced to thirty
bar of military sufficiency.
brigadeswere fully ready.
The budget cuts hit hardest
at the small-unit level: personnel review boards had to cut 30 percent of the
captains who had joined the Army during the Iraq surge years. The Navy had
to extend ship deployments at the same time it was reducing its maintenance
to just 57 percent of what was needed. The Air Force grounded thirty-one
flying squadrons.
At the same time, the Obama administration worked to lock in the
reduction in military capacity and capability in two related ways. To begin
with, it rewrote its defense strategy to rebalance or pivot to the Pacific. While this was spun as a response to Chinas military modernization
and increasingly aggressive posture in East Asia, the strategys biggest
effect was to pivot away from traditional US interests in Europe and the
Middle East.
More-limited strategic aims allowed for a reduction in the long-standing
Pentagon framework for force size. Since the end of the Cold War, previous administrations of both parties had accepted that as a global power, the
United States had to be prepared to fight two large-scale wars at the same
time. By withdrawing from the Middle East and declaring Europe to be
eternally at peace, the White House substantially lowered the bar of military
sufficiency.
Since the president issued his defense planning guidanceand,
at the time, both the White House and the Pentagon boasted about

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H OOVER DI GEST Fa ll 201 6

Obamas personal involvement in the processthe world has defied


these planning assumptions. Back in 2012, Vladimir Putin had not yet
annexed Crimea, invaded eastern Ukraine, nor intervened in Syria.
The Islamic State did not exist, nor had Iran embarked on its effort to
subdue northern Arabia. China had not created artificial islands or built
military airfields on reefs less than one hundred and fifty miles from
Manila.
In other words, geopolitical realities have forced even the reluctant Obama
administration into a redeployment of forces even as it maintained its lowered planning standards, continued force reductions, and budget cuts. The
Republicans in Congress, despite winning a Senate majority in 2014, have
raised no serious objection. The result is yet another dip in overall force
readiness.
Perhaps the most notable single measure of the problem is the emptiness of the pivot of force to the Pacific. The combination of a shrinking
fleet and unforeseen commitments elsewhere has meant that the Navy
has never had sufficient presence in the western Pacific, most notably in
the South China Sea. In
the four years since the
Do more with less has been the
rebalanced strategy
was announced, the
motto of the postCold War military.
Navy has been unable
to position two aircraft carriers in that theater for even a single month.
In April, Secretary of Defense Ash Carter declared, as the carrier USS
John C. Stennis sailed through the South China Sea, We have been here
[in Asia] for decade upon decade. In fact, the Stennis, more than halfway
through its deploymenta tour billed as the Great Green Fleet because
of the Navys efforts to reduce its dependence on fossil fuelshad been in
the South China Sea for a mere week.
Even before sequestration hit, the US military was headed for readiness woes. In the first two years of his presidency, Obama directed more
than $300 billion in cuts to weapons procurements, most notably capping the size of the F-22 fleet at 187 aircraft instead of the 350 previously
planned (the original goal was 750). Its no accident that pilots dont have
enough Raptors to train with or that, in response to the Russian expedition to Syria, the Air Force has had to transfer F-22s from Alaskathat
is, from the Pacificto the Middle East. And now that those aircraft
have been sent home for refitting, the service is hard-pressed to replace
them.

H O O V E R D IG E ST Fall 2016 87

LESS IS LESS
To be fair, the Obama administration and its accountant accomplices on
Capitol Hill merely seized on opportunities created by previous presidents.
After the attacks of September 11, 2001, President George W. Bush chose to
fight his wars without any structural increase in US armed forces. You go to
war with the Army you have, lamented Secretary of Defense Donald Rumsfeld in 2014, not the Army you might want. It was not until Rumsfeld was
fired and the Iraq surge began in 2007 that the Bush administration asked to
expand the military.
Despite sizable increases in defense spending, very little was spent on
weapons modernization beyond procurements like the $30 billion for massive
Mine-Resistant Ambush Protected vehiclesuseful for convoys in Iraq, but
without much other purpose. Rumsfeld, who came to office determined to
impose a transformation of the American military, shortchanged current
programs like the F-22 and F-35 fighters, the Navys Zumwalt destroyer, and
essentially every system the Army had on the books.
But Rumsfelds task was made easier by the large budget and force reductions and so-called procurement holiday that began in the Clinton years.
The active-duty Army
in 1991 included 780,000
The world has defied our defense
soldiers; by the end of the
2018 budget year it could be
planning assumptions.
as low as 420,000. The Navy
had a little fewer than 500 ships; today it is on a path to 282. The Air Force
had 26 tactical fighter wingsof 72 planes eachand is headed for 13 wings
of 54 planes.
Finally, it should be noted that the demand for jointnessgreater interconnectedness among the separate armed servicesinstilled by the Goldwater-Nichols Act of 1986 has increased the overall readiness challenge. It is
remarkable that fighters based on an aircraft carrier in the Arabian Sea can
provide close air support to remote combat outposts in Afghanistan, but the
price tag and complexity of such operations are immense. The corresponding
cost of preparing to fight in a joint-service style is likewise larger than in a
more traditional, service-specific manner. Ironically, greater service autonomy would likely mean greater operational flexibility and combat readiness.
In sum, doing more with less has been the motto of the postCold War
military, and it should be no surprise that the result is not simply diminished
capacity and capability but diminished readiness. A force that is too small
can never catch up with demand. As the Armys Training and Doctrine
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H OOVER DI GEST Fa ll 201 6

Command admitted in a recent assessment: the Army is too small to protect


the nation and its interests abroad and to uphold US international obligations around the world.
The problems of preparedness are not apparent in small, short engagements: the invasions of Afghanistan and Iraq in 2001 and 2003 were lopsided
affairs. But these shortfalls of capacity crippled both post-invasion efforts.
As the service chiefs make plain, taking on any tougher adversary now also
would reveal shortfalls in capability. And that is the difference between an
incomplete victory and real defeat.
Subscribe to the online Hoover Institution journal Strategika (www.
hoover.org/publications/strategika), which analyzes issues of national
security in light of conflicts of the past. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is The War


that Must Never Be Fought: Dilemmas of Nuclear
Deterrence, edited by George P. Shultz and James E.
Goodby. To order, call (800) 888-4741 or visit www.
hooverpress.org.

H O O V E R D IG E ST Fall 2016 89

T H E MI L I TARY

How to Sustain
Our Military
Ships, shells, and boots on the ground: restoring
our armed forces is all in the details.

By Gary Roughead

he connectedness of the modern world, our interests in it, and


the singular stabilizing role of the United States make American
retreat from the world stage a very bad strategic option.
Its safe to assume that the Middle East, North Africa, and

Europe will remain unsettled and nests of terrorist activity, motivation, and
recruitment. Meanwhile, with the lifting of sanctions, Irans conventional
military re-emergence in the Middle East will further challenge the security
environment in that region. In Asia, northeast Asian allies, China, and the
United States will continue to react to an unpredictable regime in North
Korea. And Chinas increasing military heft will disquiet the broader IndoPacific region as Beijing and Washington continue their strategic dance of
cooperation and competition.
Although many continue to see a compelling need for the United States
to remain engaged militarily, US public opinion, after more than a decade of
war, will argue against even modest deployments of our sons and daughters
to foreign lands. Loud voices will reinforce that aversion, asserting that other
nations are not carrying their share of the load. Adding fuel to that argument
Admiral Gary Roughead (USN, Retired) is an Annenberg Distinguished Visiting Fellow at the Hoover Institution and a member of Hoovers Working Group on
the Role of Military History in Contemporary Conflict.
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H OOVER DI GEST Fa ll 201 6

will be the increasing reluctance of non-allies to host US forces on their soil


because of increasing sensitivity to a perceived loss of sovereignty.
Regardless of those attitudes, no other nation is ready and able to step up
to the global stabilizing role of the United States. That incumbency means
we must be ready for our time of continuing disorder. It cannot be business
as usual. We must broaden our imagination and get away from our recent
land-centric view of military force, our current bias that most future military
operations will be against Islamic State or a resurgent Russia, and the dangerous assumption that our military of tomorrow will be capable and ready.
BETTER TOOLS AND HOW TO USE THEM
Todays understanding and discussion of American military capability, capacity, and response is far too superficial. Debates go on about where and how
the US military should respond or where the American stabilizing presence
must be. But very few people confront the erroneous assumption that the US
military will be as capable and ready as in years past.
Our military, indeed any military, is what it buys in people (numbers, skills,
and competence), capital investments (ships, airplanes, ground force equipment, networks), and operating accounts (deployed operations, preparatory
training, and equipment maintenance). We acknowledge that erratic, unpredictable budget processes are hurting our military, but we allow that internal
disorder to continue. We
focus too much on the
Pay special attention to the entrance
total amount of defense
to the Red Sea and the Persian Gulf
spending as a measure
of efficacy and comChina and Iran already are.
mitment, and how that
figure can be attained through budget machinations. Some highly regarded
defense policy experts ignore the internal pressures on defense spending and
offer the simplistic solution of doing away with sequestration as if lifting
caps on defense spending and eliminating the illogical procedural constraints
of sequestration are the solution to our problem.
Absent a catastrophic event, American public opinion will be slow to
demand a more rigorous assessment of defense needs and fundingnor will
the budget floodgates be thrown open. Failure to dig into the details, particularly the amount available for capital investment, will leave our military
inadequately prepared for future security environments and events.
As we dig into those details, we must measure outcomes on two scales:
capability and capacity. The increasing complexity of warfare, the systems we

H O O V E R D IG E ST Fall 2016 91

use today, and the technology we must have demand capabilities better than
those of our adversaries. But while we must provide the very best to those
we send in harms way, our fixation on capability is squelching the discussion on capacitythat is, enough capital assets to deter, engage, and prevail.
Numbers still matter greatly. The United States has the great benefit of conducting military operations far from our shores, thus insulating our public
from conflict, but that distance increases the numbers of things we need to
provide credible, persistent forward presence.
How do we best approach Americas strategic responsibilities?
Get serious and call out the details of our defense budget. Cease fixating on the total, and honestly debate the trends in the budget categories of
personnel, capital investments, and operating accounts. Drive reform and
make the hard political decisions in personnel policy and compensation to
control those smothering costs while creating incentives for the skills and
competencies of the future. Face the reality that the investment account is
being eroded from within by growing personnel costs. If that squeeze is not
confronted quickly, our nations military capacity and the industrial base that
produces it will wither away.
Invest in our special operations forcesand their families. Theres
no switch to turn off ISIS and similar groups. The fight against them will be
a long slog. Our special operations forces will remain on point, and we must
invest in their resilience. They are the best of the best and have been at it a
long time; the future will be more of the same. They and their families must
have the attention and the resources to maintain the unforgiving pace and
nature of their deployments.
Refocus on the Eastern Mediterranean and the strategic sea-lanes of
the Middle East. The region is sure to become more challenging, not less.
Emphasize the value and importance of offshore presence in the Middle East
and pay special attention
to the entrance to the Red
Dont expect the budget floodgates
Sea and the Persian Gulf
China and Iran already are.
to be thrown open, no matter how
Our Navy, frankly, has been
compelling the need.
absent from the Mediterranean Sea even as disorder grows along its periphery and Russian naval
forces increase their presence. Return to a permanent US naval presence in
the Mediterranean. (Think about whether the attack on our diplomatic post
in Benghazi in 2012 would have gone differently had a Marine Expeditionary
Unit been offshore and ready, as was formerly the case.) In the mid- and long

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term, a sanctions-free Iran will have a great impact on the Middle Easts strategic sea-lanes and choke points, and on regional navies, as it recapitalizes its
navy and air force.
Honestly assess the types and quantities of naval and air forces needed in the Pacific and Indian Oceans. Forces must be equal to those vast
spaces and capable of reassuring allies and friends that we are the decisive
force in the region. Do not benchmark naval power as the total numbers of
ships in our Navy. Make the time, thoughtfully analyze, and have a meaningful discussion about the numbers and types of fighting ships and aircraft that
can address the area denial strategies taking shape in those regions.
Support the Armys current, commendable effort to redesign (my
term) its force of active, guard, and reserve. Support means overcoming cultural and bureaucratic inertia and providing the funds to train those
redesigned units for prompt and repeated deploymentsnot just in areas of
interest today but globally. Uncertainty defines the future.
Dont forget the mundane but essential dimension of military logistics. Regardless of how light the Army becomes, prompt sealift to move
heavier units will continue to underpin Americas global reach and punch on
land and sea.
We can drift into the future assuming the force we need is the force we will
have. Strategically that is dangerous. Future global security challenges and
demands may be uncertain, but one thing is certain: the need to urgently
and honestly get into the details of what we must do to assure our military
capability and capacity.
Subscribe to the online Hoover Institution journal Strategika (www.
hoover.org/publications/strategika), which analyzes issues of national
security in light of conflicts of the past. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

New from the Hoover Institution Press is Eyes, Ears, and


Daggers: Special Operations Forces and the Central
Intelligence Agency in Americas Evolving Struggle
against Terrorism, by Thomas H. Henriksen. To order,
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H O O V E R D IG E ST Fall 2016 93

T ERRORI S M

Wellsprings of
Violence
Has radicalism been Islamized, or has Islam been
radicalized? If we are to fight this kind of terrorism
effectively, the answer matters.

By Reuel Marc Gerecht

n 2004 Gilles Kepel, the noted French scholar of the modern Middle
East and Muslims in Europe, wrote:
The bombings in Madrid on March 11, 2004, established Europe
as the new front line for terrorist attacks. Before 9/11 Europe had

provided a sanctuary where Al-Qaedas planners could complete


preparations for the world-shattering operation they had conceived in the mountains of Afghanistan. But with the events in
Madrid in spring 2004, Europe emerged as the primary battlefield
on which the future of global Islam will be decided.

Do recent attacks in Paris and Brussels confirm Kepels assessment?


Beyond these lethal onslaughts, according to French and German internalsecurity officials, are dozens of near-misses that luck and good police work
prevented. Is Europe really the primary laboratory of global Islam, a highly
Westernized, militant version of the faith that lends itself easily to jihad?
Or is globalized Islam similar to the radical leftist movements in Europe of
Reuel Marc Gerecht is a contributor to the Hoover Institutions Herbert and Jane
Dwight Working Group on Islamism and the International Order and a senior fellow at the Foundation for Defense of Democracies.
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H OOVER DI GEST Fa ll 201 6

yesteryear, which though often independent of the Soviet Union used the
same air as the USSR? Once the Soviet state started to wither, these radical
leftist movements evanesced.
If the Soviet parallel applies, then globalized Islam is primarily fed by
radical Islamists in the Middle East and, more perplexingly, Saudi Arabia,
the mother ship of Wahhabism and Salafism, both religious reform movements searching for authenticity and legitimacy only in the practices of the
Prophet Muhammad and his companions. Although most jihadists have not
been fundamentalists, most Sunni jihadists have given a nod to the
Wahhabi-Salafi worldview. Their personal war inevitably gets elevated
into a universal struggle between pure Islam and the living jhiliyya, the
realm of disbelief.
Or is contemporary Muslim militancy a dynamic combination of both the
radicalization of Islam and the Islamization of Western radicalism? This
questionwhere one puts
the emphasis on the comIs Europe really the primary laboraponent parts fueling this
tory of global Islam?
anti-Western terrorismis
a raging battle among European scholars and intellectuals, pitting the views
of Frances two most famous students of Islamic militancy, Kepel and Olivier
Roy, against each other.
The radicalization of Islam (Kepel) and the Islamization of Western radicalism (Roy) have practical ramifications. Stressing the former gives Westerners the hope that if the cancer within Islam can be isolated and cut out or
shrunk by some kind of intellectual and social chemotherapy, the appeal of
violence will diminish. Imperfect but useful historical parallels in Islamic history might offer some idea of how to extinguish todays fervor.
VIOLENT FAILURES
Islam has often seen violent reform movements erupt. These rebellions were
complex, propelled by what modern Western sociologists would call nonreligious reasons. But they inevitably expressed the religious complaint that
rulership or society was ethically misguided and in need of divinely guided
rejuvenation.
Some movements succeeded spectacularly: the semi-Shiite Abbasid rising
against the Umayyad caliphs in the eighth century, the Ismaili Shiite Fatamid caliphate (9091171) in North Africa and Syria, the Almohad caliphate
(11211269) in North Africa and Spain, the Safavid Sufi holy warriors who
converted Persia to Shiism in the sixteenth century, and Ayatollah Ruhollah

H O O V E R D IG E ST Fall 2016 95

FUTURE SHOCK: A priest and an imam listen as the mayor of Saint-Etiennedu-Rouvray speaks of the violence in which Islamist attackers killed an
elderly priest. In another claimed jihadist attack twelve days earlier, a Tunisian man had driven a truck through a crowd in Nice, killing eighty-five people.
Scholars debate whether, and how, the appeal of jihadist violence will diminish. [Stephen CailletPanoramic]

Khomeinis Islamic revolution in 1979. Most of the militant irruptions, however, failed. Most were beaten back by military force. The most deadly and
most millenarian to fail recently were the Mahdist revolt in Sudan in the late
nineteenth century and the attack on Meccas Grand Mosque in 1979. The
former was routed by British military leader Horatio Herbert Kitchener; the
latter was put down by Saudi soldiers with French advisers.
Applying the past to the present could lead one to believe that global
Islam today might be checked with rigorous police work in Europe and
American military action in the Middle East. For the radicalization of Islam
school, Saudi Arabia and, to a much lesser extent, Qatar, both conservative
monarchies that propagate a militant fundamentalism abroad, remain conundrums. There really is no good historical parallel to such wealthy, ultraconservative Sunni states, let alone one of them controlling the holiest sites of
Islam, funding tumultuous missionary activity.

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Really good European internal security and steadfast and successful


American military campaigns could still confront a situation where the
intellectual high ground for faithful Sunni Muslims in Europe and the Middle
East, post victory, is dominated by the Saudis, who cant stop supporting
Islamic militants no matter the blowback.
The radicalization of Islam offers the probability of a protracted conflict
in Europe against Islamic militants and intrusive police surveillance against
ordinary Muslims; it implies that American military action in the Middle
East, at least against the Islamic State, is indispensable to European security.
The Islamization of radicalism school is perhaps even more depressing.
Inherent in this outlook is that Europe has a massive assimilation problem
with its Muslims and that unless Europeans solve it, they will be plagued
with recurring bouts of radical Islamic terrorism regardless of what happens in the greater Middle East. Conversely, if Europe figures out how to
successfully integrate Muslims into its old, profoundly secular societies, it
can, more or less, escape the savagery that is shredding Arab lands. Good
police work would still
be required, but the
Islamic reform movements always
police work needs to be
express a religious complaint: that
patient and socially conrulership or society is ethically misscious, acutely attentive
to the ultimate need to
guided and needs divinely guided
better assimilate Eurorejuvenation.
pean Muslims. This line
of thought, needless to say, appeals to many on the European left, whose
members are more comfortable blaming the dark side of Westernization,
the rigidities of European culture, and the undeniable anti-Muslim bigotry
within European societies than they are highlighting the troubles within
Islam and Muslim cultures.
Emphasizing the Islamization of Western radicalism also throws into doubt
the importance of American military action in the Middle East or French
military action in Africa. If in Europe the primary battle is within, then wars
against Muslim radicals abroad could do more harm than good.
How Europe, in the throes of a continentwide identity crisis and laden
with poor economies with massive debt, is supposed to discover new and
more effective methods of integrating large numbers of Muslimsand if the
violence continues in Syria and North Africa, ever more immigrantsinto its
societies isnt at all clear. Even the most progressive Europeans have trouble
describing exactly how a more open, absorptive Europe is going to be built,

H O O V E R D IG E ST Fall 2016 97

especially soon enough to make a difference for Muslims who are attacking in
the name of the Islamic State and Al-Qaeda.
A UNITED SECURITY FRONT
No matter how one analyzes the European-Muslim predicament, one thing
is unavoidable: European internal-security services will grow and integrate.
Once the French security services, easily the finest in Europe, always seemed
a step ahead of violent Islamic militants, but now they seem behind. Perhaps
there is a bureaucratic
explanation for this probEven the most progressive Europelem (fewer Arabic-speaking
officers inside the internalans have trouble describing how a
more open, absorptive Europe is sup- security service, less-talented magistrates running the
posed to be built.
investigations) that can be
addressed. Nevertheless, if the French are having trouble, then less-accomplished servicesthe Dutch, Belgian, German, Spanish, and Italianare
surely in similar difficulty. Americans can only wish them well.
Europe is part of our front line against foreign jihadists. However pleasing bombing Brussels and Paris may be to the holy-warrior set, striking New
York and Washington would still probably be much more satisfying.
Subscribe to The Caravan, the online Hoover Institution journal that
explores the contemporary dilemmas of the greater Middle East (www.
hoover.org/publications/caravan). 2016 by the Board of Trustees of the
Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is The


Wave: Man, God, and the Ballot Box in the Middle East,
by Reuel Marc Gerecht. To order, call (800) 888-4741 or
visit www.hooverpress.org.

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H OOVER DI GEST Fa ll 201 6

R USSI A

Moscows
Wounded Pride
Vladimir Putin embodies many of the pathologies
of the post-Soviet state, a land both animated and
crippled by its sense of mission.

By Stephen Kotkin

or half a millennium, Russian foreign policy has been

Key points

characterized by soaring

The impetus behind Russian


grand strategy has not changed.
Vladimir Putin has returned to
form.

ambitions that have exceed-

ed the countrys capabilities. Beginning


with the reign of Ivan the Terrible in
the sixteenth century, Russia managed
to expand at an average rate of fifty
square miles per day for hundreds of
years, eventually covering one-sixth of
the earths landmass. By 1900, it was the
worlds fourth- or fifth-largest industrial
power and the largest agricultural producer in Europe. But its per capita GDP
reached only 20 percent of the United
Kingdoms and 40 percent of Germanys.

Territory matters less for


great-power status than economic dynamism and human
capitalareas where Russia
has declined.
Russias sense of a special
mission fuels both pride and
resentment.
Russia could follow a path
like that of France, which retains a sense of exceptionalism
but has made peace with loss of
its empire and special mission.

Stephen Kotkin is a research fellow at the Hoover Institution and the John P.
Birkelund 52 Professor in History and International Affairs in the Woodrow Wilson School and History Department of Princeton University.
H O O V E R D IG E ST Fall 2016 99

Imperial Russias average life span at birth was just thirty years, and Russian
literacy in the early twentieth century remained below 33 percent.
History records three fleeting moments of remarkable Russian ascendancy: Peter the Greats victory over Charles XII and a declining Sweden in the
early 1700s, which implanted Russian power on the Baltic Sea and in Europe;
Alexander Is victory over a wildly overstretched Napoleon in the second
decade of the nineteenth century, which brought Russia to Paris as an arbiter
of great-power affairs; and Stalins victory over the maniacal gambler Adolf
Hitler in the 1940s, which gained Russia Berlin, a satellite empire in Eastern
Europe, and a central role shaping the global postwar order.
These high-water marks aside, however, Russia has almost always been
a relatively weak great power. It lost the Crimean War of 185356, a defeat
that ended the post-Napoleonic glow and forced a belated emancipation of
the serfs. It lost the RussoJapanese War of 19045, the
Russia is the most corrupt develfirst defeat of a European
oped country in the world, and its
country by an Asian one
resource-extracting, rent-seeking
in the modern era. It lost
World War I, a defeat that
economic system has reached a
caused the collapse of the
dead end.
imperial regime. And it lost
the Cold War, a defeat that helped cause the collapse of the imperial regimes
Soviet successor.
Throughout, the country has been haunted by its relative backwardness,
particularly in the military and industrial spheres. This has led to repeated
frenzies of government activity designed to help the country catch up, with a
familiar cycle of coercive state-led industrial growth followed by stagnation.
Most analysts had assumed that this pattern had ended for good in the 1990s,
with the abandonment of Marxism-Leninism and the arrival of competitive elections and a buccaneer capitalist economy. But the impetus behind
Russian grand strategy had not changed. And over the last decade, Russian
President Vladimir Putin has returned to the trend of relying on the state to
manage the gulf between Russia and the more powerful West.
POST-SOVIET DOLDRUMS
With the breakup of the Soviet Union in 1991, Moscow lost some two million
square miles of sovereign territory. Russia forfeited the share of Germany it had conquered in World War II and its other satellites in Eastern
Europeall of which are now inside the Western military alliance, along

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H OOVER DI GEST Fa ll 201 6

with some advanced former regions of the Soviet Union, such as the Baltic
states. Other former Soviet possessions cooperate closely with the West on
security matters. Notwithstanding the forcible annexation of Crimea, the
war in eastern Ukraine, and the de facto occupation of Abkhazia and South
Ossetia, Russia has had to retreat from most of Catherine the Greats socalled New Russia, in the southern steppes, and from Transcaucasia. And
apart from a few military bases, Russia is out of Central Asia, too.
Russia is still the largest country in the world, but it is much smaller than
it was, and the extent of a countrys territory matters less for great-power
status these days than economic dynamism and human capitalspheres in
which Russia has also declined. Russias economy amounts to a mere 1.5 percent of global GDP and is just one-fifteenth the size of the US economy. Russia also suffers the dubious distinction of being the most corrupt developed
country in the world, and its resource-extracting, rent-seeking economic
system has reached a dead end.
The geopolitical environment, meanwhile, has become only more challenging over time, with continuing US global supremacy and the dramatic
rise of China. And the spread of radical political Islam poses concerns, as
about 15 percent of Russias 142 million citizens are Muslim and some of
the countrys predominantly Muslim regions are seething with unrest and
lawlessness. For Russian elites who assume that their countrys status
and even survival depend on matching the West, the limits of the current
course should be evident.
A SPECIAL ROLE IN THE WORLD?
Russians have always had an abiding sense of living in a providential country
with a special mission. In truth, most great powers have exhibited similar
feelings, but Russias is remarkably resilient.
The sense of having a special mission has contributed to Russias paucity
of formal alliances and reluctance to join international bodies except as an
exceptional or dominant member. It furnishes Russias people and leaders with pride, but it also fuels resentment toward the West for supposedly
underappreciating Russias uniqueness and importance. Thus is psychological alienation added to the institutional divergence driven by relative
economic backwardness. As a result, Russian governments have generally
oscillated between seeking closer ties with the West and recoiling in fury at
perceived slights.
Yet another factor that has shaped Russias role in the world has been the
countrys unique geography. It has no natural borders, except the Pacific

H O O V E R D IG E ST Fall 2016 101

[Taylor Jonesfor the Hoover Digest]

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Ocean and the Arctic Ocean. Buffeted throughout its history by often turbulent developments in East Asia, Europe, and the Middle East, Russia has felt
perennially vulnerable and has often displayed a kind of defensive aggressiveness. Whatever the original causes behind early Russian expansionism,
many in the countrys political class came to believe over time that only
further expansion could secure the earlier acquisitions. Russian security has
thus traditionally been partly predicated on moving outward, in the name of
pre-empting external attack.
Today, too, smaller countries on Russias borders are viewed less as potential friends than as potential beachheads for enemies. In fact, this sentiment
was strengthened by the Soviet collapse. Unlike
Stalin, Putin does not recognize the existence of
a Ukrainian

H O O V E R D IG E ST Fall 2016 103

nation separate from a Russian one. But like Stalin, he views all nominally
independent borderland states, now including Ukraine, as weapons in the
hands of Western powers intent on wielding them against Russia.
A final driver of Russian foreign policy has been the countrys perennial
quest for a strong state. In a dangerous world with few natural defenses, the
thinking runs, the only guarantor of Russias security is a powerful state willing and able to act aggressively in its own interests. A strong state has also
been seen as the guarantor of domestic order.
Paradoxically, however, the efforts to build a strong state have invariably led to subverted institutions and personalistic rule, from Peter the
Great and successive Romanov autocrats to Lenin and Stalin, and it has
persisted to this day. Unbridled personalism tends to render decision
making on Russian grand strategy opaque and potentially capricious,
for it ends up conflating state interests with the political fortunes of one
person.
COMING TO TERMS WITH THE PAST
Anti-Western resentment and Russian patriotism appear particularly
pronounced in Putins personality and life experiences, but a different
Russian government not run by former KGB types would still be confronted with the challenge
of weakness vis--vis the
Until Russia brings its aspirations
West and the desire for a
into line with its actual capabilities,
special role in the world.
it cannot become a normal country. Russias foreign policy
orientation, in other words,
is as much a condition as a choice. But if Russian elites could somehow
redefine their sense of exceptionalism and put aside their unwinnable
competition with the West, they could set their country on a less costly,
more promising course.
Superficially, this appeared to be what was happening during the 1990s,
before Putin took the helm, and in Russia a powerful stab in the back story
has taken shape about how it was an arrogant West that spurned Russian
overtures over the past couple of decades rather than the reverse. But such a
view downplays the dynamic inside Russia. Certainly, Washington exploited
Russias enfeeblement during the tenure of Russian President Boris Yeltsin
and beyond. But it is not necessary to have supported every aspect of Western policy in recent decades to see Putins evolving stance less as a reaction
to external moves than as the latest example of a deep, recurring pattern

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H OOVER DI GEST Fa ll 201 6

driven by internal factors. What precluded post-Soviet Russia from joining


Europe as just another country or forming an (inevitably) unequal partnership with the United States was the countrys abiding great-power pride and
sense of special mission. Until Russia brings its aspirations into line with its
actual capabilities, it cannot become a normal country.
Lets be clear: Russia
is a remarkable civiliFor Russian elites who assume their
zation of tremendous
depth. It is not the
countrys status and even survival
only former absolute
depend on matching the West, the
monarchy that has
limits of Russias current course
had trouble attaining
should be evident.
political stability or that
retains a statist bent (think of France, for example). And Russia is right in
thinking that the postCold War settlement was unbalanced, even unfair.
But that was not because of any intentional humiliation or betrayal. It was
the inevitable result of the Wests decisive victory in the contest with the
Soviet Union. In a multidimensional global rivalrypolitical, economic, cultural, technological, and militarythe Soviet Union lost across the board.
Mikhail Gorbachevs Kremlin chose to bow out gracefully rather than pull
the world down along with it, but that extraordinarily benevolent endgame
did not change the nature of the outcome or its causessomething that
post-Soviet Russia has never really accepted.
The outside world cannot force such a psychological recognition, what
the Germans call Vergangenheitsbewltigungcoming to terms with the
past. But there is no reason it could not come about organically, among
Russians themselves. Eventually, the country could try to follow something like the trajectory of France, which retains a lingering sense of
exceptionalism yet has made peace with the loss of its external empire
and its special mission in the world, recalibrating its national idea to fit
its reduced role and joining with lesser powers and small countries in
Europe on terms of equality.
Whether even a transformed Russia would be accepted into and
merge well with Europe is an open question. But the start of the process
would need to be a Russian leadership able to get its public to accept
permanent retrenchment and agree to embark on an arduous domestic
restructuring.
It took France and the United Kingdom decades to relinquish their own
senses of exceptionalism and global responsibility, and some would argue

H O O V E R D IG E ST Fall 2016 105

that their elites have still not fully done so. But they have high GDPs, toprated universities, financial power, and global languages. Russia has none of
that. It does possess a permanent veto in the UN Security Council, as well as
one of the worlds two foremost doomsday arsenals and world-class cyberwarfare capabilities. These, plus its unique geography, do give it a kind of
global reach. And yet, Russia is living proof that hard power is brittle without
the other dimensions of great-power status. However much Russia might
insist on being acknowledged as an equal to the United States, the European
Union, or even China, it is not, and it has no near- or medium-term prospect
of becoming one.
THE THREAT FROM WITHIN
What are Russias concrete alternatives to a European-style restructuring
and orientation? It has a very long history of being on the Pacificand failing
to become an Asian power. What it can claim is predominance in its region.
There is no match for its conventional military among the other Soviet
successor states, and the
latter (with the exception
What poses an existential threat to
of the Baltic states) are also
economically dependent on
Russia is not NATO or the West but
Russia to various degrees.
Russias own regime.
But regional military
supremacy and economic leverage in Eurasia cannot underwrite enduring
great-power status. Putin has failed to make the Eurasian Economic Union
successfulbut even if all potential members joined and worked together,
their combined economic capabilities would still be relatively small.
Russia is a big market, and that can be attractive, but neighboring countries see risks as well as rewards in bilateral trade with the country. Estonia,
Georgia, and Ukraine, for example, are generally willing to do business with
Russia only provided they have an anchor in the West. Other states that are
more economically dependent on Russia, such as Belarus and Kazakhstan,
see risks in partnering with a country that not only lacks a model for sustained development but also, in the wake of its annexation of Crimea, might
have territorial designs on them. A ballyhooed strategic partnership with
China, meanwhile, has predictably produced little Chinese financing or
investment to compensate for Western sanctions. And all the while, China
has openly and vigorously been building its own Greater Eurasia, from the
South China Sea through inner Asia to Europe, at Russias expense and with
its cooperation.

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H OOVER DI GEST Fa ll 201 6

Todays muscular Russia is actually in structural decline, and Putins


actions have unwittingly yielded a Ukraine more ethnically homogeneous
and more Western-oriented than ever before. Moscow has tense relations
with nearly every one
of its neighbors and
However much Russia might insist on
even with its biggest
being acknowledged as an equal to the
trading partners.
United States, the EU, or even China, it
Even Germany, Russias most important
is not. And it has no near- or mediumforeign policy counterm prospect of becoming one.
terpart and one of its
most important economic partners, has had enough, backing sanctions at a
cost to its own domestic situation.
What poses an existential threat to Russia is not NATO or the West but
Russias own regime. Putin helped rescue the Russian state but has put it
back on a trajectory of stagnation and even possible failure. The president
and his clique have repeatedly announced the dire necessity of prioritizing
economic and human development, yet they shrink from the far-reaching
internal restructuring necessary to make that happen, instead pouring resources into military modernization. What Russia really needs to
compete effectively and secure a stable place in the international order is
transparent, competent, and accountable government; a real civil service;
a genuine parliament; a professional and impartial judiciary; free and professional media; and a vigorous, nonpolitical crackdown on corruption.
PATIENT RESOLVE FROM THE WEST
Russias current leadership continues to make the country bear the burdens of
a truculent and independent foreign policy that is beyond the countrys means
and has produced few positive results. The temporary high afforded by a cunning and ruthless policy in Syrias civil war should not obscure the severity of
Russias recurrent strategic bindone in which weakness and grandeur combine to produce an autocrat who tries to leap forward by concentrating power,
which results in a worsening of the very strategic dilemma he is supposed to
be solving. What are the implications of this for Western policy? How should
Washington manage relations with a nuclear- and cyber-armed country whose
rulers seek to restore its lost dominance, albeit a lesser version; undercut
European unity; and make the country relevant, come what may?
In this context, it is useful to recognize that there has actually never
been a period of sustained good relations between Russia and the United

H O O V E R D IG E ST Fall 2016 107

States. This has been due not to misunderstandings, miscommunication, or hurt feelings but rather to divergent fundamental values and
state interests. For Russia, the highest value is the state; for the United
States, it is individual liberty, private property, and human rights, usually set out in opposition to the state. So expectations should be kept in
check.
Equally important, the United States should neither exaggerate the Russian threat nor underplay its own many advantages. In certain places and on
certain issues, Russia has the ability to thwart US interests, but it does not
even remotely approach the scale of the threat posed by the Soviet Union, so
there is no need to respond to it with a new Cold War.
The real challenge today boils down to Moscows desire for Western
recognition of a Russian sphere of influence in the former Soviet space.
This is the price for reaching accommodation with Putin, and it remains
a concession the West should never grant. Neither, however, is the West
really able to protect the territorial integrity of the states inside Moscows desired sphere of influence. And bluffing will not work. So what
should be done?
Some call for a revival of containment, arguing that external pressure will
keep Russia at bay until its authoritarian regime liberalizes or collapses.
Adopting this thinking
now would entail mainRussia has the ability to occasionally
taining or intensifying
thwart US interests, but there is no need sanctions in response
to Russian violations of
to respond with a new Cold War.
international law, shoring
up Western alliances politically, and upgrading NATOs military readiness.
But a new containment could become a trap, re-elevating Russia to the status
of rival superpower, Russias quest for which has helped bring about the current confrontation.
Once again, patient resolve is the key. It is not clear how long Russia can
play its weak hand in opposition to the United States and the European
Union, frightening its neighbors, alienating its most important trading
partners, ravaging its own business climate, and hemorrhaging talent. At
some point, feelers will be put out for some sort of rapprochement, just as
sanctions fatigue will eventually kick in, creating the possibility for some
sort of deal. That said, it is also possible that the present standoff might not
end anytime soon, since Russias pursuit of a Eurasian sphere of influence is

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H OOVER DI GEST Fa ll 201 6

a matter of national identity not readily susceptible to material cost-benefit


calculations.
The trick will be to hold a firm line when necessarysuch as refusing to
recognize a privileged Russian sphere even when Moscow is able to enact one
militarilywhile offering negotiations only from a position of strength and
avoiding stumbling into unnecessary and counterproductive confrontations
on most other issues. Someday, Russias leaders may come to terms with the
glaring limits of standing up to the West and seeking to dominate Eurasia.
Until then, Russia will remain not another necessary crusade to be won but a
problem to be managed.
Reprinted by permission of Foreign Affairs (www.foreignaffairs.com).
2016 by the Council on Foreign Relations Inc. All rights reserved.

Available from the Hoover Institution Press is Andrei


Sakharov: The Conscience of Humanity, edited by
Sidney D. Drell and George P. Shultz. To order, call
(800) 888-4741 or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 109

R U SS I A

Peace as Cold as
Siberia
Americas frigid relations with Russia have little to
do with US policy. They have a great deal to do with
Vladimir Putin.

By Michael A. McFaul

Hoover senior fellow Michael A. McFaul testified in June before the House Foreign
Affairs Committee. Here are excerpts of his testimony.

elations between the United States and Russia today are more
strained and confrontational than at any time since the end of
the Cold War. In fact, even some periods of the Cold War seemed
more cooperative than our current era. For the first time since

the end of World War II, a European country has annexed territory of a
neighbor. Emboldened by the relative ease of Crimeas annexation, Vladimir Putin then went a step further and intervened in eastern Ukraine in an
attempt to wrestle more territory away from Kievs control. Inside Russia,
Putin has increased his autocratic grip, in part by blaming the United States
for fomenting revolution against his regime.
Once again, like the darkest days of the Cold War, Russian state-controlled
media outlets portray the United States as Russias number one enemy,
Michael A. McFaul is the Peter and Helen Bing Senior Fellow at the Hoover Institution, a senior fellow at the Freeman Spogli Institute for International Studies
at Stanford University, and a professor of political science at Stanford. He recently
served as US ambassador to Russia.
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H OOVER DI GEST Fa ll 201 6

intent on weakening or even dismembering Russia. According to the Kremlins media, we are also responsible for many of the evils in other countries,
including the tragic civil wars in Syria and Libya and the Nazis who came to
power in Kiev. As someone who lived in the Soviet Union, I find the current
level of vitriol against the United States and the West even worse than during
the Cold War.
The Obama administrations response to these Russian actions, in partnership with American allies in Europe, has been qualitatively different than
any other period in the postCold War era. Dozens of Russian officials and
companies are now sanctioned. Even during the most difficult periods of the
Cold War, the Kremlin chief of staff was not on a sanctions list. And after
decades of focus on other missions, NATO is retrained again on deterring a
threat from Russia. Two years ago, in his address to the UN General Assembly, President Obama argued that the three greatest threats to the world
were Ebola, ISIS, and Russia.
In parallel to these actions and reactions between our two governments,
majorities of Russians and Americans view each other again as enemies.
What a tragedy. For the past three decades, American presidentsDemocrats and Republicans alikesought to integrate Russia into the West and to
encourage democracy inside Russia. Both projects are now over.
How did we get to this point? What must be done to pursue American
national interests in our relations with Russia?
RESET...AND REGRESS
We will only develop successful policy prescriptions with respect to Russia
if we accurately understand the causes of our current conflict. Getting the
diagnosis wrong can lead to bad policy prescriptions.
One popular explanationin Moscow and in some US and European
circlesof the current confrontation is that the United States and our European allies have been pressing Russia too hard for too long and Putin had
to push back. We lectured the Russians about markets and democracy, then
expanded NATO, then bombed Serbia, then invaded Iraq, then allegedly supported color revolutions and the Arab Spring, and Putin finally felt compelled
to strike back by annexing Crimea and intervening in eastern Ukraine, or so
the argument goes. This explanation is wrong.
Although presidents Yeltsin and Putin both suggested that Russia should consider joining NATO at one point in their careers, NATO
expansion was never popular in Moscow. Nor did most Russian officials
support the NATO campaign against Slobodan Milosevic, the Bush

H O O V E R D IG E ST Fall 2016 111

administrations invasion of Iraq, or so-called color revolutions in Serbia,


Georgia, and Ukraine. Yet these older policy differences cannot be cited to
explain our current confrontation, because in between them and today, we
had an intense and successful period of cooperation with Russia. We in the
Obama administration called it the Reset. During this era (200912), President Obama and Russian president Dmitry Medvedev worked together on
several projects that improved the security and prosperity of both countries. Our two countries
ratified the New START
As someone who lived in the Soviet
Treaty; passed UN Security Council Resolution 1929,
Union, I find the current level of
the most comprehensive
vitriol against the United States and
set of sanctions against
the West even worse than during the
Iran ever; and developed
Cold War.
the Northern Distribution Network: a mix of air, rail, and truck routes through Russia and
other countries in Central Asia and the Caucuses to supply US soldiers in
Afghanistan and reduce US military dependency on the southern route
through Pakistan. Our two governments also worked together to defuse
tensions in the Caucuses and manage ethnic strife in Kyrgyzstan after the
government there was toppled. In 2011 President Medvedev even agreed to
abstain on UN Security Council Resolutions 1970 and 1973, which authorized the use of force against the Libyan regime of Muammar Gadhafi. No
Russian leader had ever acquiesced to a UN-approved military intervention into a sovereign country. Our two governments also cooperated to
increase trade and investment, including working together to help Russia
obtain membership in the World Trade Organization.
During this period, NATO expansion was not a contentious issue in our
bilateral relations. On the contrary, when President Medvedev attended the
2010 NATO Lisbon summit, he echoed other Western leaders in speaking
effusively about NATO-Russian relations. Behind closed doors, Medvedev
engaged in a serious discussion with his NATO counterparts on missile
defense cooperation.
During the heyday of the Reset, roughly 60 percent of Americans viewed
Russia as a friendly country; a similar number of Russians viewed the United
States positively.
All of this cooperation and these positive attitudes occurred after NATO
expansion, the Iraq War, and the Orange Revolution in Ukraine. These factors, therefore, cannot be cited to explain the current era of confrontation.

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H OOVER DI GEST Fa ll 201 6

A second explanation also places the blame on the United States, but for
doing too little, not too much. Putin invaded Ukraine because Obama was
weak, so the argument goes. In fact, in response to Putins more belligerent policies, the Obama administration began to pivot away from cooperation with Russia long before Putin intervened in Ukraine, including most
dramatically canceling a summit planned in Moscow for September 2013.
The truth of the matter, however, is that the United States has never had
effective policy options to deter Russian aggression in its neighborhood.
Putin invaded neighboring Georgia in 2008 and President Bush didnt stop
that intervention. Nor did President Reagan prevent the Soviet-inspired
crackdown on Solidarity in December 1981. Likewise, President Johnson
could not stop Brezhnev from intervening in Czechoslovakia in 1968, and
President Eisenhower failed to prevent Soviet tanks from rolling into
Hungary in 1956. No US president has ever succeeded in deterring Soviet/
Russian military intervention in Eastern Europe in those countries not
members of NATO.
The driving force of our current clash with Russia is not American policies,
but domestic politics in Russia and Ukraine, specifically Putins response
to popular challenges to his authority and the authority of his former ally in
Kiev. These are forces over which the United States has little control.
Relations with Russia began to deteriorate rapidly after Putins return to
the Kremlin in 2012 and his decision to suppress popular opposition to his
rule. In December 2011, tens of thousands of Russians protested a falsified
parliamentary election. Not since 1991when the Soviet Union collapsed
had so many Russians mobilized on the streets against the government.
Putins old social contracteconomic growth in return for political passivitywas no longer sufficient to appease these middle-class protesters.
He needed a new argument for legitimacy, so he turned against the United
States, labeling us again
as Russias enemy. In
Putin always sees the hidden hand
particular, Putin argued
of the CIA behind popular protests
that the United States
was seeking to topple
because, in his view, individuals
his regime and interfercannot act on their own.
ing in Russias internal
affairs. Putin, his aides, and his media outlets accused the leaders of Russian
demonstrations of being US agents. While I was ambassador, these same
media outlets constantly propagated the idea that President Obama sent me
to Moscow to foment a color revolution against Putins regime. Putin and

H O O V E R D IG E ST Fall 2016 113

his government also blamed the United States for fostering instability and
regime change in the Arab world.
During this period, US policy towards Russia did not change. Rather,
Putins policy towards the United States changed radically.
Putin also blamed the United States for fostering regime change against his
ally, President Viktor Yanukovych of Ukraine in the fall of 2013. Putin always
sees the hidden hand of
the CIA behind popular
The driving force of our current clash
protests because, in his
with Russia is not American policies, but view, individuals cannot
domestic politics in Russia and Ukraine. act on their own. When
Yanukovych fled Ukraine
in February 2014, after a desperate effort by Western intermediaries to forge
a compromise between the Ukrainian government and the protesters, Putin
blamed the United States again. To exact revenge against the new government
in Kiev as well as the double-crossing West, he first annexed Crimea and
then intervened in the Donbas in support of secessionist groups there.
Two years later, Putin intervened in Syria to make sure his ally Bashar alAssad did not suffer the same fate as Yanukovych in Ukraine. Putins intervention in Syria had everything to do with propping up Assad and very little
to do with fighting ISIS.
Putins intervention in Ukraine was initially very popular among Russians.
Putins perceived success among Russians in battling neo-Nazis in Ukraine,
the evil Americans, and the decadent West will make it hard for him to
change course. To maintain his argument for legitimacy at home, Putin needs
perpetual conflict with external enemiesnot full-scale war or a direct clash
with the United States or NATO, but a low-level, constant confrontation to
support the narrative that Russia is under siege from the West.
STAYING THE COURSE
If my explanation for our new confrontation with Russia is correct, then certain policy prescriptions should be followed and others avoided.
Above all, this conflict did not start as a result of a particular US action, so
seeking to correct some US foreign policy will not produce a change in USRussian relations. For instance, Putin did not intervene in Ukraine to stop
NATO expansion, because NATO expansion to Ukraine was not on the agenda in 2014. Likewise, the United States cannot stop promoting regime change
in Russia as a way to win favor with Putin, because the Obama administration has never promoted regime change in Russia. Equally dangerous would

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H OOVER DI GEST Fa ll 201 6

be to forget about Putins actions in Ukraine and pivot to start making deals
with the Kremlin, as Republican presidential nominee Donald Trump has
suggested. Such a policy would prove to Putin and his government that they
can annex territory, use military force, and then wait patiently until the
United States and Europe grow tired of confrontation and seek cooperation
again. Suggesting moral equivalency between Russian behavior and American actions abroad is
also very damaging to
To maintain his argument for legitiour national interests.
For instance, when Donmacy, Putin needs perpetual conflict
ald Trump says well, we with external enemies.
are doing a lot of killing
ourselves in response to a question about Putins policies, he hands the Russian leader a public relations win.
Instead of searching for corrections in our past policies, we need to stay
the course with our current policies. The Obama administration, together
with our European allies, responded correctly to Putins belligerent actions
in Ukraine. The Wests unified and comprehensive response to Putins
aggression was impressive and effective, but now needs to be maintained
and deepened.
Support Ukrainian reform. Putin is waiting for Ukrainian economic
and political reform to fail. Our goal must be to do all we can to help Ukrainian reform succeed. There is no better way to rebuff Putins belligerent
foreign policies and autocratic domestic practices than to consolidate democracy and strengthen market practices in Ukraine.
Under difficult circumstances, the Ukrainian government has achieved
success.
In close cooperation with the International Monetary Fund, the Ukrainian government has reduced government expenditures, raised heating
tariffs, tightened monetary policy, and eliminated energy dependence
on Russiaall difficult but important reforms for stimulating economic
growth.
Ukrainian military reform and expanded training also continues, supported by American assistance. The $600 million in security assistance that
the United States has committed to Ukraine has increased the effectiveness
of Ukrainian military forces to deter future Russian offensives. This support
must be continued.
Ukraines new leaders also have proven capable of enacting major institutional reform. Ukrainian civil society remains robust, and continues to

H O O V E R D IG E ST Fall 2016 115

pressure the government to maintain momentum on reform. US support for


Ukrainian civil society has been a smart, impactful investment.
But more must be done. Above all, the influence of Ukrainian business
conglomerates in politics must be reduced. The new government has to make
more-credible commitments to fighting corruption. US policy should assist
them in making these commitments, through aid conditionality, technical
assistance, and political support.
The United States and our European allies also should be doing more to
reach out, nurture, and support directly the people in the Donbas, including
the million or more currently displaced in other parts of Ukraine. They need
short-term humanitarian assistance, as well as long-term supporteducation, housing, and retrainingto rebuild their futures.
Strengthen NATO. The probability of Russia attacking a NATO ally is
low. Putin does not have a master plan to re-create the Soviet Union. He is
not irrational. Already, his Novorossiya project in Ukraine has failed. We
should not exaggerate the Russian threat.
At the same time, Putin will take advantage of opportunities, including splits within the alliance or ambiguities about NATOs commitment to
defend all members. We must deny him new opportunities, and reduce to
zero his doubt about our commitment to defending all NATO allies against
military threats. Thats why
President Obama made the
When Donald Trump says, we are
right decision to dramatidoing a lot of killing ourselves, he
cally increase the size of the
hands the Russian leader a public
European Reassurance Initiative to $3.4 billion. Thats
relations win.
why NATOs plan to deploy
four battalions on a rotational basis in Poland, Estonia, Latvia, and Lithuania
is the right decision to complement a series of decisions taken earlier, including the creation of the Very High Readiness Joint Task Force, to strengthen
NATOs deterrent capacity. The United States should participate in one of
these deployments and at the same maintain our bilateral military cooperation with these countries.
Lift sanctions (at the right time). The United States and our allies
should lift sanctions against Russian companies and individuals immediately
after Putin and his surrogates in eastern Ukraine implement the Minsk
agreement. Lifting sanctions beforehand would be terribly damaging to
American and European credibility. Likewise, a partial lifting of sanctions in
return for a partial implementation of Minsk is a dangerous, slippery slope.

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H OOVER DI GEST Fa ll 201 6

Sanctions put in place in response to the annexation of Crimea should stay in


place until Russia leaves Crimea, however long that may be.
Counter Russian propaganda. The US government should not seek to
counter Russian propaganda with American propaganda. Instead, the best
method for countering disinformation is real reporting from credible journalists in Russia, Ukraine, and other countries in the region. American direct
funding of these media
outlets would taint them.
There is no better tool to undermine
Instead, our focus should
be on providing short-term
Russian propaganda than a threetraining opportunities,
week trip to Palo Alto.
yearlong fellowships at
American and European universities, and internships at Western media
organizations. Education and the free flow of information are our best tools
in the long struggle against Russian propaganda.
Work with Russia on issues of mutual interest. Even after Putin decided to portray the United States as an enemy to bolster his domestic support,
he continued to engage with President Obama and his administration on a
limited set of issues on which our interests overlapped. For instance, during this period of confrontation, our two governments still managed to work
together to remove chemical weapons from Syria and to maintain unity in
the P5+1 process to achieve an agreement to prevent Iran from obtaining
nuclear weapons. When opportunities to cooperate with Russia arise on
issues of mutual benefit, we should pursue them, and not link cooperation on
these issues to progress on other issues of disagreement.
We should not continue to pursue engagement, however, without results.
Putins military intervention in Syria, for instance, has achieved his goal of
shoring up the Assad regime, at least in the short term. The United States
has no interest in associating with that objective. If the Obama administration continues to work with Russia on Syria, we must demand more from our
Russian counterparts, and push them to pressure Assad to do more, including allowing more humanitarian assistance to distressed Syrian communities, and engaging more seriously in political negotiations.
Deepen engagement with Russian society. Many Russians in government, business, and society quietly believe that Putins current course of
confrontation with the West does not serve Russias long-term economic
and strategic interests. We should not isolate these people but instead
maintain contact with them. The United States and our European allies
should increase efforts to engage directly with the Russian people, including

H O O V E R D IG E ST Fall 2016 117

students through exchanges and scholarships, peer-to-peer dialogue with


nongovernmental organizations, and allowing Russian companies not tied to
the state to continue to work with Western partners.
There is no better tool to undermine Russian propaganda than a threeweek trip to Palo Alto. There is no better way to show that Americans are
not obsessed with destroying Russia than to send Russian students to
spend an academic year in our schools and universities. Likewise, there are
no better ambassadors for our country than young Americans studying at
Russian universities or interning in Russian companies. The more interaction we can promote between our societies, the better.
Many Russian civil society leaders have been forced to leave Russia. The
United States and our allies should increase our efforts to support these
people now living in exile, either through scholarships and fellowships to
attend universities or work at think tanks, or through direct financial support for their organizations operating from outside Russia.
Special to the Hoover Digest.

New from the Hoover Institution Press is One Day We


Will Live Without Fear: Everyday Lives under the
Soviet Police State, by Mark Harrison. To order, call
(800) 888-4741 or visit www.hooverpress.org.

118

H OOVER DI GEST Fa ll 201 6

R USSI A

What Is Russias
Military Up To?
The decrepit Red Army of Soviet days has been
replaced by a modern, effective fighting force.
How effective? Its the job of Lieutenant General
H. R. McMaster to find out.

By Bryan Bender

ieutenant General H. R. McMaster has a shaved head and gung-ho


manner that only add to his reputation as the US Armys leading
warrior-intellectual, one who often quotes famed Prussian general
and military theorist Carl von Clausewitz. A decade ago, McMaster

fought a pitched battle inside the Pentagon for a new concept of warfare to
address the threat from Islamist terrorists and insurgents in Afghanistan, Iraq,
and other trouble spots. Now, his new mission is more focused. Target: Moscow.
Politico has learned that, following the stunning success of Russias quasisecret incursion into Ukraine, McMaster is quietly overseeing a high-level
government panel intended to figure out how the Army should adapt to this
Russian wake-up call. Partly, it is a tacit admission of failure on the part of
the Armyand the US government more broadly.
It is clear that while our Army was engaged in Afghanistan and Iraq,
Russia studied US capabilities and vulnerabilities and embarked on an
Lieutenant General H. R. McMaster is a research fellow at the Hoover Institution. He serves as director of the Army Capabilities Integration Center and deputy
commanding general, futures, of the Army Training and Doctrine Command.
Bryan Bender is the defense editor of Politico.
H O O V E R D IG E ST Fall 2016 119

ambitious and largely successful modernization effort, McMaster told the


Senate Armed Services Committee in April. In Ukraine, for example, the
combination of unmanned aerial systems and offensive cyber and advanced
electronic warfare capabilities depict a high degree of technological
sophistication.
In Ukraine, a rapidly mobilized Russian-supplied rebel army with surprisingly lethal tanks, artillery, and anti-tank weapons has unleashed swarms of
unmanned aerial vehicles and cyberattacks that shut down battlefield communications and even global positioning system units.
The discussions of what has been gleaned so far on visits to Ukraineand
from various other studies conducted by experts in and out of government in
the United States and Europehave highlighted a series of early takeaways,
according to a copy of a briefing that was delivered in spring to the top leadership in the Pentagon and in allied capitals.
US military and intelligence officials worry that Moscow now has the
advantage in key areas. Lighter armored vehicles like those the Army relied
on heavily in Iraq and Afghanistan are highly vulnerable to its new weapons.
And main battle tanks like Russias T-90thought to be an anachronism in
recent conflictsare still decisive.
McMaster added in his testimony that Russia possesses a variety of
rocket, missile, and cannon artillery systems that outrange and are more
lethal than US Army artillery systems and munitions. Its tanks, meanwhile, are so improved that
they are largely invulThe Army is trying to apply what it
nerable to antitank mislearned about Russia and its use of
siles, says retired general
little green menforces subverting Wesley Clark, who served
as NATO commander from
governments.
1997 to 2000 and has been
sounding the alarm about what the Ukraine conflict means for the US
military.
Also on display in Ukraine to an alarming degree: Moscows widespread
political subversion of Ukrainian institutions, part of what experts are now
calling hybrid warfare that combines military power with covert efforts
to undermine an enemy government. Russia has since then also intervened
with ground forces and airstrikes in Syriaapparently somewhat successfullyand flexed its muscles in other ways. Earlier this year Russian
fighter jets and a military helicopter repeatedly buzzed a US Navy warship in the Baltic Sea, despite radio warnings.

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H OOVER DI GEST Fa ll 201 6

OLD WORRIES ARE NEW AGAIN


McMasters response is the Russia New Generation Warfare Study, whose
government participants have already made several unpublicized trips to
the front lines in Ukraine. The high-level but low-profile effort is intended to
ignite a wholesale rethinkingand possibly even a redesignof the Army in
the event it has to confront the Russians in Eastern Europe.
It is expected to have profound impact on what the US Army will look
like in the coming years, the types of equipment it buys, and how its units
train. Some of the early lessons were road tested in a major war game in
June in Poland. Says retired Army chief of staff General Gordon Sullivan:
That is all designed to demonstrate that we are in the game.
Among those who have studied the Russian operation in Ukraine closely is
Phillip Karber, president of the Potomac Foundation and former Marine who
has made twenty-two
trips to Ukraine since
Russia possesses a variety of
2014. Few in the West
have paid much attenrocket, missile, and cannon artillery
tion to Russias doctrinal
systems that outrange and are more
pivot to New Generation lethal than US Army artillery sysWar until its manifestatems and munitions.
tion in Ukraine, says
Karber. Another surprise, he adds, is the relative lack of Western attention,
particularly given the unexpected scale and duration of the conflict, as well
as the unanticipated Russian aggressiveness in sponsoring it.
Karber says the lethality of new Russian munitions has been striking,
including the use of scatterable mines, which the United States no longer
possesses. And he counts at least fourteen types of drones used in the conflict and reports that one Ukrainian unit he was embedded with witnessed up
to eight drone flights a day. How do you attack an adversarys UAV? asks
Clark. Can we blind, disrupt, or shoot down these systems? The US military
hasnt suffered any significant air attacks since 1943.
The new Army undertaking is headed by Brigadier General Peter L. Jones,
commandant of the US Army Infantry School at Fort Benning, Georgia. But
it is the brainchild of McMaster, who as head of the Army Capabilities Integration Center at Fort Eustis, Virginia, is responsible for figuring out what
the Army should look like in 2025 and beyond.
Clark describes McMasters effort as the most dramatic rethinking since
the collapse of the Soviet Union. These are the kind of issues the US Army
hasnt worked on since the end of the Cold War twenty-five years ago.
H O O V E R D IG E ST Fall 2016 121

TAKING CHARGE: Lieutenant General H. R. McMaster lectures at the University of South Floridas Global Initiative on Civil Society and Conflict in 2015.
McMaster testified before a Senate committee this year that while our Army
was engaged in Afghanistan and Iraq, Russia studied US capabilities and vulnerabilities and embarked on an ambitious and largely successful modernization effort. [Octavio JonesZUMA Press]

The question is why the US governmentand the Army in particular


has once again allowed its attention to be diverted for so long that it has
been caught by surprise by a major development like Russias enhanced
capabilities. While Russian president Vladimir Putin undertook an aggressive military buildup, the US Army actually drew up plans to shrink the
active-duty force by some 40,000, from about 490,000 to 450,000 over the
next several years. That plan is now in question. A bill recently proposed in
the House of Representatives would halt the reduction. And last spring, the
Alaska delegation successfully got the Pentagon to back down on its plans to
deactivate an airborne brigade. One of the justifications cited: a newly belligerent Russia.
There is also a question about whether McMaster is the general for the
job. For most of his career, McMaster has been a controversial figure. In a

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H OOVER DI GEST Fa ll 201 6

book he published earlier in his career, Dereliction of Duty: Lyndon Johnson,


Robert McNamara, the Joint Chiefs of Staff, and the Lies that Led to Vietnam,
he attacked the generals of the Vietnam era for not admitting frankly that
the war was unwinnable. Yet later, when McMaster pushed for a complex
strategy of counterinsurgency in Iraq and Afghanistan, critics said McMaster and his fellow so-called COIN-dinistas misrepresented and oversold
their own war-fighting strategy. Counterinsurgency calls not just for fighting
insurgents but for a kind of hearts and minds campaign to win over local
populations through reconstruction, policing, and economic progress that
usually takes at least a decade. But the United States never intended to stay
in Afghanistan or Iraq for that long.
Now reality is taking McMaster in precisely the direction that some of his
critics said he and the other COIN specialists needed to focus on more in
the first place: orienting the Army to what it does best, confronting conventional adversaries. The question is whether the US military is able to adopt
a realistic approach to Russian aggression without getting the nation into
World War III.
SHARP LESSONS FROM 1973
Curiously, the model for the new effort is the Armys detailed study of a war
fought forty-three years ago, one that most people have forgotten about. As
a guide to this new major review, Politico has learned, McMaster is dusting
off the Armys landmark after-action review of the Yom Kippur War between
Israel and Moscows then-proxies, Egypt and Syria.
In October 1973, as Americas painful odyssey in the jungles of Vietnam
was winding down, a war broke out thousands of miles away that would profoundly change the US Army.
Tank losses in the first six days of the Yom Kippur War were greater than
the entire US tank inventory stationed in Europe to deter the Soviet Union
when Egypt and Syria launched the surprise attack on Israel. In the most
recent major armored battles, during World War II three decades earlier,
opposing tank armies faced off at an average of 750 yards. In the Yom Kippur
War, it was 3,000 yards or more, a far bigger killing field.
In the aftermath, Army Chief of Staff General Creighton Abrams dispatched a pair of generals to walk the battlefields of smoldering armor,
obtain damaged Russian equipment, and find out what the Army should
learn from that war.
The Yom Kippur War had a shock effect on the US Army, recalls Karber, who participated in what came to be known as the Starry-Baer panel,

H O O V E R D IG E ST Fall 2016 123

named for the officers who oversaw it. It challenged decades of accumulated
assumptions.
What the Army learned from the Yom Kippur War was that powerful new
antitank weapons, swift-moving formations cutting across the battlefield,
and interaction between ground formations and the air arm showed how
much the world around our Army had changed as we focused on Vietnam,
as one summary of the
Starry-Baer report
The goal is a wholesale rethinkingpos- put it. General Donn
Starrys own descripsibly even a redesignof the US Army.
tion of the circumstances four decades ago could easily describe what the Army is confronting today,
if the word Vietnam were replaced with Iraq or Afghanistan, and the Soviet
Union with Russia.
Military attention turned back to the nations commitment to NATO
Europe, Starry wrote then. We discovered the Soviets had been very busy
while we were preoccupied with Vietnam. They had revised operational
concepts at the tactical and operational levels, increased their fielded force
structure, and introduced new equipment featuring one or more generations
of new technology.
Fast forward to 2016. After a decade and a half of counterinsurgency
operations in Iraq, Afghanistan, and beyondlonger even than in Vietnamdecades of assumptions about warfare are once again being reevaluated. McMaster and other top generals have concluded that while
the United States was bogged down in the Middle East, Moscow focused
its energies on rebuilding its own forces to potentially counter Americas
tactics.
The fifty-four-year-old McMaster was one of those who spent the past
decade or so reorienting the Army away from traditional war-fighting. But he
is widely considered one of the services top strategic thinkers and his supporters insist he is the best person to figure out how to respond. He learns
and he thinks about what could be and what should be, says Sullivan, the
retired Army chief of staff.
McMasters pioneering tactics in confronting the Iraq insurgency after
the 2003 invasion were rewarded with a key role under General David
Petraeus in rewriting the Armys field manual on counterinsurgency
operations. It was not an easy job. The US military had not focused on
counterinsurgency operations in the decades since the war in Vietnam.
As a colonel and brigade commander in 2005 in Iraqs western Anbar

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H OOVER DI GEST Fa ll 201 6

province, McMaster helped pioneer a strategy that came to be known as


clear, hold, buildin which swarms of US forces backed by airstrikes
secured a city or town and built up the local security forces until they were
deemed ready to maintain security while local government institutions
could mature.
But getting the Army as an institution to focus on training and buying
the necessary equipment to fight bands of terrorists and guerrillas hidden
in population centersinstead of big tank formations like the Iraqi Republican Guard it clobbered in the 1991 Persian Gulf Warproved extremely
challenging.
The steady erosion of public support for the conflictand growing angst in
Congress about the seeming lack of an endgamedidnt help.
What is taking place in Ukraine, however, is seen as a game-changer.
McMaster and the study team he has put together believe their work could
have huge impact on what the Army buys, how it trains, and how its units
are structured for years to comemaybe even as much as the Yom Kippur
War did.
PROXY FIG HT
The Army has a long history of trying to learn from wars it didnt fightand
fold the battlefield lessons into its own arsenal.
A decade before the carnage of the American Civil War, George McClellan, who later became the commander of the Union Army, was an official
observer of the European armies engaged in
the Crimean War, which
As a colonel and brigade commander
Russia lost to an alliance
in 2005 in Iraqs western Anbar
of France, Britain, the
province, McMaster helped pioneer
Ottoman Empire, and
a strategy that came to be known as
Sardinia. That conflict
clear, hold, build.
is widely considered
the first modern war, in
which mass-produced rifles, explosive shells, mines, and armored landing
craft were first used. John Pershing, who commanded allied forces in World
War I, had also previously observed the Russo-Japanese War.
But the current thinking of McMaster and his top aides on what the
Ukraine war might mean for the United States is eerily parallel to the experience of the early 1970s. That is when the US military had been distracted
by another guerrilla war, in Vietnam, while the Soviet Unions military grew

H O O V E R D IG E ST Fall 2016 125

bolder and more sophisticated, posing a new threat to NATO, the Western
military alliance.
Its not the actual 1973 war that the Army believes parallels the modernday conflict in Ukraine but rather the Armys approach afterward in
digesting its lessonsand folding them into its own war plans. The study
of that earlier war serves as a useful model for analyzing the conflict in
Ukraine, says Colonel Kelly Ivanoff, a field artillery officer and top aide to
McMaster, who adds that the detailed undertaking to study the 1973 war
was to profoundly influence the development of the US Army for the next
fifteen years.
The Russia New Generation Warfare study will examine the Ukraine
theater for implications to Army future force development, with emphasis on
how Russian forces and their proxies employed disruptive technologies, he
added.
The effort, just getting under way, is focused on twenty separate warfighting challengesincluding maintaining communications in the face
of cyberattacks; developing a greater degree of battlefield intelligence;
redesigning Army combat formations and tactics; and identifying new air
defenses, weapons, and ways to employ helicopters.
Indeed, where the Yom Kippur War analogy reaches its limits, say close
observers, is the way in which Russia has also employed other, nonmilitary
powerfirst during the Russian military annexation of the Ukrainian peninsula of Crimea in 2014 and
then in its ongoing proxy
The Army hasnt worked on such
war in eastern Ukraine.
issues since the end of the Cold War.
They looked at what we
were doing in the early 90s
and some of what we were saying we wanted to do and went one better, said
Sullivan, who served as Army chief of staff from 1991 to 1995 and now runs
the Association of the US Army, an advocacy group. They started adding
the special operating forces, which included diplomats, people who were
subverting [the Ukrainian government] from the inside. Its a hybrid.
Now, he said, the Army is trying to apply what we learned about the
way they are using their little green menpeople who are subverting the
governments.
That is not to say that the Russian army and its proxies are ten feet tall.
The Ukrainian army is credited with deterring an all-out Russian invasion.
And the briefing that has been shared at the highest levels of the Army and
with a number of foreign allies points out that the Russian military shrank

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H OOVER DI GEST Fa ll 201 6

dramatically in size between 1985 and 2015. And its biggest weakness is
widely considered its conscript army, which has limited training and poor
morale.
General Starry, who led the Yom Kippur War after-action review, concluded that the quality of the soldiers ultimately can carry the daynot numbers.
It is strikingly evident, he wrote later, that battles are yet won by the
courage of soldiers, the character of leaders, and the combat experience of
well-trained units.
But combined with Moscows efforts to upgrade its nuclear forces, what
has been on display in eastern Ukraine and more recently in its military foray
into Syria is expected, at least by the generals, to change the US Army for a
long time to come.
Reprinted by permission of Politico (www.politico.com). 2016 Politico
LLC. All rights reserved.

Available from the Hoover Institution Press is Nuclear


Security: The Problems and the Road Ahead, by
George P. Shultz, Sidney D. Drell, Henry A. Kissinger,
and Sam Nunn. To order, call (800) 888-4741 or visit
www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 127

CH I NA

Chinas Deep
Logic
A big countryone thats always sought a big role
in the world.

By Miles Maochun Yu

hile armed conflicts rage in Syria, Iraq, and other trouble


spots, a major conflagration that may involve some of the
worlds most powerful sovereign powers, including the
United States, China, Japan, and even Russia, is brewing in

earnest in the South China Sea. At the center of this conflict are Chinas extravagant maritime and territorial claims for almost the entire South China Sea,
provoking most countries in the region, upsetting key stakeholders along the
worlds busiest commercial shipping lanes, and challenging key international
maritime laws and interpretative frames of sovereignty and territorial integrity.
But Chinas actions should not be viewed as simply a reflection of the normal
rise and fall of nations animated by proverbial fears and self-interest. They
follow an inexorable logic of Chinese history, and are deeply rooted in Chinas
long-standing strategic culture, the key elements of which are as follows.
SINOCENTRISM
During Chinas long history, there has never been a willing acceptance of
sovereign equality among nations big and small. At the core of Chinas

Miles Maochun Yu is a member of the Hoover Institutions Working Group on the


Role of Military History in Contemporary Conflict. He is a professor of East Asia
and military and naval history at the United States Naval Academy.
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H OOVER DI GEST Fa ll 201 6

strategic culture lies a Sinocentrism, which places China at the pivotal spot
of the world with a moral responsibility to rule all under heaven with Chinas
superior and refined culture and institutionsa political philosophy comprehensively illustrated in a 2010 manifesto by a military officer titled The
Chinese Dream.
There has never been such a thing in the world as a nations peaceful rise,
Senior Colonel Liu Mingfu of the Chinese Peoples Liberation Army (PLA)
wrote in the three-hundred-page bestseller in China. China possesses a
superior cultural gene needed to become the worlds leader.
By serendipity or by design, Chinese Supreme Leader Xi Jinpings overall political platform is also called the Chinese Dream. China therefore
is not simply a country of consequence, but a civilizational block that
serves to inspire the world to be more like China and accept Chinas way of
governance.
In fact, Chinas unshakable sense of victimhood and humiliation, vigorously
promoted by the government for decades, is not just about Chinas suffering since the Opium War of the 1840s at the hands of Western imperialists.
It also springs from resentment and loathing that the magnificent Celestial
Kingdom has been bullied by far less sophisticated, morally inferior little
countries with little or no refined cultural heritage and intellectual splendor.
Translated into the South China Sea gambit, Chinas aggressive behavior
and excessive maritime claims can boil down to simply a matter of correcting the pattern of the Big Country not being respected by these pesky Little
Countries around the South China Sea, especially the Philippines and Vietnam, the two countries that resist the Big Country the most.
One doesnt even have to speculate about this motivation. Chinas top officials are explicit that daguo (Big Country) should not be resisted by xiaoguo
(Little Countries). Since March 2013, Supreme Leader Xi Jinping has been
espousing the core of his foreign policy, neatly called Big Country Diplomacy. Former PLA navy chief Liu Huaqing repeatedly told his American
counterparts in the 1990s that his problem was not China, as the Big Country, bullying the Little Countries, but the other way around. Chinas staterun media, most noticeably the jingoist Global Times, have justified Chinas
bellicosity toward its many neighbors as punitive actions to teach the Little
Countries lessons and restore their submission to the Big Country.
China is a big country and other countries are little countries, and thats
just a fact, Foreign Minister Yang Jiechi told his Singaporean counterpart in
2010. His successor, Foreign Minister Wang Yi, while insisting China would
be benevolent toward smaller countries in the South China Sea region,

H O O V E R D IG E ST Fall 2016 129

expressly told the world in March 2014 that we will never accept unreasonable demands from little countries.
THE WAY OF THE KINGS
Closely related to Sinocentrism is Chinas seasoned approach to conquest
by moral persuasion, subjugation by voluntary acknowledgement of Chinas
supremacy, an element of the Chinese strategic culture known as wangdao, or
the Way of the Kings. Under this scheme, blunt force will be used only if/when
Little Countries do not accept Chinas wangdao and refuse to kowtow to the
magnanimous and benevolent China. If they choose to continue resisting Chinas generous offer of lordship and suzerainty, then China feels justly snubbed.
China therefore tends to think of itself as the victim of insufficient respect
from the pesky little countries which naturally deserve punishment and
armed repulsion.
Consequently, from Chinas perspective, all the military buildup in the
South China Seareclaiming islands for military airstrips, installation of
military radar facilities and air-defense missile batteries, deployment of
supersonic fighter jets and a fleet of warships in the disputed areais defensive in nature, a just and fair way of readjusting the corrupted regional and
world order to its rightful, original setting.
However, the Way of the Kings is not just about concepts, approaches,
and obsolete mentality. It also embodies a strong sense of strategic realism.
A major strand of this realism can be discerned from Chinas penchant for
deliberately increasing
its military bravado and
China does not concede sovereign
conducting provocative
brinksmanship as a
equality among nations big and small.
bargaining chip before
a major negotiation session. This pattern can be well documented in Chinas
military behaviors in the Korean War, the Vietnam War, and most conspicuously the current South China Sea imbroglio.
TRUST AND DECEPTION
China is the victim of its own strategic lore. The core of Chinas strategic
thinking was born in the Warring States period more than two thousand
years ago. It was a time of many brilliant strategists and prolific writing on
war and strategy. Since then, there has been little innovative thinking in military strategy that could be considered superior to the rich military strategic
writings and treatises of the Warring States period.

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H OOVER DI GEST Fa ll 201 6

The Warring States period was known for its internecine wars among
numerous small Chinese states vying for supremacy. It was a great competition more or less among equals, with no state possessing the ability to defeat
its adversaries easily. These conditions elevated the importance of military
and political alliances in order to overwhelm ones chief rivals. Yet once the
short-term purpose of
defeating a common
We will never accept unreasonable
enemy was completed,
former allies quickly
demands from little countries.
turned on each other by
forming new alliances of expediency. This pattern of deception and opportunism was commonly accepted at the time as perfectly normal, and no one
held grudges against perfidious allies because to all, everything was a game
of power and a struggle for supremacy. No principle was violated, as the only
principle was one of using each other for ones selfish objectives.
Yet the alliance-building during the Warring States period has left an indelible mark on todays Chinese strategic culture, one that puts a premium on
short-term expediency and deception, not on strategic trust and long-term
friendship.
Thus we have seen a fundamental breakdown in trust between China and
most of its neighbors, especially the ASEAN countries that dispute Chinas
maritime claims. Whatever China does, it does not show consistency and
trustworthiness, as Beijings calculations are often nakedly awkward and
blatantly illogical.
Take Chinas main approach to the ASEAN nations. On one hand, China
accepts the ASEAN Code of Conduct as a binding rubric for all. On the other,
China also emphatically rejects any ASEAN collective statement on the
disputes, leaving everyone suspicious of Chinas motives. Here, the Warring
States strategic culture is on full display.
Another example: China is a member of the UN Convention on the Law of
the Sea (UNCLOS), yet China absolutely denies any legitimacy of any international arbitration, which is required by specific provisions of the UNCLOS.
As a member of the UNCLOS, China has resolutely refused to participate
in the maritime arbitration case brought up by the Philippines. In so doing,
China is not helping to build international trust regarding its sincerity.
Again, the specter of the Warring States strategic culture is haunting China,
severely damaging Chinas image.
Finally, China has loudly protested any role of the United States in the
South China Sea dispute, chastising the United States as an outsider

H O O V E R D IG E ST Fall 2016 131

country geographically far away, without any sovereign, maritime, or territorial dispute with China in the South China Sea. Asia is for Asians. Yet
China defeats its own rhetoric by actively seeking the involvement of Russia,
decidedly another outsider country,
in the South China Sea foray. Russian
Chinese strategic culture
and Chinese foreign ministers recently
puts a premium on shortissued a joint statement voicing objecterm expediency and decep- tions to the role played by the United
States as an outsider country. The
tion, not on strategic trust
irony is obvious.
and long-term friendship.
In all these cases, China defies international good will and international law at the expense of its own stature,
exhibiting the classic Warring States syndrome that has permeated Chinas
strategic thinking for millennia.
Subscribe to the online Hoover Institution journal Strategika (www.
hoover.org/publications/strategika), which analyzes issues of national
security in light of conflicts of the past. 2016 by the Board of Trustees of
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H OOVER DI GEST Fa ll 201 6

I N T E LLI G E N C E

The Snowden
Cure
America and its intelligence establishment have
recovered from Edward Snowdens disclosures
and are better off for them.

By Jack Goldsmith

hree years ago, the Guardian published the first story based on the

Key points

huge archive of documents Edward

Forced into a
healthy transparency,
the intelligence community has learned
to explain itself to the
public.

Snowden stole from the National

Security Agency while working as an NSA


contractor. Thenattorney general Eric Holders
Justice Department quickly charged Snowden
with felonies for theft of government property
and mishandling classified information. This May,
however, Holder praised Snowden. I think that he
actually performed a public service by raising the
debate that we engaged in and by the changes that
we made, Holder said.
This seems like an improbable claim. Snowden
compromised scores of surveillance techniques,

Intelligence programs have been


shown to be valuable
and well-regulated.
Disclosures show
that the secret court
monitoring the NSA
is doing its job.
Laws underpinning
secret programs have
emerged stronger.

representing billions of dollars of investments


Jack Goldsmith is a senior fellow at the Hoover Institution and co-chairman of
Hoovers Jean Perkins Working Group on National Security, Technology, and Law.
He is the Henry L. Shattuck Professor at Harvard Law School.
H O O V E R D IG E ST Fall 2016 133

over many years. US firms that secretly cooperated with government intelligence agencies stopped doing so to the extent they could, and public defiance
became the business-compelled norm. Firms made encryption more readily
available and easier to use, which made it harder for the US government
to monitor communications and access data. Many foreign governments
responded with countermeasures like data localization laws, tighter privacy
rules, and closer judicial scrutiny of US collection practices.
The Defense Department claimed that the scope of the compromised
knowledge related to US intelligence capabilities as a result of Snowdens
disclosures was staggering. This claim is unverifiable but seems plausible in
The intelligence community opened
up. It got much better at talking to the light of the breadth of and
reaction to the disclosures.
public. And the sky did not fall.
The intelligence losses
extend beyond counterterrorism, the main context in which these issues are
typically discussed. NSA collections undergird every element of US national
security and foreign policyincluding its extensive military operations
around the globe, its pervasive diplomatic engagements, and its numerous
economic negotiations and initiatives. Knowing what an adversary or other
foreign intelligence target is doing or planning gives the United States a huge
advantage in its myriad international affairs, and is a central pillar of American power. Such knowledge is harder to come by because of Snowden.
And yet Holder is still right. At the dawn of the Snowden revelations, many
wondered whether the US intelligence community would be destroyed. Some
hoped that it would. But the opposite has happened: despite undoubted intelligence losses, new collection barriers, and diplomatic embarrassments, the
community has emerged as a stronger organization despite, indeed because
of, Snowden.
WHAT HATH SNOWDEN WROUGHT?
Snowden forced the intelligence community out of its suboptimal and
unsustainable obsession with secrecy. Before the unauthorized disclosures,
we were always conservative about discussing specifics of our collection
programs, based on the truism that the more adversaries know about what
were doing, the more they can avoid our surveillance, Director of National
Intelligence James Clapper said in 2013. Post-Snowden, the intelligence
community operates on the principle that secrecy is not an absolute value,
but one that needs to be traded off for other values, including domestic

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H OOVER DI GEST Fa ll 201 6

legitimacy. Snowden made it realize that, in the words of former NSA director Michael Hayden, although the public cannot be briefed on everything,
there has to be enough out there so that the majority of the population
believe what they are doing is acceptable.
Forced transparency meant that the intelligence community had to justify
itself before the American people for the first time everabout what it did
in the domestic arena and abroad, about the legality of and accountability
for its actions, and about its importance to US national security. It had to
open itself up to thorough scrutiny and judgment by many new institutions,
including the Presidents Review Group and a Privacy and Civil Liberties
Oversight Board (PCLOB). Initially this was a painful, even bewildering processthe intelligence community had no experience at explaining itself, and
thus wasnt any good at it. But the transparency turned out to bring many
benefits.
First, the intelligence community opened up. It got much better at talking
to the public. And the sky did not fall.
Second, the intelligence community had a good story to tell. Credible
public evidence emerged that the NSA was a thoroughly accountable institution performing a vital
intelligence role. Every
program was authorized
Despite undoubted intelligence
and approved, and whatever losses, new collection barriers,
one thinks of the programs,
and diplomatic embarrassments,
it was not a case of runthe intelligence community has
ning amok or exceeding
emerged stronger.
its authority, said civil
libertarian and Chicago law
professor Geoffrey Stone, a review group member. And the value of NSA
programs was publicly revealed to a greater degree than ever. The PCLOB
concluded that the Section 702 PRISM and upstream programs played a
key role in discovering and disrupting specific terrorist plots aimed at the
United States and other countries. These claims by outsiders to (and in
some instances, adversary critics of) the intelligence community are significantly more credible, and legitimizing, than when the community itself makes
the same sorts of claim.
Third, the main criticisms of the NSA ended up having silver linings. It
emerged from the Snowden documents (and further voluntary releases by
the government) that the NSA sometimes had problems complying with
judicial orders, usually because of the difficulty of meshing legal directives

H O O V E R D IG E ST Fall 2016 135

with extraordinarily complex technical collection processes. And yet these


embarrassments also showed that the FISA court that monitors the NSA in
secret was not, as many claimed, a rubber stamp. It was, instead, an important independent check on NSA activities. As a result of Snowden, the FISA
court is a much more credible institution that can and in the future will be
relied upon more thoroughly to monitor expanded NSA activities in secret.
Another criticism of the NSA was that its aggressive collection processes
abroad did not consider the rights and interests of foreign individuals
and firms. The main response was Presidential Policy Directive 28, which
imposed restraints on collection abroad in the interests of non-US citizens.
PPD 28 does not have sharp teeth and, while it has reportedly been a pain to
implement, it will probably not have a material impact on US collection practices. Like many post-Snowden reforms, it imposes process and oversight
constraints and forces the NSA to be more prudent in its collection practices.
PPD 28 (along with the Judicial Redress Act, which extended Privacy Act
protections to foreign citizens) has the side benefit that the United States
can now proudly and truthfully claim to have the most robust protections for
noncitizens of any signals collection agency in the world.
Fourth, and perhaps most surprising, the intelligence community has
been able to maintain and
strengthen the legal authoriAn outside review concluded that
ties for its collection practices. The bulk telephone
clandestine surveillance played a
metadata program was
key role in discovering and disruptlegally and on the merits the
ing specific terrorist plots.
most controversial program
that Snowden revealed, and the one that the NSA seemed least interested in
preserving. The USA Freedom Act made some important reforms to this programmost notably, by replacing NSA collection and storage of the metadata
with carrier storage of the data and by requiring more-limited NSA querying
of the data pursuant to court approval. And yet the NSA has ended up in a
stronger position as a result. It gets access to a greater volume of call records
than before, according to the NSA general counsel, and probably at a lower
cost, since it no longer needs to store and organize the massive quantities of
data. And even more important, the program has now been vetted publicly
and expressly baked into the legal system, giving it a legitimacy and almost
certainly a longevity that it never could have achieved in secret.
The improbable preservation and strengthening of the bulk telephone
metadata programthe least valuable and hardest-to-justify of the

136

H OOVER DI GEST Fa ll 201 6

programs that Snowden revealedis emblematic of the types of changes


Snowden wrought.
STRONG AND SOUND
Few if any important intelligence collection programs have ended because
of Snowden, and the USA Freedom Act reforms actually expanded some
intelligence community authorities. The intelligence community has had to
subject itself to more scrutiny and process checks, and it has had to trim its
sails a bit to make its practices more proportional to the ends it seeks. But
the transparency resulted in public debates that concluded that the NSA
practices were worth preserving overall.
From the baseline of what almost everyone expected when the scale of
Snowdens revelations first became apparent, the intelligence community,
and especially the NSA,
have emerged in astonThe FISA court that monitors the
ishingly good shape.
The NSA is still very
NSA in secret was not, as many
much in the business
claimed, a rubber stamp. Postof aggressive signals
Snowden it is a much more credible
intelligence around the
institution.
globe. Its domestic legal
authorities are sounder. Its value is more apparent to the American public. It
is much more adept at public diplomacy. And its central and expanding role
going forwardnot just for signals intelligence collection, but for cybersecurity and offensive cyber operationsis secure.
These are but some of the public services for which the US government
has Snowden to thank.
Reprinted by permission of Lawfare, a project of the Harvard Law
School/Brookings Project on Law and Security. 2016 The Lawfare Institute. All rights reserved.

Available from the Hoover Institution Press is Speaking


the Law: The Obama Administrations Addresses
on National Security Law, by Kenneth Anderson and
Benjamin Wittes. To order, call (800) 888-4741 or visit
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H O O V E R D IG E ST Fall 2016 137

ED U CATI ON

One Brainchild
Left Behind
The federal drive for school reform has ground to a
halt. Now the long struggle is back in the hands of
states and communities.

By Paul E. Peterson

s the United States entered the twenty-first century it was trying to come to grips with a serious education crisis. The country
lagged behind its international peers, and its half-century effort
to erode racial disparities in student achievement had made

little headway. Many people expected action from the federal government.
George W. Bush and Barack Obama, the centurys first two presidents,
took up the challenge. For all their differences, they shared a surprisingly
common approach to school reform: both preferred a regulatory strategy.
In 2001, Bush persuaded Congress to pass a new law, No Child Left Behind
(NCLB), which created the nations first federal regulatory regime in education. When NCLB ran into trouble, Obama invented new ways of extending
the top-down approach. Unfortunately, neither president came close to closing racial gaps or lifting student achievement to international levels.
The Obama administration is now packing up and heading home, leaving the regulatory machine in ruins. A new federal law, the Every Student
Paul E. Peterson is a senior fellow at the Hoover Institution and senior editor
of Education Next. He is also the Henry Lee Shattuck Professor of Government
and the director of the Program on Education Policy and Governance at Harvard
University.
138

H OOVER DI GEST Fa ll 201 6

Succeeds Act (ESSA), has unraveled most of the federal red tape. Although
student testing continues, the design and use of tests is now a state and local
matter.
REGULATION TO THE RESCUE
The regulatory effort was bipartisan from the beginning. Senator Edward
Kennedy and President Bush worked together to persuade Democrats and
Republicans to pass NCLB, which was signed into law in January 2002.
Every state was henceforth expected to set proficiency standards toward
which students had to make adequate progress each year until all schools
had crossed that bar in 2014. The law also required annual statewide tests in
grades three through eight and again in high school, and states had to publish
the performance of students on these tests for every school. If students were
not making progress, families could pick another public school within the district. If that didnt work, students were to have access to after-school study
programs. And if that failed, schools were to be reconstituted under new
leadership.
All these steps required a vast number of regulations. But school districts
still found ways of undermining federal objectives. They instituted byzantine
procedures that parents had to navigate before they could exercise choice.
Reconstitution of low-performing schools often consisted mostly of window
dressing.
Still, NCLB did shine a spotlight on the public schools, and accountability
looked for a while as if it could drive the achievement of Americas minority
students forward. Between 1999 and 2009 black fourth-graders gained 18
points in math and 14 points in reading on the authoritative National Assessment of Educational Progress (NAEP). In eighth grade, the math gains were,
again, as much as 13 points, though reading gains were minimal. The story
was virtually identical for Hispanic students. Even whites showed some signs
of improvement.
But signs of steady improvement did little to bolster political support for
the law. Instead, NCLB absurdities were becoming increasingly apparent.
With nearly every school failing to bring all of its students up to full proficiency, almost all of them were at risk of reconstitution. Criticisms escalated,
many justified. For instance, the federal definition of failing schools unfairly
picked on those serving disadvantaged students. But the critiques of NCLB
quickly degenerated into blanket attacks on standardized tests: The tide on
testing is turning, said Randi Weingarten, president of the American Federation of Teachers, who then called for NCLB revisions that would address

H O O V E R D IG E ST Fall 2016 139

the root cause of test fixation. Even US Secretary of Education Arne Duncan, averring that testing was sucking the oxygen out of the room, promised to do something about it.
RACE TO THE TOP
Responding to growing opposition, the Obama administration invented an
alternative way of perpetuating regulatory reform. Duncan announced Race
to the Top (RttT), a competitive grants program that had been authorized
and funded by the education stimulus package. At $4 billion, the money
amounted to less than two-tenths of 1 percent of school expenditures in the
United States. Yet the idea of a competitive race among states to meet federal goals captured media attention. Indeed, competition proved so politically
successful the Department of Education built on it by allowing all states to
seek a waiver of most NCLB requirements by submitting RttT-like reform
plans, including test-based teacher evaluations and the setting of standards
similar to the Common Core State Standards. Eventually, forty-three states,
the District of Columbia, and Puerto Rico were granted waivers from NCLB,
in effect gutting the federal law.
But Secretary Duncan had left himself badly exposed by constructing its
rules on a series of questionable administrative maneuvers rather than a
solid piece of congressional legislation. Tea party activists attacked Common Core, objecting to what
the Heritage Foundation
called the administrations
School districts always found ways
intent to nationalize the
of undermining federal objectives.
content taught in every
public school across America. And teachers unions tightened the screws
by balking at unfair evaluations of teacher performance. Old tests are being
given, but new and different standards are being taught, National Education
Association President Dennis Van Roekel declared. This is not accountabilityits malpractice.
Meanwhile, two authoritative surveys of student performance cast doubt
on the success of Obamas reforms. Between 2009 and 2012, the performance
of fifteen-year-olds on tests administered by the International Student
Assessment (PISA) fell by 6 points in math and 2 points in reading. NAEP
performances of both black and white students in eighth grade fell by 1 point
in math and rose by just 2 points in reading between 2009 and 2015. At the
fourth-grade level whites registered no gains in math and black students
gained but a measly 2 points. The picture in reading was pretty much the

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H OOVER DI GEST Fa ll 201 6

same2-point gains for blacks and whites alike. Hispanic gains were only
slightly more.
Caught in the maelstrom, the Obama administration was unable to defend
against a bipartisan move on Capitol Hill to end waivers altogether by enacting, for the first time
since 2002, a new
Accountability looked for a while as if it
federal education
could drive the achievement of Amerilaw, ESSA. The law
requires annual testcas minority students forward.
ing but leaves it to
the states to decide how the testing will be done. Most of the other regulations have been removed, shifting authority over schools back to states and
localities. Nor is there much appetite for new accountability rules at the state
level. If continued student testing is to have an impact on reform, it will be
due to the better information parents receive about the amount of learning
taking place at each school, not top-down directives for improvement. The
Bush-Obama era of reform via federal regulation has come to an end. The
regulated have captured the regulators.
Reprinted from Education Next (www.educationnext.org), published by
the Hoover Institution. 2016 by the Board of Trustees of the Leland
Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is The


Future of School Choice, edited by Paul E. Peterson. To
order, call (800) 888-4741 or visit www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 141

ED U CATI ON

School of Hard
Knocks
For a quarter of a century now, charter schools
have been trying to provide disruptive
innovation. A summary of what weve learned.

By Chester E. Finn Jr. and Brandon L. Wright

ast summer saw the twenty-fifth anniversary of the enactment


of Americas first charter school law. Minnesotas then-governor
Arne Carlson signed it on June 4, 1991. This statute gave birth not
only to a source of new schools for kids who need them but also to

a structural reform of public educations governance and delivery systems.


Its as close as K12 schooling has come to what Clayton Christensen calls
disruptive innovation.
This is worth celebrating. But as we applaud this movement and the bold
Minnesota lawmakers who launched it, lets also recall what led up to it and,
one might say, made it almost inevitable.
The onset of chartering was no lightning bolt. This audacious innovation
had multiple ancestors and antecedents. School choice has colonial roots
and was supported by early theorists such as John Stuart Mill. But it got a
Chester E. Finn Jr. is a senior fellow at the Hoover Institution, former chair
of Hoovers Koret Task Force on K12 Education, and president emeritus of the
Thomas B. Fordham Institute. Brandon L. Wright is the managing editor and a
policy associate at the Fordham Institute. They are the co-authors, with Bruno V.
Manno, of Charter Schools at the Crossroads: Predicaments, Paradoxes,
Possibilities (Harvard Education Press, 2016).
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H OOVER DI GEST Fa ll 201 6

big boost in 1962 when Milton Friedman published Capitalism and Freedom, which described the potential of market forces to strengthen educational quality, efficiency, and productivity. Friedman favored a competitive,
private-sector model and did not think government should deliver education directly. Instead it would furnish needy families with vouchers that
could be redeemed for education at any state-approved school. Friedman
expected market forces to cause bad schools to improve or close, motivate
decent schools to get better, and invite people to open new ones.
Four years after Friedmans book, the eminent sociologist James Coleman
rocked the education world (and more or less contradicted the central premise of President Johnsons year-old Elementary and Secondary Education
Act) by showing that there is no reliable relationship between what goes into
a school by way of funding, programs, and rules and what comes out by way
of learning. This forms the backdrop to the past half century of what we now
know as standards-based reform, which includes the crucial charter school
concept of holding a school accountable for its results (measured, for better
and worse, primarily by test scores).
Along came A Nation at Risk, the 1983 report that jarred the country with
news that its K12 system wasnt working nearly well enough. Its release was
followed by a clutch of governors willing to try new approaches to producing stronger educational
outcomes, including givCharter schools trace their origins to
ing far greater freedom
both left and right, Democrats and
to schools that did so.
Governors are ready
Republicans, educators and econofor some old-fashioned
mists, union leaders and governors,
horse-trading, declared
scholars and doers.
Tennessees then-governor Lamar Alexander. Well regulate less if schools and school districts will
produce better results.
At the same time, frustration was building with the efficiency and effectiveness of myriad governmental services as traditionally delivered. We were
witnessing a new impulse to reinvent government by outsourcing some of
its work to others who, working independently, might do it better and perhaps more economically.
In 1974, Ray Budde (a schoolteacher, principal, and eventual University
of Massachusetts faculty member) had published a paper that described a
form of chartering. His concept was focused within districts and on existing
schools and designed to give teachers a key role in creating new programs

H O O V E R D IG E ST Fall 2016 143

and departments within them. Buddes initial paper got little response, but
he stuck with the idea. After A Nation at Risk and myriad other studies and
reports called for sweeping K12 reforms, he tried again with a 1988 treatise
called Education by Charter: Restructuring School Districts. This one caught the
eye of the late Al Shanker, who cited it in an influential speech at the National
Press Club the same year (as well as in a later New York Times column, A
Charter for Change).
Shanker expanded Buddes focus, still seeing chartering as a way to foster
teacher professionalism by allowing them to start new schools. He sought to
create a quasi-marketplace in which a school system might charter schools
distinctly different in their approach to learning. Parents could choose which
charter school to send their
children to, thus fostering
competition.
The best charters have done an
These ideas reached
extraordinary job educating innerMinnesota,
where they
city children.
caught the attention of a
group of educators and policy innovators including Joe Nathan, Ted Kolderie,
Curtis Johnson, and state senator Ember Reichgott, a Democrat who would
introduce and help pass that states pathbreaking charter law. Reichgott
encountered fierce opposition at the outset, led primarily by the two state
teachers unions. Her bill twice failed to clear the legislature. The following
year, however, she got a boost when the Washington-based Progressive Policy
Institute published the report Beyond Choice to New Public Schools: Withdrawing the Exclusive Franchise in Public Education. Kolderie, its author,
summarized it this way:
The proposal outlined in this report is designed to introduce the
dynamics of choice, competition, and innovation into Americas
public school system, while at the same time ensuring that new
schools serve broad public purposes.
By 1991, Reichgott had enlisted more legislative allies from both sides of
the aisle. She was finally able to pass her plan, enabling Republican governor
Carlson to sign it. Fifteen months later, City Academy opened in St. Paul, and
soon after that, California enacted the countrys second charter law.
TOUGH LOVE
With so many tributaries, its no surprise that the charter stream contains
many different life forms. Its origins come from left and right, Democrats

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H OOVER DI GEST Fa ll 201 6

and Republicans, educators and economists, union leaders and governors,


scholars and doers, from long ago and very recently. Just as important, its
founders harbored disparate ideas about why it was needed and what it could
and ought to do. Its wrong, therefore, to try to tack a single origin story
onto the charter phenomenon. In many ways, it was the composite (if not the
consummation) of many impulses, the response to many needs, the embodiment of many hopes.
Supporting charter schools requires tough love. It isnt enough to create
them and let kids attend them. They also need to be run with integrity;
their books need to balance; their pupils must be safe; and above all, their
academic achievement has to be strong, especially when gauged by student growth.
Some of Americas highest-achieving schools are charters, but so are some
of its worst. Averaging across all 6,800 of them, some critics declare that
their performance is roughly equal to their district counterparts. But such a
superficial analysis ignores their variabilitythe reality that they range from
dismal to superb. Lets look a little more closely.
A quarter century in, charter schools are still absent from seven states,
and seventeen other jurisdictions have fewer than fifty each. Forty-four
states have charter-enabling laws on the books, but these differ so widely
that what is possible in one state cannot be accomplished across the border. So its no surprise that charter performance differs widely by state.
Stanfords Center for
Research on Education
Milton Friedman expected marOutcomes (CREDO)
ket forces to cause bad schools to
reported in 2013 that
improve or close, motivate decent
between 20067 and
201011, charters
schools to get better, and invite
impact on student readpeople to open new ones.
ing and math achievement varied by as much as two hundred and forty-five learning days per
year depending on where the schools were. In Rhode Island, for example,
charter pupils gained one hundred and eight days in math and eighty-six
in reading compared to similar district students. In Nevada, on the other
hand, charter-goers lost one hundred and thirty-seven days in math and
one hundred and eight in reading.
Performance also varies widely by school type. No excuses charters, for
example, are characterized by high behavioral and academic expectations for
pupils, longer school days and years, curricula geared toward college entry,

H O O V E R D IG E ST Fall 2016 145

and robust school cultures. They accept no excuses for failure, either by
children, teachers, or the schools themselves. The best of themincluding
KIPP, Success Academies, YES Prep, Achievement First, and Uncommon
Schoolshave done an extraordinary job educating inner-city children, as
well as replicating their strategies in networks that can exceed a hundred
schools.
KIPP, for instance, has one hundred and eighty-three charters serving
seventy thousand kids across twenty states and the District of Columbia.
Eighty-seven percent of KIPPsters come from low-income families, yet a
majority outperform the
national average for annual
To get the most from charter schoolgrowth across all grades
ing, its clear that the school has to
and subjects. Their alumni
endureand the student has to stick are four to five times as
likely as similar peers to
around.
graduate from college with
bachelors degrees. And the Success Academies network in New York City,
led by the formidable Eva Moskowitz, now consists of thirty-four schools in
four boroughs. When the Empire State adopted the Common Cores rigorous
academic standards in 2014, 64 percent of Success Academy students met
them in English language artsversus 29 percent citywide. Nine in ten were
proficient in math, three times the rate across New York City.
By contrast, virtual charters generally yield bleak results. In the United
States there are more than three hundred such schools across twenty-six
states, enrolling more than two hundred thousand students. CREDOs recent
analysis shows that on average, virtual charter pupils achieve one hundred
and eighty fewer days of learning in math and seventy-two fewer days in
reading each year than do similar students in district schools. A brand-new
study by Civic Enterprise shows that virtual charters also lag far behind in
graduation rates.
WHERE CHARTERS DO BEST
Todays charters appear to do their best work with disadvantaged youngsters. As University of Michigan economist Susan Dynarkski recently wrote:
In urban areas, where students are overwhelmingly low-achieving,
poor, and nonwhite, charter schools tend to do better than other
public schools in improving student achievement. By contrast,
outside of urban areas, where students tend to be white and

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H OOVER DI GEST Fa ll 201 6

middle class, charters do no better and sometimes do worse than


public schools.
A 2015 CREDO study of charter performance found black and Hispanic
students gaining as much as thirty-six and twenty-six days of learning
in math and reading, respectively. Asian kids, however, saw no gain. And
white students might have been better off in other schools: those enrolled
in charters lost thirty-six days of learning in math and fourteen in reading.
One source of this disparity is school type. No excuses schools tend to
perform very well, at least when it comes to achievement growth. They also
tend to enroll students of color at disproportionately high rates. KIPPs student body, for instance, is 57 percent black and 39 percent Hispanic. And 93
percent of kids enrolled in Success Academies are children of color.
Meanwhile, more progressive white families are likely choosing charters
with missions that reflect parents dislike of traditional curricula and standardized tests. It may be that their kids are doing OK and benefiting in other
ways.
Childrens learning seems to accelerate the longer they stay in charter
schools. (Perhaps thats true of all schools.) CREDO studies indicate that
during a charter attendees first year, he or she gains, on average, seven days
of learning in mathbut
loses seven days in readVirtual charters generally yield
ing. In year two, however,
bleak results.
charter pupils show positive impacts in both subjects: forty-eight more days in math and forty-three
in reading. By year four, the gain is one hundred and eight days in math and
seventy-two in reading. To get the most from charter schooling, its pretty
clear that the school has to endureand the student has to stick around.
Oversimplified measures of charter impact communicate none of these
nuances, which is why they often lead to the misleading conclusion that charters are no better on average than district-operated schools. Parents might
wrongly conclude theres no reason to move their kids from troubled district
schools. And lawmakers may mistakenly decide that supporting charters
isnt worth the political hassle. Yet neither judgment is justified.
MAKING A GOOD IDEA BETTER
By no means are weak charters places to celebrate, sustain, or attend. But
excellent charters can work wondersespecially for kids who need them
most. School leaders, charter advocates, and policy makers just have to learn

H O O V E R D IG E ST Fall 2016 147

which models work, why theyre effective, and whom they benefit. Here are
three ways to help meet that challenge.
Better consumer information. Most parents understandably want to
send their kids to good schools, but how do they identify and select those that
will give their daughters and sons the best education? For kids to end up in
schools that serve them welland for this market to function healthilyparents need to be smart consumers with access to accurate, understandable,
and reasonably comprehensive information. They also need mechanisms to
make choosing a school relatively easy and fair, such as
For the charter market to thrive, chilone-stop-shopping arrangements, common enrollment
dren who change schools must be
systems, and school fairs.
able to take their money with them.
State report cards on
schools are a start, and macro efforts like the admirable work of GreatSchools.org provide sound, searchable, user-friendly information. But more
is needed. School choice will never work optimally for the families that need
it most until every community that supplies choices also supplies kindred
sources of assistance.
Adequate, fair funding. University of Arkansas analysts report that the
typical charter gets 28 percent less funding per pupil than nearby district
schools, largely because few charters share in the locally generated portion of
K12 funding. This uneven playing field often sets charters up for failure and
leads to an unhealthy market. We reject the view that more money automatically yields better education, but no school can afford to deliver an excellent
product in a pleasant setting without reasonable operating dollars.
The quantity of dollars isnt the whole story, either. Just as important are
the mechanisms by which those dollars are allocated. For the market to
thrive, children who change schools must be able to take their money with
them, including whatever added dollars are tied to individual circumstances
(for example, disability, disadvantage, and limited English proficiency). A
few districts have begun to move toward this sort of backpack funding. For
this change to work well, however, all the local, state, and federal dollars that
apply to a given childs education need to be in the backpackand thats a
goal no jurisdiction has yet reached.
Getting the law right. State laws set the ground rules by which charters
and their marketplaces operate. Almost every state now has some sort of
charter law on the books. Some work far better than others, however, and
many need revising.

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H OOVER DI GEST Fa ll 201 6

Chartering is a flexible instrument that can be applied to many needs and


opportunities. Lets welcome and encourage pluralism in the years ahead.
What about more high-quality career and technical education charters or
charters for gifted and talented students? Charters for art enthusiasts?
Personalized-learning charters where kids can proceed through the curriculum at their own pace? More charters for youthful offenders and former
offenders? Schools just for girls and just for boys? For athletes or for classicists? Character-and-civics-centric charters? Schools for rural residents? For
kids whose posh but rigid suburban districts arent meeting their needs?
Bona fide school choice means plenty of different options, and chartering is
the surest mechanism in America today to make these available. Lets use it
to the max.
Reprinted by permission of Education Excellence (www.edexcellence.net).
2016 The Thomas B. Fordham Institute. All rights reserved.

Available from the Hoover Institution Press is What


Lies Ahead for Americas Children and Their Schools,
edited by Chester E. Finn Jr. and Richard Sousa. To
order, call (800) 888-4741 or visit www.hooverpress.
org.

H O O V E R D IG E ST Fall 2016 149

T H E ENVI RONME NT

Climate Wars
Heat Up
Rancor over climate change has turned ExxonMobil
into a scapegoatfree speech be damned.

By Richard A. Epstein

eople seem more divided than ever on policy mattersa point that
is especially evident in the disputes over climate change, where
opposing sides are now pitted against each other in litigation.
On one side of the climate debate are the alarmists. To this

group, the only question is what should be done to contain the problem of
climate change. To be sure, there is ample evidence of climate change, and
even some evidence showing that some fraction of it is caused by humans.
But from this modest claim, one cannot infer that all or even a majority of
this change is attributable to the use of fossil fuels, or that any and all temperature increases carry with them a threat to the natural world. But these
alarmists, skeptics claim, exaggerate the supposed threat of global warming
to bring an end to the fossil fuel industry and force excessive and premature
reliance on expensive and unreliable solar and wind energy.
On the other side are the deniers, who dare to ignore the well-established
truth that climate change is occurring. To them, the claim that 97 percent

Richard A. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover
Institution and a member of the steering committee for Hoovers Working Group
on Intellectual Property, Innovation, and Prosperity. He is also the Laurence A.
Tisch Professor of Law at New York University Law School and a senior lecturer
at the University of Chicago.
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H OOVER DI GEST Fa ll 201 6

of climate experts believe in manmade global warming is wholly misleading, if not downright fraudulent. After all, scientists who agree that humans
contribute to global warming could have huge disagreements on the source,
magnitude, and consequences of the effect. Understanding the climate
change literature requires some heavy legwork to take into account the interactive effects of human actions and natural events.
The climate skeptics
have a point. An incident
from a decade ago shows
A theory of freedom of speech that
how tricky the analysis
denies an opportunity for scientific
of the science can get.
and political debate restricts the
Professor Naomi Oreskhigh value speech that is entitled
es, then at the University
to constitutional protection.
of California, analyzed
some thousand papers
on global warming and concluded that over 75 percent of them backed the
view that global warming was largely attributable to human intervention.
But when Benny Peiser of Liverpool University looked at the same data, he
concluded that only one-third could be read to support the consensus view,
and that of those, only 1 percent did so explicitly. Oreskess paper has been
cited from President Obama on down while Peisers paper has been rejected
not because it was wrong but because its conclusions were, so it was said,
already widely known. More recent studies in line with Peisers have been
met with a similar skeptical response.
AN INCONVENIENT HYPOTHESIS
In principle, it should be possible to separate scientific issues from political.
But in todays overheated political environment, that is difficult. The latest example of the politicization of climate change comes via twenty state
attorneys general, led by New York state attorney general Eric Schneiderman, who are bringing civil and criminal legal actions against ExxonMobil. A
similar course of action has been proposed by Senator Sheldon Whitehouse
of Rhode Island, who advocates investigations of fossil fuel companies for
possible violations of the civil and criminal law.
To folks like Schneiderman, progressive forces of good must vanquish the
reactionary forces of evil, like ExxonMobil. In articulating his view at a press
conference recently in New York, Schneiderman started from a position of legal
strength because the 1921 New York Martin Act, passed to deal with financial
manipulation, gives the state attorney general exceptional powers to sue to stop

H O O V E R D IG E ST Fall 2016 151

fraudulent behavior in financial markets. The distinctive feature of the law is that
it dispenses with the need of the New York attorney general to prove three of the
five elements of common law fraudscienter (knowledge), reliance, and damagesso that all that is left to prove is a false statement of some material fact.
Yet even the Martin Act has its limitations. Some material false statements
are easy to spot: consider the CEO who publicly states that his corporation
has gold in its safe when the
safe is empty. But it is a very
Understanding the climate change
different matter to claim that
arguments about the comliterature requires hard study. One
plex causes of the current clineeds to take into account the intermate trends, and projections
active effects of human actions and
of future climate, are facts
natural events.
that can easily be branded as
false. The usual way in which to hash these matters out is to have an intelligent
debate on the pros and cons of each side. And a debate over these matters
should receive the highest level of constitutional protection, given that it would
be about finding the truth, and using that information to guide political action.
The Martin Act aside, a theory of freedom of speech that denies an opportunity for scientific and political debate restricts the core of high value speech
that is entitled to constitutional protection. Given its endless set of interlocking
presumptions, the Martin Act may well be unconstitutional on its face.
Yet Schneiderman does not see the world that way. In his view, The First
Amendment, ladies and gentlemen, does not give you the right to commit
fraud. The Martin Act conveniently gives the New York attorney general
enormous leverage by allowing him to speak out of both sides of his mouth.
In court, he can take advantage of the expansive liability under the Act. But
in public discussions, he can brand the companies he opposes as fraudulent.
The most notable attendee of Schneidermans press conference was Al
Gore, who insisted that Hurricane Sandy in 2012 was in part caused by
climate changeand, specifically, by abnormally high temperatures over
the Atlantic Ocean. But there have been major hurricanes for decades, if not
centuries, so it is unclear if the natural variability in weather could explain
this particular event. In any case, the attempt to infer from long-term climate
trends a causal role for particular weather events is deeply problematic.
Gore also attracted attention by saying, Temperatures are breaking
records almost every year now: 2015 was the hottest year measured since
instruments had been used to measure temperature; 2014 was the secondhottest. Fourteen of the fifteen hottest have been in the last fifteen years.

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H OOVER DI GEST Fa ll 201 6

But note that there are no actual temperature figures in this statement,
probably because temperature increases have plateaued, albeit at a high
level, over the past eighteen years, notwithstanding substantial increases in
carbon dioxide emissions.
Indeed, one troublesome part of this debate is the weak correlation
between temperature increases and the rise in carbon dioxide concentrations. Data presented by climate scientist John Christy show that the standard models have not done well against actual data for the past thirty-seven
years. These climate models have predicted temperature increases threefold
that of those that have been observed, and the greatest errors in the models
were where the increases in carbon dioxide concentrations were the largest.
Models, as Christy warned, are properly defined as scientific hypotheses or
claimsmodel output cannot be considered as providing proof of the links
between climate variations and greenhouse gases. That is especially true
for models whose predictions have been falsified over a forty-year period. It
seems even clearer that these models should never be used as the basis of
criminal prosecutions or civil investigations.
SUPPRESSING DEBATE
Which brings us back to ExxonMobil. Shortly after the twenty attorneys general met in New York to renew their pledges against climate change, Claude
Earl Walker, attorney
general of the United
In principle, it should be possible to
States Virgin Islands,
hired the crack law firm
separate scientific issues from politiof Cohen Milstein to
cal. But overheated politics make
mount a huge civil investhat difficult.
tigation of ExxonMobils
activities in the area of climate change. The suit was especially piquant since
ExxonMobil does no business in the Virgin Islands. The gist of the charges
was that ExxonMobil systematically misled the public over the past forty
years to improve its ability to extract oil and gas around the globe.
A moments reflection reveals how bizarre this fraud suit is. First, it is
unlikely that the company adopted any kind of consistent policy over a
forty-year period. Second, it is difficult to believe that policy makers have
been misled by the companys alleged misrepresentations. For years now,
the opponents of fossil fuels have denounced ExxonMobil and other companies for their perfidyand these firms have been under close scrutiny as a
result. It is odd to think that any corporate scheme could have duped political

H O O V E R D IG E ST Fall 2016 153

leaders who were inundated day after day with information intended to
expose the falsehoods that ExxonMobil is said to have perpetuated.
In this connection, moreover, I am somewhat unhappy that the ExxonMobil defense rests in part on the view that it has cooperated with government
officials in dealing with global warming. That may well be true, but it is also
beside the point for the First Amendment analysis. The company is entitled
to express its own views, even if they are in opposition to the governments.
Nonetheless, to its lasting credit, ExxonMobil has chosen to counterattack.
Normally, the demands for discovery, no matter how onerous, are met with
a variety of defensive motions. But in this instance, ExxonMobil took to
the offense by bringing its own action for declaratory relief in Texas State
District Court, in which it insisted that the entire effort by the Virgin Islands
(and its lawyers) ran afoul of a variety of constitutional guarantees, including
those involving freedom of speech, protection against unreasonable searches
and seizures, and violations of procedural due process.
The common theme behind these defenses is that this sprawling issue is not
amenable to litigation, but only to debate. It is simply impossible to have a fair
debate on any question if one side to the dispute is able to haul its opponents into
court with potential civil or criminal litigation. Ominously, for example, Walker is
also going after think tanks. He served a subpoena to the Competitive Enterprise
Institute, demanding that it turn over a large collection of documents relating to
its climate change work between 1997 and 2007, which was done clearly with the
desire to sniff out potential criminal activity from an organization that has published a number of powerful critiques of government action. If this is not a violation of free speech, then I dont know what is. Climate change may be real, but
the First Amendment should not be pushed aside by the high political theater of
ideologues like Eric Schneiderman and Claude Earl Walker.
Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

New from the Hoover Institution Press is Energy


Efficiency: Building a Clean, Secure Economy, by
James L. Sweeney. To order, call (800) 888-4741 or visit
www.hooverpress.org.

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H OOVER DI GEST Fa ll 201 6

D E MO CRACY A N D F R E E DOM

We Have to Hold
the Line
Hoover fellow Timothy Garton Ash pens a free
speech manifesto for the Internet age.

By Isaac Chotiner

imothy Garton Ash has written an expansive yet precise book


on a concept he believes to be in grave danger. Garton Ash, a
Hoover senior fellow who teaches European studies at Oxford
University, made his name covering Central and Eastern Europe

in the years before the fall of the Soviet Union. His latest work, Free Speech:
Ten Principles for a Connected World (Yale University Press, 2016), is an
attempt to explain why he thinks advocates for free speech have found themselves on the defensive in so many countries, as well as his opposition to hate
speech laws and those that forbid Holocaust denial. (Last year, he called for
the reprinting of Charlie Hebdo cartoons after the attack on the newspapers
office in Paris.)
The fate of free speech is especially fraught in our current political
moment. The rise of Donald Trump mirrors the entrenchment of increasingly authoritarian rulers and politicians in countries around the world, from
Turkey to Russia to India to Poland to Hungary. In all of these countries,
Timothy Garton Ash is a senior fellow at the Hoover Institution and the Professor
of European Studies, director of the European Studies Center, and Gerd Bucerius
Senior Research Fellow in Contemporary History, all at St. Antonys College, Oxford University. His latest book is Free Speech: Ten Principles for a Connected
World (Yale University Press, 2016). Isaac Chotiner writes for Slate.
H O O V E R D IG E ST Fall 2016 155

demagogues have stigmatized ethnic or religious minorities, fueling fear


about the rise of hate speech and violence. Where does that leave our cherished principle of free speech?
I spoke with Garton Ash by phone. We discussed, among other things, safe
spaces on college campuses, violent protests at Trumps rallies, and the
single biggest threat to free speech in the twenty-first century. This interview
has been edited and condensed for clarity.
Isaac Chotiner, Slate: Have your own opinions on free speech changed over
time?
Timothy Garton Ash: Its very boring. Ive always been a small l liberal
and seen the value of free speech. Undoubtedly, in working on this subject,
I have come to see and understand certain new challenges to free speech.
One is what I call the assassins veto. People saying, If you say that, we will
kill you. Arguably thats been happening through history, but the connected
world means that the danger is enormous. Another example would be what
I call the ethics of algorithms. These decisions that are being made deep in
the innards of Facebook or Google which are determining, in really important
ways, what we see and what we dont see. Again, the basic principle isnt new,
but the challenge is new.
Chotiner: Does the rise of authoritarianism in so many different countries,
and the corresponding threat to minorities, make you think differently about
these issues?
Garton Ash: I have a very clear view, which is that mature democracies
should try to go beyond hate speech laws. It was different in some earlier
situations, like Britain in the 1960s, when kids of Pakistani origin were
routinely being beaten up on the way home from school. A law was passed,
which if you look at it looks like a hate speech law, but the justification was
about the probability of violence, which I think is where we should draw the
line, and not the much, much broader category of hate speech. The category
I use a lot in the book is dangerous speech rather than hate speech. Thats
speech that actually significantly increases the probability of violence in a
particular context.
Much of the push for hate speech laws is old-fashioned and simplistic sociology. It sort of looks back to the first decades of immigration into Europe
when you had extremely well-defined, small minorities against whom there
was enormous prejudice. But if you take a city like London, its way beyond
multiculturalism, where theres massive diversity not just in individual

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H OOVER DI GEST Fa ll 201 6

OUTSPOKEN: Hoover senior fellow Timothy Garton Ash, an Oxford professor,


suggests ways for societies to negotiate the intricacies of free speech in the
online age while rejecting both the assassins veto and the hecklers veto.
[Henning KaiserEPA]

families but in individuals. People have multiple identities. It simply doesnt


work to say, Oh, here we can identify a single vulnerable minority. They
must be entitled to special treatment because its a genuinely diverse and
multicultural society. In some cities in England the people who have the
lowest level of educational attainment and often the highest level of unemployment are the poorly educated white working class. I think the framework
breaks down when you look at a genuinely multicultural reality.
Im very much with the First Amendment tradition on this. I dont think
you should try to enforce civility by law. There is very little evidence that
European countries with
hate speech laws have any
Decisions made deep in the innards less phobia or racism. Take
France, for example. You
of Facebook or Google are determinhave monkey chants at
ing, in really important ways, what
French football matches,
we see and what we dont see.
although the country
absolutely has lots of hate speech laws, so I dont think thats a way to do it.
I think you have to do much more of it in civil society. Heres a question: why
isnt there more of a push back in civil society among the electorate, in the
media, against people who are spouting whatever they say about Mexicans or
Muslims or Jews or whoever it may be?
Chotiner: One possible response to the rise of these authoritarians is what
we saw at the Trump rally in San Jose, with calls to stop Trump from speaking and even violence.
Garton Ash: Well, its the hecklers veto, isnt it? And I am totally against
the use of violence. The first response is that people should not shut down
peaceful political rallies in that way. The second is: does someone like Donald
Trump, who has such an extraordinary megaphone, have a responsibility for
the language he uses? He certainly does. Should he stop saying the things he
has been saying about Muslims and other minorities? Absolutely he should.
Does that justify violence to close down his rallies? No, it doesnt.
Chotiner: Can you think of any situation where you think peaceful rallies
should have been shut down by force?
Garton Ash: In absolutely extreme circumstances. Obviously the people who
tried to assassinate Hitler are heroes. But the circumstances are extreme
and truly not to be compared with the circumstances in the United States at
the moment.

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H OOVER DI GEST Fa ll 201 6

Ten Principles of Free Speech


1. Weall human beingsmust be free and able to express ourselves,
and to seek, receive, and impart information and ideas, regardless of
frontiers.
2. We neither make threats of violence nor accept violent intimidation.
3. We allow no taboos against and seize every chance for the spread of
knowledge.
4. We require uncensored, diverse, trustworthy media so we can make wellinformed decisions and participate fully in political life.
5. We express ourselves openly and with robust civility about all kinds of
human difference.
6. We respect the believer but not necessarily the content of the belief.
7. We must be able to protect our privacy and to counter slurs on our reputations, but not prevent scrutiny that is in the public interest.
8. We must be empowered to challenge all limits to freedom of information
justified on such grounds as national security.
9. We defend the Internet and other systems of communication against
illegitimate encroachments by both public and private powers.
10. We decide for ourselves and face the consequences.
Timothy Garton Ash

H O O V E R D IG E ST Fall 2016 159

Chotiner: One critique Im sure youve heard is that you are a privileged
white liberal, and so its easy for you to say free speech, free speech.
Garton Ash: I think there are two points to be made about that. The first is,
obviously, the discussion about free speech is also a discussion about power
relations. But I would argue that for the most part, free speech is a weapon of
the weak, the powerless, the persecuted, against the powerful, which is why
Aryeh Neier famously argued in the Skokie case that he would defend his
enemies, neo-Nazi marchers. He makes this point explicitly because law and
free speech are ultimately not a weapon of tyrants. Now, obviously there are
exceptions to that, and I have quite a bit [in the book] about the problem in
the United States, which is money speaking too loudly.
Chotiner: How do you view the push for things like safe spaces?
Garton Ash: Im talking to you from Oxford. I defended the Rhodes Must Fall
movement here, which I think opened up a conversation about our colonial
history, the curriculum, and so on, so I think thats actually a blow for free
speech. I dont think trigger warnings in principle are so bad. Why not? If there
is someone whos genuinely likely to be traumatized by a particular text or film,
put a warning on it. Its been
taken to absurd and extreme
lengths, but some of this I
I dont think you should try to
think is fine. The no platenforce civility by law.
forming and safe spaces
argument I think is massively problematic, because when you look at it its not
just people saying, We dont want to hear Germaine Greer, which is fine, no
one has to invite her. Its one group of students saying that another group of
students shouldnt be able to hear someone they want to hear. Its student-onstudent censorship, and against that I think we really have to hold the line.
Chotiner: You called for the Charlie Hebdo cartoons to be reprinted. Why is
that a question of free speech?
Garton Ash: Theres been a lot of yielding to violent intimidation since the
fatwa against Salman Rushdie. Theres a lot of self-censorship out of fear. So,
come to Charlie Hebdo: I make that proposal. I then have incredibly interesting conversations, notably with American editors who say were not going
to reprint this for two reasons: one, because these are grotesquely offensive,
and thats punching down. That was a key phrase, punching down, against
the weak, and secondly because wed risk the life and limb of our employees.

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H OOVER DI GEST Fa ll 201 6

My point is that youre confusing two completely different considerations


there. Consideration number one is a consideration of taste. I would not have
reprinted the Charlie Hebdo cartoons in the Guardian, or wherever, before
the murders. I see absolutely no reason to do that at all, and I agree with this
point about punching
down and some of them
For the most part, free speech is a
were grossly offensive.
Once people have been
weapon of the weak, the powerless, the
murdered in cold blood,
persecuted, against the powerful.
simply for the act of
drawing and publishing these cartoons, the meaning of re-publication changes completely and the meaning of re-publication is not in any way, shape, or
form to endorse the artistic or political content of the cartoons. It is simply to
say the assassins veto will not prevail. They shall not pass. And I think that
part of it is really important to hold onto.
Chotiner: I think that almost none of the places that did reprint the cartoons
would have done so if the cartoons had been about black people or Jews.
So perhaps those of us claiming that we speak for free speech have double
standards, which may in turn make us wonder about our attachment to the
principle.
Garton Ash: This is fascinating territory because one of my conclusions
from the book is, tell me your double standards and I will tell you who you
are. Everyone in the debate about free speech has to interrogate ones self,
so a great example I give in the book is the Anti-Defamation League, which
wanted social media platforms, Internet platforms, to remove Holocaust
denial, even though its not
illegal in the United States,
but said that the Innocence of
The facts set nobody free. People
Muslims video should be left
set people free, and the same is true
up. Thats a double standard,
of the Internet.
because Innocence of Muslims
was grossly and deliberately meant to be offensive to Muslims and actually
if you look at YouTubes community standards, you could argue that they
should have taken it down earlier and that once the violence happened then
you would seem to be retreating in the space of violence. By the way, Charlie
Hebdo cartoons were also very offensive to Jews, if you remember.
These are very difficult decisions, and I completely respect the second
part of the argument, which says that if Im an editor or publisher, Ive got a

H O O V E R D IG E ST Fall 2016 161

thousand employees to think about. So what I actually propose as a compromise in the book, which I call the one click away principle, is that everyone
should publish them online. With one click away, no one needs to be confronted with it at the news agent if they dont want to. I actually think thats a
pretty interesting compromise.
Chotiner: Does this new Internet era make you at all hopeful about free
speech?
Garton Ash: Well, its the fallacy of technological determinism. I remember
reading an article in 1990 called The Facts Will Set You Free. The facts
set nobody free. People set people free, and the same is true of the Internet.
It clearly gives massive new possibilities for communication and freedom
of expression, but it also allows for massive new possibilities, as Edward
Snowden amongst others showed us, of surveillance and control.
Chotiner: Do you have more fear about freedom of speech being curtailed by
governments or big Internet companies?
Garton Ash: Amongst others. I think that, having lived through a period of
liberal triumphalism, where one could plausibly see free speech spreading
in the 1990s, early 2000s, we are now on the defensive. Its no longer just a
state. Its not just states and censorship. Its also private superpowers, the big
giants, be they American or Chinese, and most dangerous of all is what I call
power squared, when the governments and the Internet giants collaborate
without any transparency or accountability. So if I had to point to the biggest single threat to free speech, I think it would be the covert collaboration
between the public and the private superpowers.
Reprinted by permission of Slate (www.slate.com). 2016 The Slate
Group LLC. All rights reserved.

New from the Hoover Institution Press is Zhivagos


Secret Journey: From Typescript to Book, by Paolo
Mancosu. To order, call (800) 888-4741 or visit www.
hooverpress.org.

162

H OOVER DI GEST Fa ll 201 6

I M M I G RAT I ON

Writing on the
Walls
The truth is as old as Hadrians Wall: cultures that
dont unite wont get along.

By Victor Davis Hanson

hen you stand at Hadrians Wall in northern England,


everything appears indistinguishably affluent and serene
on both sides.
It was not nearly as calm some 1,900 years ago. In AD

122, the exasperated Roman emperor Hadrian ordered the construction of


an eighty-mile, twenty-foot-high wall to protect Roman civilization in Britain
from the Scottish tribes to the north.
We moderns often laugh at walls and fortified boundaries, dismissing them
as hopelessly retrograde, ineffective, or unnecessary. Yet they still seem to
fulfill their mission on the Israeli border, the 38th parallel in Korea, and the
Saudi-Iraqi boundary: separating disparate states.
On the Roman side of Hadrians Wall there were codes of law, habeas cor-

pus, aqueducts, and the literature of Cicero, Virgil, and Tacitusand on the
opposite side a violent, less sophisticated tribalism.
Hadrian assumed that there was a paradox about walls innate to the
human condition. Scottish tribes hated Roman colonial interlopers and
wanted them off the island of Britain. But for some reason the Scots
Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow at the
Hoover Institution and the chair of Hoovers Working Group on the Role of Military History in Contemporary Conflict.
H O O V E R D IG E ST Fall 2016 163

did not welcome the wall that also stopped the Romans from entering
Scotland.
The exasperated Romans had built the barrier to stop the Scots from
entering Roman Britain, whether to raid, trade, emigrate, or fight.
Today, the European Union has few problems with members that do not
enforce their interior borders. But European nations are desperate to keep
the continent from being overwhelmed by migrants from North Africa and
the Middle East. Like the Romans, some individual EU nations are building
fences and walls to keep out thousands of non-European migrants, both for
economic and national security reasons.

[Taylor Jonesfor the Hoover Digest]

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H OOVER DI GEST Fa ll 201 6

Many Middle Easterners want to relocate Walls still seem to fulfill their mission
to Europe for its mateon the Israeli border, the 38th parallel
rial and civilizational
in Korea, and the Saudi-Iraqi boundary.
advantages over their
homes in Algeria, Iraq, Libya, Morocco, or Syria. Yet many new arrivals are
highly critical of Western popular culture, permissiveness, and religionto the
extent of not wanting to assimilate into the very culture into which they rushed.
Apparently, like their ancient counterparts, modern migrants on the
poorer or less stable side of a border are ambiguous about what they want.

H O O V E R D IG E ST Fall 2016 165

They seek out the security and bounty of mostly Western systemswhether European or Americanbut not necessarily to surrender their own
cultural identities and values.
In the case of Hadrian, by AD 122 he apparently felt that Romes resources were taxed and finite. The empire could neither expand nor allow tribes
to enter Roman territory. So his solution was to wall off Britain from Scotland and thereby keep out tribes that sometimes wanted in but did not wish
to become full-fledged Romans.
The same paradoxes characterize recent, sometimes-violent demonstrations at Donald Trump rallies, the controversy over the potential construction of a fence on the Mexican border twenty-five times longer than Hadrians Wall, and the general furor over immigration policies.

[Taylor Jonesfor the Hoover Digest]

166

H OOVER DI GEST Fa ll 201 6

Mexico is often
critical of the United
Rome worked when foreigners crossed
States and yet
through its borders to become Romans.
encourages millions
of its own people to emigrate to a supposedly unattractive America. Some
protesters in turn wave the flag of the country that they do not wish to
return to more often than the flag of the country they are terrified of
being deported from. Signs at rallies trash the United States but praise
Mexicoin much the same manner that Scots did not like Roman Britain
but were even less pleased with the idea of a fortified border walling them
off from the Romans.
What are the answers to these human contradictions?

H O O V E R D IG E ST Fall 2016 167

Rome worked when foreigners crossed through its borders to become


Romans. It failed when newcomers fled into the empire and adhered to their
own cultures, which were at odds with the Roman ones they had ostensibly
chosen.
There were no walls between provinces of the Roman empirejust as
there are no walls between the individual states of Americabecause common language, values, and laws made them all similar. But fortifications
gradually arose all over the outer ring of the Roman world once Rome could
no longer afford to homogenize societies antithetical to its own.
If Mexico and other Latin American countries were to adopt many of the
protocols of the United States, their standard of living would be as indistinguishable from Americas as modern Scotland is from todays England.

168

H OOVER DI GEST Fa ll 201 6

Or if immigrants from Latin America were to integrate and assimilate as


rapidly as possible, there would be less of a need to contemplate walls.
Historically, as Hadrian knew, walls are needed only when neighboring
societies are oppositesand when large numbers of migrants cross borders
without necessarily wishing to become part of what they are fleeing to.
These are harsh and ancient lessons about human nature, but they are
largely true and timeless.
Reprinted by permission of National Review. 2016 National Review, Inc.
All rights reserved.

Available from the Hoover Institution Press is American


Contempt for Liberty, by Walter E. Williams. To order,
call (800) 888-4741 or visit www.hooverpress.org.

[Taylor Jonesfor the Hoover Digest]

H O O V E R D IG E ST Fall 2016 169

I N TERVI EW

John Hennessy:
The Exit
Interview
The outgoing Stanford president reflects on the
founding, and the future, of a truly great university.

By Peter Robinson

Peter Robinson, Uncommon Knowledge: When John Hennessy became


president of Stanford University sixteen years ago, Stanford was a top
regional school in the middle ranks of very good schools of national standing,
and now as he steps down as president of Stanford University the institution
has become undoubtedly one of the half dozen most important educational
institutions on the face of the planet. Today we get to ask John Hennessy how
he did it.
In 2000 he was named the tenth president of Stanford University, a position from which he stepped down August 31. During President Hennessys
sixteen years in office, Stanford has seen its endowment grow from $6.2
billion to $21.5 billion, second only to the endowments of Harvard and Yale
for now, and has seen applications for undergraduate admissions climb from
eighteen thousand to forty-four thousandbecoming the most selective university in the country. President John Hennessy, welcome.
Peter Robinson is the editor of the Hoover Digest, the host of Uncommon
Knowledge, and a research fellow at the Hoover Institution. John Hennessy is
the outgoing president of Stanford University.
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H OOVER DI GEST Fa ll 201 6

John Hennessy: Thank you, Peter. Delighted to be here.


Robinson: What makes Stanford, Stanford? Let me quote, John, if I may,
a cover letter that you sent to the city of New York when New York was
accepting bids for institutions to build campuses on Roosevelt Island in the
East River. Just a very brief quotation. Stanford NYC, which is what the
project was called, has the potential to help catapult New York City into
a leadership position in technology. Heres what I find striking about that
one sentence. New York City is almost three centuries old. It already boasts
some spectacular educational institutions. Youve got Columbia, youve got
NYU. Since before the founding of the republic, its been the financial center
for the nation. Why was technology leadership here instead of there in the
first place?
Hennessy: Its an interesting question. There are obviously lots of pieces that
came together in the right place. I think it goes back to the early heritage of
California. It was a pioneering community. It was people who trekked across
the United States.
Robinson: You came here in 1977. Did you still feel that coming here from
back East?
Hennessy: Oh, absolutely. In 77, the valley was still in its nascent state. Intel
was a moderately sized company, not a gigantic company. The computer
industry was still back East. As a computer scientist, if I wanted to talk to
leaders in the computer industry, I got on a plane and I flew to New York
to go to IBM, or I flew
to Boston. It was still
centered back there, but
there was a vibrancy
here; the integratedcircuit technology clearly
was the future. There
was an entrepreneurial
risk-taking acceptance.
I think, equally importantly, there was a symbiotic view of the relationship
between industry and the academy. They werent seen as enemies of one
another. They were seen as people working on technology that had different
points in the spectrum, industry much closer to product development, university much closer to thinking about the future and thinking about future
research, but they were not seen as enemies of one another. That made it

H O O V E R D IG E ST Fall 2016 171

much easier to get collaborative working relationships and to develop what


became Silicon Valley over time.
Robinson: Heres a kind of thought experiment to get at the interplay
between Stanford University and its immediate surroundings here in Northern California. The thought experiment runs as follows: pick up all eight
thousand acres and put them down in Texas. Heres why I say Texas, because
youd gain things that are pretty obvious. Your faculty would be able to afford
housing. Your tax and regulatory overlay would drop sharply. There are gains
there. What would be lost?
Hennessy: One of the great things about this area is that people really love
living here. Its the weather. Its the feel. This is a region that can welcome
people from anywhere in the
world. They can find other
There was a symbiotic view of the
people who come from that
part of the world. They can
relationship between industry and
find whatever kind of food
the academy. They werent seen as
they like to eat, whatever
enemies of one another.
kind of community they like
to go with. In that sense, its become the number one talent magnet in the
world. It draws more talent related to this than any other area.
Robinson: Youve been able to stay on top of housing prices? You havent
found it harder and harder to attract faculty because of housing prices?
Hennessy: Obviously facultys been a challenge. We import faculty from
around the world. The amount we spend on that now is probably getting
close to $100 million a year that we have to put in to help subsidize and make
loans and create faculty housing.
Robinson: Just to even up the playing field with regard to housing, one item.
Hennessy: Its more efficient than just adding salary.
Robinson: I see.
Hennessy: Long term, we do have to worry about staff and what were going
to do about the staff that work for the university. The valley has to worry
about that as well. How is it going to continue to house people? Its becoming
more urbanized, but its doing it in fits and starts as it tries to hold on to this
former suburban notion in an area that rapidly is becoming a very semiurban area.

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H OOVER DI GEST Fa ll 201 6

Robinson: You mentioned another theme Id like to push for a moment.


Im going to quote from an article by Ken Auletta in the New Yorker [Get
Rich U., April 30, 2012]. He wrote a long piece on Stanford. Some stuff still
resonates as you
prepare to step down.
The university can combine the study
Quoting Auletta, If
of more idealistic, long-term, fundathe Ivy League was
the breeding ground
mental, human questions, the humanifor the elites of the
ties and the social sciences, with the
American Century more pragmatic disciplines.
you go to the Ivy
League, and you get a feeling that youre expected to run the country, thats
what youre there forStanford is the farm system for Silicon Valley. He
goes on: Stanfords office of technology licensing has licensed eight thousand campus-inspired inventions....Faculty members commonly invest in
start-ups....At Stanford more than elsewhere, the university and business
forge a borderless community. Thats just what you were talking about earlier. You, while president, have sat on the boards of Cisco and Google. I ought
to give you a moment or two to explain why theres no conflict of interest.
Hennessy: Well, I think conflict of interest is certainly an issue. The way
you address it is both through disclosure and in the cases where recusal is
appropriate. There are not that many things that occur between, lets say,
Google and Cisco and Stanford. Im recused from all of those. It begins with
transparency. I think Im a full believer in transparency. Everybody needs to
understand that.
Robinson: Auletta picked up on this point when he visited the campus:
the university does not look down on trade, so to speakthe commercial
development of ideas
generated here. To
what extent can
Institutions can evolve, but academic
that be replicated
institutions evolve very slowly.
elsewhere? To what
extent is Stanford creating a model that can be put to use elsewhere, and to
what extent is this just a miraculous one-off?
Hennessy: Its an interesting question, Peter. This notion that the university
can combine the study of more idealistic, long-term, fundamental, human
questions, the humanities and the social sciences, with the more pragmatic

H O O V E R D IG E ST Fall 2016 173

disciplines. That it can do both astronomy, trying to understand how the


universe evolved, and also invent the next generation of computer technology. Actually, the Stanfords had that in their mind from day one. It was part
of what formed the university. Universities are created, and that history gets
baked into the institution.
Robinson: Founding moments matter.
Hennessy: Founding moments matter.
Robinson: Stanford was developed in California by a railroad man. In the
founding document, they wanted the education to be practical, as opposed
to the Ivies. I believe that every single one of the Ivies was founded as a
religious institution, eyes on the next world, matters of philosophy and
men only. Stanford was coeducational from the get-go. You cant work
backwards.
Hennessy: Its hard to do. I think institutions can evolve, but academic institutions evolve very slowly.
Robinson: John, if you dont mind, a couple of critiques. There are somewhere between four thousand and five thousand colleges and universities in
the country. Only about seventy, as I was able to count, have endowments of a
billion or more. Endowments such as Stanfords, which are in the double digits, are a tiny number, fewer than a dozen. Heres a quotation from Malcolm
Gladwell, the writer, If Stanford cut its endowment in half and gave it to
other worthy institutions, then the world really would be a better place. You
would also be in trouble with your board...
Hennessy: Yeah.
Robinson: This whole notion that higher education is in some way becoming
a winner-take-all game, that the top institutions are favored in a way that the
other institutions cant hope to match, and that its increasing. What do you
do with that?
Hennessy: Theres certainly a challenge that we face in higher education,
particularly along the divide between the publics and the privates, but not
only that. Its broader than that. It also affects the privates that are less well
endowed. The publics are suffering from probably two decades now of underinvestment, of budget cutting, driven by real financial issues that the states
have, including the rise in health care costs theyre burdened with. That is
leading to an erosion of the ability of the publics to compete.

174

H OOVER DI GEST Fa ll 201 6

WELL DONE: Outgoing Stanford president John Hennessy celebrates with


Stanford graduates during commencement ceremonies last June. [Linda A.
CiceroStanford News Service]

I think that if we cut our endowment in half, there are a lot of things we
would stop doing tomorrow, including our financial aid program, including
being able to hire faculty in a variety of areas.
Whats key is that for the next potential donor we talk to, whom we ask to
give money to the university, we have to be able to justify how were going to
ensure that their investment gets the kind of social return theyre looking for.
Philanthropists are looking for a social return. But thats the way philanthropists who come to Stanford and this valley think. They think of themselves as
investors. They invest in the university to get a social-philanthropic return.
We have to convince them that were going to be good stewards with their
money, and that theyre going to get a good social return on that money.
Robinson: To what extent does the university face the venture-fund problem, which is that, as your fund gets bigger, its harder and harder to show

H O O V E R D IG E ST Fall 2016 175

a return on investment? Does it get harder at the margins as the university


grows?
Hennessy: It gets harder if you dont do anything new. If your argument is
give me more money to do what I do todayI dont find it compelling if
somebody comes to me and says that, and I dont think a donor would find it
compelling. Take the new scholarship program were starting.
Robinson: The Knight-Hennessy program.
Hennessy: Heres an opportunity to take one hundred truly extraordinary
people from around the world every year, bring them here, give them all their
education, graduate with zero debt, to build some leadership-development
program and to really make an important contribution. Bring people to an
institution whose culture and approach is fairly unique and fairly different,
as it is on the West Coast. I think that makes a compelling vision for people
to see how twenty years from now, when you look back at the list of people
whove come through this program, you can say look what theyre doing in
the world.
Robinson: At Stanford University fifty years ago, here are the three most
popular majors: history, political science, biology. The three most popular
majors today: biology, computer science, and engineering. Youve got this
shift from humanities
over to the harder sciWhen you look out twenty years, it
ences, computer sciences, and so forth. Now
turns out our philosophy majors are
heres a quotation from
among the most highly compensated.
your friend and an eminent member of the faculty, David Kennedy, Pulitzer Prizewinning historian.
The entire Bay Area is enamored with these notions of innovation, entrepreneurship, mega success. Its an atmosphere that can be toxic to the mission
of the university as a place of refuge, contemplation, and investigation for its
own sake. Stanford does a great job teaching kids how to make money. Does
it do a good job of teaching them how to lead good lives?
Hennessy: I hope so.
Robinson: Youve heard this again and again and again. How do you answer it?
Hennessy: Well, first of all we start with the notion that we are a liberal arts
institution. We are not a technical training institution. Were not a technical

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university. Were a liberal arts institution. We start with the simple basis that
every single person in the university has a set of liberal arts requirements,
whether theyre an engineering major, a history major, or a biology major.
Thats the beginning of a broad education because we do believe that that
broad education is critical to the long-term future. Around the country, not
just at Stanford, humanities majors have dropped. This generation of students is much more focused on career. Add that to the economic uncertainty
thats arisen in the past decade or so. Theyre much more risk averse.
Robinson: Even at Stanford.
Hennessy: Theyre not risk averse in the sense that they know if they get
a tech major and they go into a start-up and the start-up fails, therell be
another job opportunity out there.
Robinson: Exactly. Young man, young woman, you will be employable.
Hennessy: They will be, and this is true for all of our majors. One of the
stories I like to tell is when you look out twenty years, it turns out our
philosophy majors are
among the most highly
Philanthropists who come to Stancompensated. Of course,
theyre not professional
ford and this valley think of themphilosophizers for the
selves as investors.
most part. They went to
medical school, they went to business school, they went to law school. They
got additional education. Thats the thing that weve got to keep up front in
the students mind.
I mean, its an exciting time in technology. Technology is probably changing the world in a way that nothing else really has in recent times, that
nothing can touch. That attracts young people. But I think we need to think
broadly about how we educate them and what we prepare them for and get
them to think not just the short-term things that are ephemeral, as so many
things in technology are, but the long-term things. What are your values?
What do you know about history? What do you know about being a good
citizen? Those are critical issues for young people.
Robinson: Last few questions, John. This is you in 2012, Theres a tsunami
coming. We know online education is going to be important and in the long
term transformational to education. We dont really understand how yet.
This institution has been right at the middle of one disruption after another.

H O O V E R D IG E ST Fall 2016 177

The Google algorithms are discovered here and they go out and wipe out
the old business model for journalism, for example. All kinds of pieces of the
so-called driverless technology were and are being developed here, and we
know thats going to overturn the entire automotive industry in this country.
To what extent, as you prepare to step down, do you say to yourself, Stanford
itself could be next? How do you grapple with that?
Hennessy: I think there are changes coming. As I said in that quote, we dont
exactly know how. I think whats become clear is that the world of continuing
education, whether related
to people who want to get
What are your values? What do you
education just for their own
know about history? What do you
good and for broadening
their interests, or a much
know about being a good citizen?
larger community, the professionals out there who want to continue to evolve and enhance their skills,
theyre moving quickly to the online world. The notion of coming back to a
physical place, stopping your job, it just doesnt work anymore. We see that
change.
I think undergraduate education is much harder to change, particularly at
a place that has a residential model of undergraduate education. The learning that goes on is 24/7 and it happens as much in the residences as it happens in the classroom.
Robinson: You produce not just individuals but a kind of community through
time.
Hennessy: Yes, you do. That, I think, has been much more resistant to change.
I think other parts of the model are beginning to change. For example, how do
we think about remedial education for the vast majority of people who graduate from high school, even the vast majority who go to college, who are not fully
prepared to be in college? How do we bring them up to speed? Well, thats a
terrific use of online technology. Instead of having them spend their summer in
their senior year between high school and college doing nothing, you can actually prepare them for college. I think were going to see increasingly different
experiments.
What we have discovered, I think, is that how people learn is extremely
complicated, highly varied, both in terms of the rate at which they can
accept information and the way they like to get that information, whether its
through a video, through reading, through a live classroom. So in order to

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launch a new technology, we need to do a lot more experimentation with that


technology to see what works.
We do have one thing that really worksthis notion that you dont attend
a large lecture. You watch a video and then engage in a smaller interactive
discussion, a problem-solving discussion of the material. That is a model that
we know works at least as well as a conventional classroom. In fact, evidence
is out there that it works somewhat better, if you include the amount of time
the students need to spend to master the material.
Robinson: Youre famous for visiting a few freshman dorms every fall to
greet the new class, take their questions, and offer a few words of advice
on how they ought to spend their four years at this place. For the first time
in sixteen years freshmen will arrive and John Hennessy wont be there to
greet them in their dorms, at least not as president. As a kind of summary
statement, John, what would you like to say to the new arrivals? What advice
would you give to the Stanford University class of 2020 about how they
should use their four years here?
Hennessy: What I always tell them, Peter, is that this time is going to go
faster than they could possibly imagine. They should really try to take advantage of it, jump in. Think about whether you want to go abroad and where
you want to go. Think about developing relationships with faculty members,
because those relationships not only help you develop as a person but give
you a lifelong connection to somebody at the university. I usually conclude
by telling them that Stanford is a very special place. Generations of students
are linked across many, many years, and theyll become part of that larger
community. Its not just the current students on campus but the hundreds
of thousands of alumni around the world. Theyre going to be part of the
Stanford family for the rest of their lives, but this is a time when theyll really
embed themselves and take advantage of being here as their only job, their
only assignment. They should take that on with vigor and energy because it
is a unique opportunity theyve been given.

H O O V E R D IG E ST Fall 2016 179

I N TERVI EW

We Ought to Be
Humble
Economist and Hoover fellow Russell Roberts tries
mightily to make the dismal science less dismal
and offers a warning about the science part.

By Kyle Peterson

he models were run and the numbers crunched: Bernie Sanderss presidential platform, if enacted, would have created
twenty-six million jobs and 5.3 percent growth. An economist
did the calculating, and theres no use arguing with mathemat-

ics. CNNs headline read: Under Sanders, income and jobs would soar,
economist says.
When I run that line by Russ Roberts, he replies with a joke: How do you
know macroeconomists have a sense of humor? They use decimal points.
Roberts is a fellow at the Hoover Institution, a University of Chicago PhD,
and the gregarious host of EconTalk, a weekly podcast that celebrated its
tenth anniversary in March. He is also an evangelist for humility in economics. The worlds a complicated place, he says. We demand things from
economics that it cant provide, and we should be honest about that.
Whats striking is that Roberts isnt talking only about politically contrived agitprop. Nobody believes that stuff: one of President Obamas former
economic advisers stirred ire from Sandernistas earlier this year when he
Russell Roberts is the John and Jean De Nault Research Fellow at the Hoover Institution. Kyle Peterson is associate editorial features editor for the Wall Street
Journal.
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said that getting Bernies agenda to add up requires assuming magic flying
puppies with winning Lotto tickets tied to their collars.
The deeper question is: how much bettermore credible, or reliable, or
falsifiableare the economic forecasts pouring out of respectable think
tanks, the White House, and Congress? Robertss answer: not all that much.
He cites the Congressional Budget Office reports calculating the effect
of the stimulus packagefor instance, one in late 2009 suggesting it had
increased employment by between 600,000 and 1.6 million. Leaving aside the
incredible range of the estimate, how did the CBO come up with those numbers? Did it somehow measure employment in the real world?
Nope: the CBO gnomes simply went back to their earlier stimulus prediction and plugged the latest figures into the model. They had of course forecast the number of jobs that the stimulus would create based on the amount
of spending, Roberts says. They just redid the estimate. They just redid the
forecast. And youre thinking, that cant be what they really did.
Economics fancies itself a science, and Roberts used to believe, as many
of his peers do, that practitioners could draw dispassionate conclusions. But
he has in recent years undergone something of a crisis of economic faith.
The problem is, you cant look at the data objectively most of the time, he
says. You have prior beliefs that are methodological or ideological about the
impact of things, and that inevitably color the assumptions you make.
A recent survey of 131 economists by Anthony Randazzo and Jonathan
Haidt found that their answers to moral questions predicted their answers
to empirical ones.
An economist who
How do you know macroeconomists
defines fairness as
equality of outcome
have a sense of humor? They use decimight be more likely
mal points.
to say that austerity
hurts growth, or that single-payer health care would bend the cost curve.
The papers authors quote Milton Friedmans brief for value-free economics and reply that such a thing is no more likely to exist than is the frictionless world of high school physics problems.
This seems obvious to an outsider, given the fields tendency to devolve
into stalemate. Each side has highly intelligent scholars, some with fancy
Swedish gold medals, and yet each finds the others conclusions self-evidently
stupid. The old saw in science is that progress comes one funeral at a time,
as disciples of old theories die off. Economics doesnt work that way. Theres
still Keynesians. Theres still monetarists. Theres still Austrians. Still arguing

H O O V E R D IG E ST Fall 2016 181

about it. And the worst part to me is that everybody looks at the other side
and goes What a moron! Roberts says. Thats not how you debate science.
If economists cant even agree about the past, why are they so eager to
predict the future? All the incentives push us toward overconfidence and to
ignore humilityto ignore the buts and the what-ifs and the caveats, Roberts
says. You want to be on the front page of the Wall Street Journal? Of course
you do. So you make a bold claim. Being a skeptic gets you on page A9.
There does, however, seem to be increased chatter lately about whether
economists are simply partisans with better charts. One reason might be
that credibility problems in the other social sciences are metastasizing. A
yearslong attempt to duplicate one hundred psychology findings reported
that only 36 percent could be reproduced. Extending the idea to eighteen lab
experiments in economics, one examination could replicate only 61 percent.
How is it that economists, working in good faith, wind up with dubious
results? To start, they can overanalyze the data. Modern computers spit
out statistical regressions so fast that researchers can fit some conclusion
around whatever figures they happen to have. When you run lots of regressions instead of just doing one, the assumptions of classical statistics dont
hold anymore, Roberts says. If theres a 1 in 20 chance youll find something
by pure randomness, and you run 20 regressions, you can find oneand
youll convince yourself that thats the one thats true.
As if to prove the point, an economist two decades ago wrote an article
charmingly titled I Just Ran Two Million Regressions, which found economic growth to be strongly correlated with Confucianism. Yet many studies
arent so methodologically transparent. You dont know how many times
I did statistical analysis
desperately trying to find
A recent survey of 131 economists
an effect, Roberts says.
found that their answers to moral
Because if I didnt find an
questions predicted their answers to effect I tossed the paper in
the garbage.
empirical ones.
Economists also look
for natural experimentsinstances when some variable is changed by an
external event. A famous example is the 1990 study concluding that the influx
of Cubans from the Mariel boatlift didnt hurt prospects for Miamis native
workers. Yet researchers still must make subjective choices, such as which
cities to use as a control group.
Harvards George Borjas re-examined the Mariel data last year and
insisted that the original findings were wrong. Then Giovanni Peri and Vasil

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H OOVER DI GEST Fa ll 201 6

Yasenov of the University of California, Davis, retorted that Borjass rebuttal was flawed. The war of attrition continues. To Roberts, this indicates
something deeper than
detached analysis at
Economists ought to be modest
work. Theres no way
George Borjas or Peri are about what they knowand forthgoing to do a study and
right about what they dont.
find the opposite of what
they found over the last ten years, he says. Its just not going to happen.
Doesnt happen. Thats not a knock on them.
Pondering the limits of economics has a storied history. John Maynard
Keynes in 1939 referred skeptically to statistical alchemy. A 1983 paper,
Lets Take the Con Out of Econometrics, assailed analysts whimsical
assumptions. Milton Friedman wrote in 1991 that the computer revolution
had induced economists to carry reliance on mathematics and econometrics
beyond the point of vanishing returns.
Roberts cites Friedrich Hayeks 1974 Nobel lecture. He basically says macroeconomics is scientism, Roberts says. He gives the analogy to a sporting
event. He said if we knew everything there was to know, if we had all the
data, we could figure out whos going to win a sporting eventincluding how
well each player slept the night before, their nutrition, their worries, their
anxieties, their mental state, etc. And he said we cant know those things.
But why not? More data! the crowd cries. To a hard materialist, the
world is physics all the way down. If free will is an illusion, if knowable laws
govern every unfolding event, then why cant social scientists march toward
a perfect understanding?
Roberts is decidedly not in the materialist camp. He has described himself
as a believer, a religious Jew, and he has a penchant for literature. One of his
books is an economic romance about a young high school teacher who woos
a colleague over talk of the invisible hand. In another of his novels, a heavenly magistrate sends a nineteenth-century economist back to America to
discredit protectionism. Sterile, soulless Ayn Rand this is not.
Is religious faith a presupposition before all others, one that disposes
Roberts to see economic actors humanity, where others perhaps see only
bundles of particles bouncing in predictable, if complicated, patterns?
This is about the only moment in two hours of conversation where he pauses. Hayek, who was an atheist, not a religious person, he was really warning
against the worship of reason, and of rationality, Roberts eventually says.
So you dont have to be a religious person to be worried about this. After a

H O O V E R D IG E ST Fall 2016 183

bit more conversation, he adds: But I think as a religious person, theres an


extra appeal to that. Because we think there is something else, higher than
human reason, that we ought to be humble toward.
None of this is to suggest that math is irrelevant. Im not saying facts dont
matter. Im not saying evidence doesnt matter, Roberts maintains. Im not
saying economics is a waste of time. Its a wonderful way to help you organize
your thinking about how the world works.
But he is saying that economists ought to be humble about what they
knowand forthright about what they dont. Nobody would expect a biologist to answer such questions with specificity. Im going to introduce a whole
bunch of new species of trees into a forest: whats going to happen to the
squirrel population? Roberts says. Who the hell knows? I dont even know
what the squirrel population is now.
Yet humility isnt always well received. Several years ago, Roberts was
pressed by a reporter to put a number on how many jobs the North American Free Trade Agreement had created. When Roberts replied that he had
no idea, the reporter accused him of ducking the question. He saidhe literally said thisBut youre a professional economist, Roberts recounts. He
meant, Isnt that what you do? Isnt that your job? And of course my answer
is no. Were not good at that.
So what use is economics to politics? When the White House calls to ask
how many jobs its agenda will create, what should the humble economist say?
One answer, Roberts suggests, is to say, Well we cant answer those questions. But here are some things we think could happen, and heres our best
guess of what the likelihood is. That wouldnt lend itself to partisan pointscoring. The advantage is it might be honest.
Reprinted by permission of the Wall Street Journal. 2016 Dow Jones &
Co. All rights reserved.

Available from the Hoover Institution Press is


Inequality and Economic Policy: Essays in Memory of
Gary Becker, edited by Tom Church, Chris Miller, and
John B. Taylor. To order, call (800) 888-4741 or visit
www.hooverpress.org.

184

H OOVER DI GEST Fa ll 201 6

VA LUE S

In the Spirit of
Friendship
Benjamin Franklin knew social ties would create
the ideas to energize his brave, new society. The
Hoover Institution is helping to rekindle Bens
bright idea.

By William Damon

ur longstanding American reputation for friendliness has taken


a hit recently, and not just because of the pugnacious politics
that dominate the national news. In our daily transactions with
fellow citizens, we have become a less sociable people.

For example, according to data from the authoritative Midlife in the

United States (MIDUS) survey, Americans no longer communicate to any


meaningful extent with the folks next door. Only one-third of Americans
speak with neighbors once a week or more; the remaining two-thirds, rarely
or never. The largest decline has come among the youngest adults surveyed:
from 1995 and 2012, the percentage of twenty-five- to thirty-four-year-olds
who speak with neighbors weekly shrank from 40 percent to 28 percent, a
trend that does not bode well for the future.
These figures are consistent with other research showing that social networks in the United States have withered. They have shrunk so much since
the late 1980s that by the early years of the twenty-first century, the number
William Damon is a senior fellow at the Hoover Institution. He is a professor of education at Stanford University and the director of Stanfords Center on Adolescence.
H O O V E R D IG E ST Fall 2016 185

of people who say there is no one with whom they discuss important matters
has nearly tripled. It also has been widely noted that the trust that people
place in each other and in their social institutions has declined, with deleterious societal effects.
Some may say: not to worry, digital networks like Facebook and LinkedIn
allow people to connect with each other in new ways, and are fine substitutes for the face-to-face interactions that we enjoyed in our pre-twenty-first
century social lives. And its true that social media provide unique personal
and social benefits when used with aplomb. But our human need for real-life,
in-person communications has not gone away.
As MIT media scientist Sherry Turkle has shown in a large multiyear
study described in her book Alone Together, social media use that substitutes
for face-to-face interactions often leads to a new solitude, with consequent
impoverishment of peoples emotional lives.
ANOTHER OF BENS BRIGHT IDEAS
There are both individual and societal reasons to rebuild our friendship
networks among our fellow citizens. For one thing, regular in-person conversations with attentive others can allay feelings of social isolation, a serious
problem for those who may have lost contact with friends and relatives.
According to research cited by the Stanford Center on Longevity, socially
isolated individuals face health risks comparable to those of smokers.
For another thing, broader civic aspirations, ranging from local community
improvement to the rebuilding of solidarity and trust nationwide, require
sustained interchanges
among people who work
together towards a purpose.
The number of people who say they
Its true that social media
have no one with whom to discuss
important matters has nearly tripled. campaigns have sometimes
been successful at achieving
valuable civic purposes such as raising funds for worthwhile philanthropic
causes. But the vast majority of such efforts go no further than occasional
social media posts from people who rarely see each other. It is hard to imagine a stable society without core citizen groups who actually meet and get to
know one another well enough to develop mutual respect and confidence.
Does the decline in neighborly conversations reflect a more general loss in
opportunities for fellow citizens to engage with one another in conversations
about common concerns? Such a loss suggests serious damage to hopes for
personal and societal advancement. When citizens become accustomed to

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keeping only their own counsel rather than sharing ideas with others who
might have something to addlike a bit of advice, an informative story, or a
contrary opinionthey become confined to their own limited experience and
cannot benefit from the wisdom of others.
The eighteenth century in America saw the rise of an ambitious young man
who, at the start of his career, invented a congenial way to exchange wisdom
and support with fellow
citizens as they made
Its hard to imagine a stable society
their way in a changing
without core citizen groups who
society. The young man
was Benjamin Franklin,
actually meet.
later destined to become
the inventor of much else, including new technological devices, creative
scientific insights, and the foundations of an improbable democratic republic.
At age twenty-one, young Ben devised a way to foster his early ambitions: a
mutual improvement society that he called the Junto (pronounced junetoe), derived from the Latin for to join.
Franklins group of twelve Philadelphians met on Friday nights at a tavern
they called the merchants every-night club, where they discussed business, morality, politics, philosophy, and whatever else interested them. The
membership was vocationally diverse: businessmen, a clerk, a mathematician, a shoemaker, a surveyor, and a mechanic. Members of the Junto did a
great deal of what we today would call networking, promoting each others
advancement and keeping an eye out for useful connections with others
beyond their group. The underlying agenda was to help one another become
successful in their careers and good citizens. They discussed the role that
virtuessuch as prudence, diligence, and humilityplay in building a successful life.
Later in life, Franklin reflected on the role the Junto played in society: the
club continued (for forty years), and was the best school of philosophy, morality, and politics as then existed in the province. The Junto also took on civic
and charitable causes, such as establishing a public library by asking members to donate some of their own books.
VIRTUOUS CIRCLES
Might it be possible to establish this kind of mutual improvement society
today? In our world of solitary TV and digital device gazing, distrust across
cultural and political groups, and increasing social isolation, such a community seems more needed now than ever.

H O O V E R D IG E ST Fall 2016 187

This
is one
reason why
the folks at New
York Citys 92nd Street Y
have taken it upon themselves
to re-create a community much
like Franklins Junto. 92Y is a community center with a global platform, and it is
dedicated to a number of civic ventures that are
meant to enrich society and the lives of its members.
One of them, for example, was Giving Tuesday, which
was one of the most productive charitable initiatives of recent times. Now 92Y, in collaboration with the Hoover Institution and
Citizen University in Seattle, has
launched a twenty-first-century
version of Franklins Junto
called Ben Franklin
Circles. Its

[Taylor Jonesfor the Hoover Digest]

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H OOVER DI GEST Fa ll 201 6

website went live in January around Bens birthday. Its motto: Transform
your life, transform your world.
The driving idea behind its transform your world tagline is the notion
of new power, which was presented in a groundbreaking 2014 article in the
Harvard Business Review by tech entrepreneur Jeremy Heimans and 92Y

H O O V E R D IG E ST Fall 2016 189

executive director Henry Timms. New power is a grass roots, bottom-up


approach to social change. It relies on collaborations carried out among ordinary citizens rather than hierarchically organized assignments by command
structures. In economics, for example, peer-to-peer lending is an example
of new power, while traditional banking represents a case of old power. In
journalism, it might be blogging as opposed to writing in the New York Times.
Heimans and Timms wrote:
Old power works like a currency. It is held by few. . . . It is closed,
inaccessible, and leader-driven. . . . New power operates differently, like a current. It is made by many. It is open, participatory,
and peer-driven.
The Ben Franklin Circles capture the contagious energy of new power.
They take advantage of citizens desires to control their own destinies. This
was a powerful incentive in Ben Franklins pioneering time. For other reasons, it may be an equally powerful incentive today.
Since the projects launch, almost two dozen Ben Franklin Circles have
sprouted up in states including New York, North Carolina, Washington, Utah,
and Colorado, with circles in California and elsewhere currently in formation.
Acknowledging the realities
of busy twenty-first-century
Cynicism, anger, dejection, and
working lives, todays Circles
meet monthly rather than
social isolation are among the danweekly. Discussions focus on
gers todays Americans must face
peoples livestheir aspiraand defeat in our increasingly fragile
tions and concernsand
democracy.
how to bolster them through
personal improvement and mutual support. Also central are concerns about
how members can contribute to their communities and the civic society.
The ages, vocations, and ideological persuasions in the Circles are diverse,
with the essential caveat that debates be civil and respectful. This reflects
the spirit of Ben, who wrote that his Junto was to be conducted in the
sincere spirit of inquiry after truth, without fondness for dispute or desire
of victory. The rules of engagement for Ben Franklin Circles, as detailed on
the Circles website, guide participants to deep conversations that lead to
informed personal and civic choices, new friendships, and sustained relations
among members.
Every societal epoch presents its own opportunities and challenges.
Franklin lived in a land of plenty ruled by a distant colonial power that would

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H OOVER DI GEST Fa ll 201 6

eventually be confronted in a bloody war to secure the democratic future of


a new nation. Today, many of our trials tend to be of the mind and the spirit.
Cynicism, anger, dejection, and social isolation are some of the present-day
dangers that must be faced and defeated in our increasingly fragile democracy. Many citizens look in vain for the appearance of an inspired leader who
will show us a better way.
But there is another approach, more dispersed and more in tune with
contemporary twenty-first-century sensibilities. This approach hinges on
citizens taking matters into their own hands and discussing among themselves the best ways to lead productive, fulfilling, and purposeful lives and to
improve society. Ben Franklin Circles adapt a model that worked long ago to
a different world with new sorts of challengesbut they address the same
needs for personal growth, civic virtue, and social support that human beings
have shared from the eighteenth century until today.
To learn more about Ben Franklin Circles, and for information on how to start
or join one, visit www.benfranklincircles.org.
Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2016 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is Failing


Liberty 101: How We Are Leaving Young Americans
Unprepared for Citizenship in a Free Society, by
William Damon. To order, call (800) 888-4741 or visit
www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 191

HISTORY A N D C ULT UR E

A Big
Intellectual Risk
Hoover fellow Lee E. Ohanian dared to question
the belief that Franklin Roosevelts New Deal
had anything to do with ending the Depression.
His research continuesand continues to make
ideologues uncomfortable.

By Jessica Wolf

twelve-year-old study by UCLA economics professor and


Hoover senior fellow Lee E. Ohanian and Harold Cole, now a
professor at the University of Pennsylvania, continues to draw
attention across the political spectrum.

In 2004, Ohanian and Cole released painstaking research that showed how

some of the policies of venerated president Franklin D. Roosevelt actually


lengthened the Great Depression by an estimated seven years. By casting a
negative light on the historically vaunted Depression-era policies of the Roosevelt administration, their study caused a furor at the time.
After a period of great interest and discussion, interest in the research
waned. But it started to build again around 2008, thanks to links by conservative blogs and Reddit groups when President Obama took office amid a
contemporary economic challenge, the Great Recession.
Lee E. Ohanian, a senior fellow at the Hoover Institution, is a professor of economics and director of the Robert Ettinger Family Program in Macroeconomic Research at the University of California, Los Angeles. Jessica Wolf is a senior media
relations officer for UCLA.
H O O V E R D IG E ST Fall 2016 195

Curiously, Cole and Ohanians research is often seized upon by both liberals
and conservatives to bolster their arguments in an increasingly polarized
political climate. But neither side gets it right, Ohanian said, reflecting on the
research that has taken on a life of its own.
People on the right would say, Hey, lookthese guys from UCLAwhich
is not perceived as some traditionally conservative placesaid Roosevelt
was to blame for the Depression continuing, Ohanian said. Then people
on the left would say, Oh, these guys are conservative, paid mouthpieces for
the Koch Foundation, which, of course, we were not. But neither side really
understands what we did.
In fact, casual readers frequently make assumptionsmost of them incorrectabout the authors politics, Ohanian said. While the UCLA economist
said he is decidedly apolitical, aligning himself with neither partys overarching ideology, he said jokingly, Im pretty sure Hal voted for Obama, at least
the first time.
OUTING CONCEALED CARTELS
Its difficult to understand the research model used in the study without
being a professional economist, Ohanian said. News coverage over the
years has not helped the case, he said, with reporters perpetuating factual
inaccuracies.
Ohanian and Cole examined what might have happened if FDRs National
Industrial Recovery Act of 1933 (NIRA) had never been enacted. The act
allowed unions to bargain
for increased wages that
My dad was born and grew up in the reached unsustainable levels
Depression, and he told these terrible and effectively allowed for a
cartel economypromising
stories of how his family suffered.
companies that they could
establish monopolies and artificially inflate prices without fear of antitrust
prosecution.
Though NIRA was deemed unconstitutional after just two years, the Roosevelt administration still gave tacit approval to monopolies for at least four
more years, bringing relatively few antitrust cases against businesses engaging in price-fixing. This reduced competition kept real income and output
14 percent lower than they otherwise would have been, Ohanian and Coles
study maintains.
Over the years, Ohanian has received hundreds of e-mails in reaction to
the study, including requests to speak at churches in Appalachia, lecture

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to conservative groups, and moderate debates. In appreciation of his


research, one family told him they intended to name a grandchild after
him.
Ive also gotten things from people saying, How can you besmirch the
name of Franklin Roosevelt, the greatest president in the history of the
United States? Ohanian
said. Both extremes totally
Neither side really understands
miss the point of what we
were talking about.
what we did.
Roosevelt himself had a
bit of an about-face in the late 1930s, Ohanian said.
He gave a speech where he said our economy has become a concealed
cartel economy like Europes, Ohanian said. NIRA, which was the centerpiece of his economic recovery programwhether he intended it that way or
notdid promote and foster cartels, and so his policies began to change a lot
in the late 30s.
Ohanian and Coles research focused primarily on the impact of Roosevelts
early policies that allowed for monopolies and too much union power to
increase prices and salaries. Roosevelt did institute other policies that helped
the economic recovery, like stabilizing the banking system and creating
unemployment insurance and Social Security, Ohanian said.
SEARED INTO MEMORY
The ongoing attention to the economists 2004 work is understandable, said
the economist. The Depression remains an emotional topic, he said. Many
families still remember that long-lasting malaise and feel its effects.
My dad was born and grew up in the Depression, and he told these terrible stories of how his family suffered, Ohanian said. Youd look in his face,
and there was so much pain.
Ohanians interest in the Great Depression can be traced back to his time
as a doctoral student at the University of Rochester, but he was discouraged
from pursuing that
interest by his profesFDRs policies apparently kept real
sors and mentors.
income and output 14 percent lower
All of my faculty
than they otherwise would have been.
adviserswho were
terrific economists
told me it was way too difficult; no one understands it. You probably wont
crack it, and for a young person to try to do it...its just way too risky, he

H O O V E R D IG E ST Fall 2016 197

said. One faculty member told me, Wait until you get tenure; thats what
tenure is forto take these big intellectual risks.
Ohanian began to pursue this research before he received tenure, while
he was an assistant professor at the University of Minnesota. Ohanians big
intellectual risk eventually won praise from Edward Prescott, his University
of Minnesota colleague, who cited Ohanians research on depressions in his
2004 Nobel Prize acceptance speech.
Rather than rest on their laurels, Ohanian and Cole are probing even deeper, working on a book tentatively titled Troubling Times. They plan to track
the history of the American economy from the 1920s through World War II.
It will be a lot of fun, Ohanian said. And we probably will get people riled
up all over again.
Reprinted by permission of UCLA. 2016 by the Regents of the University
of California. All rights reserved.

Available from the Hoover Institution Press is


Government Policies and the Delayed Economic
Recovery, edited by Lee E. Ohanian, John B. Taylor,
and Ian J. Wright. To order, call (800) 888-4741 or visit
www.hooverpress.org.

198

H OOVER DI GEST Fa ll 201 6

H OOVE R A R C H I VE S

The Cold Wars


Pivot
When the Hungarian Revolution took place six
decades ago, the world learned the difference
between containment, the policy the United States
had adopted, and rollback, the policy it had not.

By A. Ross Johnson

his year marks the sixtieth anniversary of the Hungarian Revolution, the most violent of several upheavals in Soviet-dominated
Central and Eastern Europe during 1956 that shattered communists unwavering belief in Josef Stalin while demonstrating

Moscows continued resolve to use military force to maintain control of Eastern Europe. Significant parts of the Hoover Archives collection of material
from Radio Free Europe and Radio Liberty pertain to this period, including
controversy over the broadcasters role in the uprising.
A year before the Hungarian Revolution, Soviet leader Nikita Khrushchev
had reconciled with Yugoslavias Marshal Tito, legitimizing national communism independent of the USSR. Signing the Austrian State Treaty in May
1955, Moscow dismantled its occupation zone and withdrew all military forces from the country by November. In February 1956, Khrushchev denounced
Stalin in a secret speech that quickly became public and sent shock waves
throughout the Communist world. In June, Polish workers revolted in
A. Ross Johnson is a visiting fellow at the Hoover Institution and a senior
scholar at the Woodrow Wilson International Center for Scholars.
H O O V E R D IG E ST Fall 2016 199

Poznan. In October, banished Polish Communist leader Wadysaw Gomulka


resumed command of the party, defusing a threat of Soviet military intervention while sanctioning limited liberal reforms.
While political power in Poland remained in the hands of the Communist
Party, in Hungary protest turned into revolution on October 23 when the
secret police fired on unarmed demonstrators. Contingents of the Soviet
army intervened, but, as Soviet marshal Georgy Konstantinovich Zhukov
later admitted, incurred heavy losses at the hands of the revolutionaries and
temporarily withdrew. For a week the revolution seemed to succeed, but
when the new government proclaimed an end to Communist Party rule and
withdrawal from the Warsaw Pact, Moscow crushed the uprising with overwhelming military force. It installed a new Hungarian Communist leadership
under Jnos Kdr that imprisoned hundreds and executed leaders of the
revolution, including Prime Minister Imre Nagy and Defense Minister Pl
Malter. Two hundred thousand Hungarians fled their homeland.
People around the world demonstrated solidarity with the Hungarian
revolutionaries, but the United States and other Western governments were
deterred from intervention by the reality of a nuclear Soviet Union with local
military control (and the distraction of the simultaneous British/French/
Israeli military intervention in Egypt). The events of 1956 would shape Soviet
and American policy toward Eastern Europe, and developments within that
region, for the next three decades of the Cold War.
HINTS OF THE BREZHNEV DOCTRINE
Moscows acceptance of Austrian neutrality and withdrawal of its army
fueled hopes that Hungary might follow the same path. That turned out to be
wishful thinking, as the Soviet Union crushed the Hungarian Revolution. The
relevant precedent was not Austria, where Communist rule had never been
established and there were no gains of socialism to be defended against
revolutionaries. The precedent was East Germany in 1953, when Moscow
utilized massive military force to suppress a revolt that began as a protest
over harsher workplace conditions in East Berlin but quickly spread to a
TORN APART: A Budapest streetscape shows the banner of the short-lived
Hungarian revolt of 1956: the national flag with the Communist Partys coat
of arms torn out of the center. Crushed by Soviet troops, the revolution ended
with hundreds executed, including Prime Minister Imre Nagy, some thirteen
thousand taken prisoner, and hundreds of thousands of refugees. [Fortepan
Creative Commons]

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H OOVER DI GEST Fa ll 201 6

ONWARD: A tank rumbles through the streets of Budapest as Hungarian


revolutionaries try to consolidate power and stave off the Soviets. Pl Malter,
commander of an armored division in the Hungarian army, was sent to fight
the rebels but changed sides, becoming the most prominent military leader
to do so. Like Nagy, the rebel defense minister was executed after the revolt
failed. Also like Nagy, Malter was reburied with full honors in Budapest in
1989. [FortepanCreative Commons]

weeklong, countrywide revolt for freedom involving some half-million people


in nearly six hundred localities.
The outbreak of the Hungarian Revolution found the Soviet leadership
preoccupied with unrest in Poland and initially unable to restore Communist
Party rule. Khrushchev temporized, and after consulting East European
Communist leaders, issued on October 30 a proclamation titled On Friendship and Cooperation between the Soviet Union and other Socialist States
that promised respect for the sovereignty of individual states and more
equitable relations among them. But the very next day, confronted with the
liquidation of Communist Party rule in Hungary, Khrushchev ordered the
Soviet military crackdown.
In intervening militarily to avert counterrevolution, Khrushchev in effect
promulgated the Brezhnev Doctrine twelve years before Brezhnev articulated it in 1968 with regard to Czechoslovakia. The same policy would surely
have been followed under Brezhnev and his successor, Yuri Andropov, in

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H OOVER DI GEST Fa ll 201 6

Poland in 1982, had internal martial law failed to suppress an increasingly


radicalized Solidarity. Ultimately 1956 witnessed the most violent manifestation of an abiding principle of Soviet Cold War policy: Moscow would use
its armed forces to maintain Communist rule in Eastern Europe, a policy
reversed only in 1989 by Mikhail Gorbachev.
A MYTH OF LIBERATION
Suppression of the Hungarian Revolution by the Soviet Union in 1956 was
not the definitive turning point in Western and especially American Cold
War policy toward Eastern Europe, forcing the West to abandon initiatives
aimed at liberating the region from Soviet control. The real turning point
in American policy was 1953. The East German uprising and mass protests
in Czechoslovakia and Bulgaria spawned discussion in Washington of more
interventionist liberation policies. But by the end of that year the Eisenhower administration, which had assumed office amid campaign rhetoric of
liberation, concluded in National Security Council Report No. 174 that only
war could end Soviet control of Eastern Europe, and found that unacceptable. This conclusion was reinforced by the failure of the Truman administrations efforts at covert subversion, which had turned out to be either insignificant or compromised by efficient Communist security forces.
US policy was formally defined in NSC Directive 5505/1 (January 1955)
as promoting evolutionary reform within the Soviet European space rather
than liberation as revolutionary change. This policy reflected the conclusions
of some twenty US government studies of the Soviet orbit during both the
Truman and the Eisenhower administrations.
The events of 1956 would shape
They concluded that
Soviet control of Eastern Soviet and US policy toward Eastern
Europe was a fact of life,
Europe for the rest of the Cold War.
that the United States
could at best try to prevent total Sovietization and keep a spirit of resistance
alive, and that liberation (meaning an end to Soviet control and Communist
Party rule) was only a long-term aspiration.
The theme of liberation was revived in the 1956 presidential electoral
campaign, but it was only rhetoric, as Bennett Kovrig demonstrated in The
Myth of Liberation (Johns Hopkins University Press, 1973). National Security Council studies and directives carefully tracked ferment in the Soviet
bloc in the wake of Khrushchevs secret speech. Some NSC principals,
including Vice President Nixon, spoke in internal discussions of welcoming

H O O V E R D IG E ST Fall 2016 203

IRON FIST: An East German poster from June 1956 celebrates ten years of
Communist rule. Soon after, Soviet control was challenged in Hungary and
in Poznan
, Poland. Authority was restored in Poland through a leadership
change, but protests in Hungary turned into open revolt after secret police
fired on unarmed demonstrators. Despite support in the United States and the
West for the Hungarian Revolution, no outside forces chose to confront the
nuclear-armed Soviet Union. [Hoover Institution ArchivesHistoric Poster Collection]

FRIEND OR FOE: Czechoslovakia would have its own reckoning with Soviet
power in 1968, when the Prague Spring was crushed by Soviet troops. This
1951 poster marks a Day of Amity and Peace between the Soviets and the
Czechs. The Brezhnev Doctrinethe USSRs claimed right to intervene in
other countries to preserve communismthat suppressed Czech hopes for
freedom in 1968 had a test run in the Hungarian Revolution of 1956. [Hoover
Institution ArchivesHistoric Poster Collection]

204

H OOVER DI GEST Fa ll 201 6

RESISTANCE IS FUTILE: Soviet leader Nikita Khrushchev (right) restored


Communist rule in Hungary by placing Jnos Kdr (left) in power. Kdr
introduced so-called goulash communism in 1961, an economic model that
involved expanded economic ties with the West and minor market-oriented
reforms. But by 1968 it became clear that deep reform within the system
would be impossible. [Everett CollectionNewscom]

even unsuccessful violent protests in Eastern Europe, but their views were
downplayed in NSC directives and had no discernible effect in practice. No
behind the lines operations were organized. No exile armies were dispatched. No appeals for insurrection were issued. Radio programsincluding RFE Hungarian broadcaststhrough fall 1956 were cautionary and
emphasized, in the words of RFE policy adviser William Griffith, promoting
liberalization even under conditions of Communist rule.
Soviet suppression of the Hungarian Revolution put US policylacking
power to promote liberation and lacking instruments to promote evolutionary changeon hold for the next decade. The principal means available
to the United States for engaging East Europeans during those years was
radio broadcasts. As a diplomat in the US Embassy in Prague reported
to Washington in 1964, the only US influence on domestic Czechoslovak
developments was Radio Free Europe. A new policy vision would appear
in the 1960s, as Zbigniew Brzezinski proposed peaceful engagement in

206

H OOVER DI GEST Fa ll 201 6

Eastern Europe to promote closer ties with the West and induce gradual
internal liberalization. That vision led to expanded economic ties, cultural
exchange, two-way travel, the covert book program that provided Western
printed materials to East
Europeans, expansion
of Western radio broadUS policy was formally defined
casts, and a visitors
as promoting evolutionary reform
program that brought
within the Soviet European space
regime officials such as
not liberation.
Hungarian Communist
leader Imre Pozsgay and
non-regime personalities such as Polish lay Catholic editor Jerzy Turowicz to
the United States.
Peaceful engagement was accepted or at least tolerated by East European
communist regimes firmly in power but aware of their limitations in the aftermath of the Hungarian Revolution and ready to expand ties with the West.
ACCOMMODATION AND UNDERSTANDING
Within Eastern Europe, oscillations of Soviet policy after Stalins death in
1953 induced challenges to Stalinist orthodoxy and gave rise to demands for
reformsome minor, many radical. The June 1956 Poznan demonstrators
quickly escalated their demands from bread to freedom. In Hungary, the
Petofi Circle discussed minor reforms of the Communist system, while demonstrators in Gyr a week before the outbreak of the revolution called for a
multiparty system and a free press.
Crushing the Hungarian Revolution meant Communist Party rule and
Soviet hegemony were
inevitable facts for
East Europeans for the
Eastern Europeans were aware revolt
foreseeable future. What
was futile, while regimes sought
followed was accomto avoid internal crises. But minor
modation. Populations
reforms were still possible.
were aware of the futility
of revolt, while regimes sought to avoid internal crises. Within those constraints, minor reforms were necessary and possible.
Hungarian leader Kdr proclaimed in 1961 that whoever is not against
us is with us and introduced a new economic model, popularly known as
goulash communism, that involved expanded economic ties with the West
and minor market-oriented reforms. In Poland, Gomulka tolerated private

H O O V E R D IG E ST Fall 2016 207

TEAR IT DOWN: Revolutionaries in Budapest pull down a statue in 1956. Not


until after the failure of the Prague Spring of 1968 did peaceful protests begin
to take effect in Poland, Czechoslovakia, Hungary, and East Germany, leading
in the end to the Communist systems collapse. [FortepanCreative Commons]

agriculture, an active Catholic Church, and widespread travel to the West.


Bulgaria permitted more cultural freedom. Poland, Hungary, and Romania
ended jamming of Western radio broadcasts.
Soviet suppression of the Hungarian Revolution thus spawned revisionismmeaning some personal, intellectual, and economic relaxation without
significant political change. Revisionism in this sense prevailed until Soviet
military suppression of the Prague Spring in 1968 demonstrated that the
USSR could no more tolerate gradual peaceful reforms in Czechoslovakia
than it could the violent East German uprising or the Hungarian Revolution.
The year 1968 discredited the notion of in-system reform and led to peaceful protest on non-Marxist and non-communist grounds, first by individuals
like Vclav Havel and then by groups and organizations: the Committee for
the Defense of Workers and Solidarity in Poland, in the 1980s civic forums

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H OOVER DI GEST Fa ll 201 6

in Czechoslovakia and East Germany, Fidesz in Hungary. This emerging


civil societythe little people as Hoover fellow Timothy Garton Ash called
themwould in 1989 shatter East European Communist systems that had
become increasingly brittle as the result of minor reforms and exposure to
the West and whose leadersa political class in a system that was largely
bereft of corrective mechanisms (Hoover fellow Stephen Koktin, in Uncivil
Society)could no longer count on Moscow under Gorbachev to save them.
The events of 1956
made clear to all that
Eastern European rulers and ruled
as RFE Polish Service
alike were condemned to three
director Jan Nowakdecades of trying to reform an unreJezioranski told his
listenersRussia with
formable system.
its enormous military
might is near, and the United States is too far away. That geopolitical reality
condemned East European rulers and ruled alike to three decades of accommodation as they tried to reform an unreformable system. George Kennan
had foreseen that consequence in 1947: containment would sharpen internal
contradictions of the Soviet system. Those would eventually lead in 1989 not
to its evolution but to its collapse and the end of the Cold War.
Special to the Hoover Digest.

Available from the Hoover Institution Press is


Communicating with the World of Islam, edited by
A. Ross Johnson. To order, call (800) 888-4741 or visit
www.hooverpress.org.

H O O V E R D IG E ST Fall 2016 209


HOOVER INSTITUTION ON WAR, REVOLUTION AND PEACE

Board of Overseers
Chair
Joel C. Peterson

Vice Chairs
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Members
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210

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*Ex officio members of the Board

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H O O V E R D IG E ST Fall 2016 211

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