Doubling Down on Privatization and Militarization

(This is Part 4 of a review of Ian Bremmer, The End of the Free Market: Who Wins the War Between States and Corporations? (Portfolio, 2010); here are parts appears 1, 2, and 3. The conclusion will appear tomorrow.)

By the end of the book, Bremmer offers a mercifully short list of recommendations for future policy action in the US and other free market countries. Despite the enormous market manipulations by state capitalist regimes that he’s just cataloged, he still encourages free trade (190). Despite raising worries that sovereign wealth funds could try to destabilize the US, he warns politicians not to “play populist politics with foreign investment” (193). Finally, he advises that the US government “can extend its singular international influence for decades by working to preserve the country’s hard power” (197). If we assume that other countries are going to be upping their military spending, that could translate into massive new investments for the US to preserve the already immense advantage it now enjoys. Rather than promoting an industrial policy that might help reduce our dependence on foreign oil, Bremmer counsels that a renewed effort to maintain US capacities to project force abroad is the best route to future prosperity and influence.

Unfortunately, it’s just as likely the opposite is the case. War costs are enormous, even after hostilities have ceased. Blowback is always a possibility. Andrew Bacevich “traces the long-term erosion of America’s economic, political, and military might to the peculiar delusion that history’s direction is preordained, and that the United States is destined to play the lead role.” In The Limits of Power, Bacevich puts Bremmerian aspirations in a darker light, arguing that resort to hard power often amounts to little more than an effort to maintain outsized US use of world resources. For Bacevich, this leads to a “condition of dependence—on imported goods, on imported oil, and on credit.” It’s hard to see how the US will fund the hard power Bremmer seeks without endless deficits. Bremmer’s promotion of hard power may have less to do with a coherent grand strategy than with the cultural currents of contemporary American politics—for, as Bacevich notes in The New American Militarism, “Today as never before in their history, Americans are enthralled with military power.”

Admittedly, as Brad DeLong & Stephen Cohen note, there is a real economic rationale for building up hard power: it can amount to an industrial policy, fostering innovation that is politically impossible to fund otherwise. But Bremmer does not appear open to the virtues of industrial policy. Bremmer instead engages in what James Kwak calls the private sector fallacy, assuming that the most important private companies must be more efficient than parallel entities in the nonprofit or government sectors. Bremmer is not as doctrinaire as Casey Mulligan, but the ideology he subscribes to is clear. The extraodinary economic failures of the past decade have rendered that belief system untenable. It’s time to move on, but Bremmer appears stuck in the Washington Consensus of the past.

Image Credit: George Grosz, Eclipse of the Sun (1926).

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