Global Transaction Strategy [author of the Pentagon's New Map #3 at Amazon]

Operation Iraqi Freedom could be a first step toward a larger goal: true globalization.

Thomas P.M. Barnett is on temporary assignment from the Naval War College as the assistant for strategic futures in the Office of Force Transformation, Office of the Secretary of Defense. Henry H. Gaffney Jr. is a team leader with the Center for Strategic Studies, The CNA Corp., Alexandria, Va.

The Bush administration's response to the terrorist attack of Sept. 11 was both swift (the global war on terrorism) and profound (the Department of Homeland Security). With last year's publication of the National Security Strategy, the White House went even further and described - rather boldly - a global future worth creating. By doing so, the Bush administration embraced the notion recently put forth by many experts: that Washington now stands at a historical "creation point" much like the immediate post-World War II years.

When the United States finally went to war again in the Persian Gulf, it was not about settling old scores or simply enforcing U.N.-mandated disarmament of illegal weapons or a distraction in the war on terror. Instead, the Bush administration's first application of its controversial preemption strategy marked a historical tipping point - the moment when Washington took real ownership of strategic security in the age of globalization.

This is why the public debate about the war has been so important: It has forced Americans to come to terms with what [the authors] believe is the new security paradigm that shapes this age: Disconnectedness defines danger.

Saddam Hussein's outlaw regime was dangerously disconnected from the globalizing world, from its rule sets, its norms, and all the ties that bind countries together in mutually assured dependence. Understanding this distinction is crucial for our understanding of the tasks that lie ahead as the United States not only wages war against global terrorism but also seeks to make globalization truly global.

As globalization deepens and spreads, two groups of states are essentially pitted against one another: one, countries seeking to align themselves internally to the emerging global rule set (e.g., advanced Western democracies, Vladimir Putin's Russia, Asia's emerging economies); the other, countries that refuse such internal realignment - and thus remain largely "disconnected" from globalization - due to either political/cultural rigidity (the Middle East) or continuing abject poverty (most of Central Asia, Africa, and Central America). [The authors] dub the former the "Functioning Core" of globalization and the latter countries the "Non-Integrating Gap."

Although the United States is recognized as both economic and political-military leader of the Core, our foreign policy did not reflect much unity of vision regarding globalization until the Sept. 11 attack triggered the ongoing war on terrorism. Rather, globalization was treated as a largely economic affair that the U.S. government left to private business, with the government promoting the tariff cuts and regulations that support free trade both at home and abroad. The U.S. security community worried about globalization only to the extent that it fostered the proliferation of weapons of mass destruction and the actions of certain nefarious transnational actors.

The perturbations of the global system triggered by Sept. 11 have done much to highlight both the limits and risks of globalization, as well as this country's current and future role as "system administrator" to this historical process. For example, the vast majority (almost 95 percent) of U.S. military interventions over the past two decades have occurred within the Non-Integrating Gap. That is, we tend to "export" security to precisely those parts of the world that have a hard time coping with globalization or are otherwise not benefiting from it.

Fulfilling this kind of leadership role will require a new understanding on our part as to the Functioning Core's essential transactions with the Gap, which is - unsurprisingly - the source of virtually all the global terrorism we seek to eradicate.

Living large

Although the United States represents only one-twentieth of the global population, its environmental footprint is dramatically larger. This country consumes roughly a quarter of the world's energy while producing approximately a quarter of the pollution and garbage. Economists will point out that we also produce roughly a quarter of the world's wealth, but frankly, a lot of that stays home, while we tend to import our energy and "export" our pollution. Simply put, we live well beyond our environmental means.

Our economic footprint is equally skewed. As our consistently huge trade deficit indicates, we also tend to live well beyond our economic means. Basically, we count on the rest of the world to finance our sovereign debt, which most countries - like Japan - are willing to do because the U.S. government is such a good credit risk, and the dollar is the closest thing there is to a global reserve currency. There is not a whole lot we should complain about in this deal - basically trading pieces of paper for actual goods. Put these two transactions together and it is easy to see why the United States has benefited from the rise of a global economy.

So what has the United States provided the world in return? Clearly we are a leader in technology and cultural exports, but these are fundamentally private-sector transactions that any advanced economy can provide.

The one U.S. public-sector export that has only increased its global market share with time is security. We account for nearly half the global public spending on security, and unlike any other state, we actually can export it to other regions on a substantial and continuous basis. And that is our fundamental transaction with the global economy: We import consumption and export security.

Sharing our surplus of security with the world is what makes us unique. Any advanced industrial state can sell arms, but only the United States can export stability. Yes, it does engender plenty of anger from some quarters, but from far more it elicits real gratitude - and allowance for our "living large."

Beyond containment

During the Cold War, our policy vis-à-vis the Soviet Bloc was one of containment. The Globalization Era presents a different challenge: The Non-Integrating Gap does not just need to be contained, it needs to be shrunk. Doing so will take decades, however, and in the meantime we need to "firewall" off the Core from the Gap's worst exports: terrorism, narcotics, disease, genocide, and other violent disruptions.

The good news is we already have plenty of experience working the Gap - in fact, it has been the major focus of U.S. military crisis response for the past generation. Four key events in the 1970s marked our fundamental shift from Cold War containment to Gap firewall management:

Prior to this quartet of events, the patterns of the U.S. military's permanent forward deployments and crisis responses were largely in sync - clustered in the Cold War foci of Europe and Northeast Asia. But by the early 1980s, we were clearly out of balance. Most of European Command's response activity had shifted to the Eastern Mediterranean, while most of Pacific Command's responses had slid toward the Persian Gulf.

Logically, the United States created the Central Command at that point, signaling the effective shift of our focus from Cold War containment to Gap firewalling. According to the Center for Strategic Studies (css), in the 1980s the Middle East already accounted for just over half of the four services' combined situation response days (9,288 of 16,795, or 55 percent).

Turning to the css' response data since 1990 gives us an even clearer outline of the Non-Integrating Gap. The maps on this page and the next display U.S. military responses in the post-Cold War era (1990-2002). When a line is drawn around roughly 95 percent of those responses (isolating responses involving Taiwan and North Korea in an otherwise stable northeast Asia), it captures those portions of the world that are either losing out to globalization or rejecting much of the content flows connected with its advance.

Looking at this experience, a simple logic emerges: If a country is either losing out to globalization or rejecting much of the content flows associated with its advance, there is a far greater chance that the United States will end up sending forces at some point. Conversely, if a country is largely functioning within globalization, we tend not to have to send our forces there to restore order or eradicate threats.

Flowing globalization

Four major flows must proceed over the next several decades if globalization is to continue its advance and the Gap is to be shrunk. The U.S. government and its allies in the Core must enable and balance all four of these flows, for the disruption of one will damage the others, leaving the global economy and security environment vulnerable to the sort of system perturbations witnessed in connection with Sept. 11.

Flow of people from Gap to Core. According to the United Nations, by 2050 our global population should peak somewhere around 9 billion people and decline thereafter. This will be a huge turning point for humanity in more ways than one. Take graying: By 2050, the global 60-and-over cohort will match the 15-and-under group at roughly 2 billion each. From that point on, the old will progressively outnumber the young on this planet.

In theory, the aging of the global population spells good news regarding humanity's tendency to wage war, either on a local level or state-on-state. Today, the vast bulk of violence lies within the Gap, where, on average, less than 10 percent of the population is over 60 years of age. In contrast, Core states average 10 percent to 25 percent of their population over age 60. Simply put, older societies are associated with lower levels of conflict because these older societies are emerging out of the success of globalization, with prosperity and fewer children per family.

The big hitch is this: Current U.N. projections say that by 2050, the potential support ratio (psr, or people aged 15-to-64 per one person 65-and-older) in the advanced economies will have dropped from 5-to-1 to 2-to-1, while in the least developed regions the psr still will stand at roughly 10-to-1. That means that worker-to-retiree ratios in the Core will plummet just as the retirement burden there skyrockets - unless the Gap's "youth bulges" flow toward the older Core states. Japan will require more than half a million immigrants per year to maintain its current workforce size, while the European Union will need to increase its current immigrant flow roughly fivefold - but both have great difficulty acceding to that need.

In effect, emigration from the Gap to the Core is globalization's release valve. With it, the prosperity of the Core can be maintained and more of the world's people can participate. Without it, overpopulation and under-performing economies in the Gap can lead to explosive situations that spill over to the Core. One hopeful sign of the future: The Philippines has demonstrated that such flows can be achieved on a temporary deployment or "global commuting" basis without resorting to permanent emigration or generating increased xenophobia in host nations.

Flow of security from Core to Gap. For now, the war on terrorism and our long-term commitment to rehabilitate Iraq have superseded previous Bush administration talk about an East Asian security strategy. These continuing interventions underline the reality that the U.S. military remains in the business of working the bloody seam between the Gap and the Core. In the 1990s, that seam ran from the Balkans to the Persian Gulf, but today it also extends into Central Asia, where we have built a number of "temporary" military bases in former Soviet states to support our operations in Afghanistan - with Russian acquiescence - in a remarkable turn of history.

The reality is that the United States will end up exporting security (e.g., bases, naval presence, crisis response activity, military training) into Central and Southwest Asia for some time to come. For the first half of the 21st century, the primary cluster of security threats will lie in these areas - which also happen to be the supply center of the global energy market (we identify them as a cluster because the ultimate resolutions of individual conflict situations there are highly interrelated):

While the United States already is pursuing an ambitious plan to rebuild much of post-Saddam Hussein Iraq, there is little doubt among regional experts that the world is really looking at a lengthy rehabilitation period similar to post-World War II Germany or Japan. The United States might well establish permanent military bases in Iraq, moving them from Saudi Arabia to relieve the political situation there.

The Israeli-Palestinian issue is heading toward a Berlin Wall-like separation. It may eventually involve a United States-led demilitarized zone occupation force. Then we simply would have to wait out a couple of generations of Palestinian anger as that society ultimately is bought off through substantial Core economic aid and the Palestinians reduce their family size as they achieve some economic viability.

Saudi Arabia's dramatic slide in per capita income during the past 20 years signals a downward spiral that will trigger radical political reform and/or substantial internal strife. Forestalling this may require a lot more prodding by the United States if institutional reforms are to occur and the Core is to avoid organizing yet another peacekeeping force. The course of events in Iraq will bear strongly on this evolution.

Assuming the United States remains deeply involved in the West Bank, Saudi Arabia, and Iraq, Iran's mullahs will fear Tehran is next and likely step up their anti-Americanism - if that is possible. The United States therefore will continue its long-term containment strategy until the restive Iranian public prevails in its desire to join globalization.

The combination of prosperity stemming from globalization and the export of U.S. surplus military power has taken "great power war" off the table in region after region. As the 21st century begins, such warfare is essentially unthinkable in the Western Hemisphere, in Europe (where nato members and Russia have joined in a common effort), or for that matter anywhere on the high seas. We hope that in a couple of decades, the same combination of efforts - a mix of economic and security cooperation - makes war unthinkable throughout developing Asia. But for the foreseeable future, it is the export of U.S. security into the Islamic regions of Southwest and Central Asia that remains our most serious international security task. We are witnessing the beginning of a long-term integration effort there, one that will ultimately rival our Cold War effort in Europe in its strategic centrality.

Flow of energy from Gap to Core. Sometime in the next 20 years, Asia will replace North America as the global energy market's demand center. That is because U.S. energy demand will increase rather slowly in the coming decades while Asia's will double. Asia has sufficient coal but will import the vast majority of both natural gas and oil as demand skyrockets.

The great source for all that Asian demand will be Central and Southwest Asia plus Russia. A codependent relationship is already in the making: Energy-strapped Asia increasingly depends on political-military stability in the Middle East, while the no-longer cash-rich Middle East increasingly depends on economic growth in Asia. According to Department of Energy projections, by 2020 Asia will buy just under two-thirds of all the oil shipped out of the Persian Gulf, and the Gulf will account for roughly four-fifths of Asia's oil imports.

Disrupt the flow of Middle East oil, and Asia's full integration into the Core is put at risk as its economies falter. India or China could feel the need to play "great power" in the Gulf if the United States drops that ball. That could create an awkward competition among the Core countries, putting us all at the mercy of the Gap's chronic conflicts.

The United States must enable the smooth flow of energy from the Middle East to Asia because the latter is such an important partner in our global transactions. China and Japan are the two greatest sources of our trade deficit, and Japan long has been a leading buyer of our sovereign debt. China's domestic market may become our greatest export opportunity as it opens up under the World Trade Organization's guidelines. India, meanwhile, supplies half the world's software. In the end, it may not be our oil supply but it most certainly will be our prosperity that we protect when we export security to the Middle East.

Flow of investments from Old Core to New Core. Unprecedented flows of foreign direct investment are required for Asia's energy and other infrastructure requirements, approaching $2 trillion by 2020. Asians themselves will shoulder much of the burden, but plenty more long-term money will have to come from private investors in the United States and Europe, which in combination control roughly two-thirds of the annual global flow of approximately $1 trillion. So not only is Asia (the "New Core") dependent on the Gap for energy, but it is also dependent on the "Old Core" countries (the United States, European Union) for the financing. Put these two realities together, and you begin to understand that China's "rising" is far more about integration with the global economy than Beijing seeking some illusory power or hegemony.

The major problems with Asia's energy demands and investment climate are threefold: Asian governments, especially in China, still play far too large a decision-making role, delaying the rise of private-sector markets; national legal systems are still too arbitrary, meaning the rules are not applied equally to all players; and there are still too many chronic security flash points.

Continuing U.S. military presence in Asia helps deter the "vertical scenarios" of war (e.g., China-Taiwan, India-Pakistan, the Koreas), while enabling markets to emerge and tackle the harder, long-term "horizontal scenarios," such as meeting the region's ballooning energy demands while mitigating the already profound environmental costs. So long as markets can deflate buildup of pressure associated with all this development, none of these horizontal scenarios should segue into vertical shocks, i.e., conflicts. In effect, our military forces occupy both a physical and fiscal space in the region, encouraging Asian states to spend less on defense and more on development - the ultimate security.

Transaction Strategy

The "Transaction Strategy" is nothing more than a U.S. national security vision that recognizes the primacy of these four global flows. That means the U.S. government cannot pursue any national policy - such as the war on terrorism, the preemption strategy, missile defense, or exemptions from the International Criminal Court - in such a way as to weaken this fragile, interdependent balancing act across the globe as a whole. Instead, all security initiatives must be framed in such a way as to encourage and strengthen these system-level bonds. We will accomplish this best by being explicit with both friends and foes alike that U.S. national security policy will necessarily differentiate between the role we need to play within the Core's ever-strengthening security community (i.e., more assurance/deterrence-oriented) and the one we must assume whenever we enter the Gap (more dissuasion/preemption-oriented).

If that is the overarching principle of the Transaction Strategy, then its macro rule set on security can be summarized as follows:

Is this a strategy for a Second American Century? Yes and no. Yes, because it acknowledges that the United States is the de facto model for globalization - the first multinational state and economic union. And yes, because it asserts that U.S. leadership is crucial to globalization's advance. But no, in that it reflects the basic principles of "collective goods" theory, meaning the United States should expect to put in the lion's share of the security effort to support globalization's advance because we enjoy its benefits disproportionately - hence this is a practical transaction in its own right.

he seemed to slam America for using 25% of the world's resources

I think he merely pointed out the obvious fact that this may lead to some strategic tensions in years to come as Asian demand for resources increases. He in fact spent a fair amount of time discussing why we continue to get away with it. As wealth elsewhere increases, and demand for resources increases, price will increase. Either our productivity will have to increase proportionately wrt the rest of the world, or by simple economic laws our share of the take will decrease.

China?

Folks sure forget things quickly around here. The Cold war ended largely because people figured out that the major powers were going nowhere with enormous arsenals of nuclear weapons pointed at each other. Those aresenals still exist and those rules (it is suicide to strike a vital interest of a nuclear power) still exist.

To be very blunt, no China is not going to swipe Siberia from Russia.

except maybe the Islamacists who don't seem to need nukes

And it is what to do about the ISlamacists that this whole thing is about. I think that with the recent incident in Russia along with the rest of the internal debate here in the U.S., the stretegic decisions about whether to tolerate it or fight it are settled. Kerry's ship sank, and we will fight on. Russia will now join the fight. I suspect tolerance for Arafat just dropped another point on the world scale, and while Old Europe will continue to defend him, they are becoming irrelevant.

He seemed to be thinking "look how entertaining I am" during parts of the presentation.

You have to remember that a large part of his intended audience are senior (O5-O6) active duty military officers who have a lot of other things on their minds. In order to communcate he has to engage and entertain.

One of the most amusing moments was when he said "Let's just round them all up and force them to conver to Christianity... oops there I go channeling Ann Coulter... well let me tell you what it is like to be skinny"

FAPP = for all practical purposes.

No nation is going to take **all** of Siberia, for the reason stated in my comment. However, that said, the notion of another nation taking some chunk of Siberia has been around for centuries, dating to at least the Khanate.

More recently, at least Japan (as witness their concept of the ''Northern Resource Area'' before and during WW II, and the trade component of casus belli for the Russo-Japanese war of 40 years earlier) and China (lumber and minerals were routinely taken from Siberia during the Ming and Qing ('Manchu') dynasties) have had designs on Siberia.

England had what we might nowadays call a ''look-see'' at the proposition when she was involved in the Opium Wars, but cooler heads prevailed, fortunately. In the 1890s, even the U.S. Senate toyed with the notion of extending the Seward purchase into Asian Russia (the czars were always needing money for their assorted multi-front wars), and had McKinley not been assassinated, the U.S. might very well have ended up owning a piece of Siberia.

Likely the most obvious candidate today would be China, and I should suppose such an action on their part would NOT be a matter of simple greed or expansionism. We don't get the chance to observe just how unstable the PRC is. It's quite easy to design an historical ''what-if'' game wherein China, in an attempt to rally national unity due to desperation of solving its internal problems, might concoct a ''war'' out of thin air wherein the object would be the taking of some portion of Siberia. Is this likely in the absolute sense today, or in 5 years' time? No. In 50 years' time, however, all bets are off; tell me how relatively stable both Russia and China are, as unisoverign nations, and I'll give you a guesstimate of the possible sequel. The probability at that time, possibly even a decade or so sooner, will be well above zero.

Geopolitical weakness has ALWAYS bred opportunism, in any period you like of mankind's history. Until/unless Russia can become something resembling a modern coherent nation, it will continuously be a target of such opportunism, whether military or economic (you can ask Soros about this latter point, to name just one example).

Barnett Posts more recently

September 05, 2004
This election is looking better and better for Bush

“Internationally, Taking Sides in the U.S. Presidential Race: In Europe, seeing ‘a world election in which the world has no vote,’" by Patrick E. Tyler, New York Times, 4 September, p. A10.

“Bush’s Second Term: Aiming for a transformation,” by David Brooks, NYT, 4 September, p. A27.

“Kerry Urges Voters to Look Past Bush’s ‘Last-Minute Promises,’” by David M. Halbfinger, NYT, 4 September, p. A1.

Already the Europeans are fretting over four more years of Bush, but they see it coming, primarily because “he comes over as a strong leader and John F. Kerry doesn’t.”

I think David Brooks has it right: Bush’s second term will be more transformational than the first. Already, he’s rewritten what it means to be Republican, which used to mean small government but now means a very activist government and a very activist foreign policy.

Meanwhile, Kerry’s latest pitch is to beg voters not to listen to Bush’s promises. That sort of tack worries me a lot. Doesn’t sound like a winner’s approach, now does it? Posted by Thomas P.M. Barnett at September 5, 2004 09:25 AM

You're most welcome. I'm not saying that he is a bad advisor in that capacity. He might be a great tactical advisor for all that I know.

But beware of anyone who implies that our President and Republicans want one world government. Our Party and President have absolutely refused to put us under UN jurisdiction on a number of important issues while only delivering empty ruses that imply false fondness for cozyness with the UN gang. We refuse when we must and pretend when that will defuse or postpone fights until we wish to fight.

It's common knowledge that Kerry and the Democrats are those who want one world government.

Feeding conspiracy fodder ("globalization," ad infinitum, falsely/erroneously assigned to us) to our domestic kooks and foreign enemies--even if only dim folks are affected by it--is one tactic toward getting Democrats in the White House, and that's the most dangerous tactical propaganda against us that anyone can issue, IMO. Issuing any piece containing that word used frequently and libelously in our behalf during the last days of a campaign is antithetical to our effort.

Andy, you read too much into my comment.

I criticised exactly ONE sub-premise of his argument, and fairly so, I believe. It is simply not rational to assume the longer view status quo for Russia and China, and to lump either of them into one part or the other of the ''Core/Gap'' dichotomy. This may be a convenient device, in the aid of having a nice, tidy theory to present, but this can in no sense be termed ''real-world''.

The phrase ''it's all a dog's dinner'' refers, in the conclusive paragraph, to the broad conditions involving Russia and China, NOT to the general notion of globalisation (with which, I fear, we're rather stuck in the long run), nor to ''Core/Gap'' worldview (although I think his focus on geopolitics and economics is relatively overstressed compared to the importance of ingrained cultural mores), nor to any other portion of his discussion.

This gentleman aside for a moment, you can hardly be impressed, over any significant period of time, with the ''track record'' of practical results that have devolved from the adherence of governments and financial markets to finely-spun academic theories. Can you say ''War on Poverty'' and ''Great Society'', both of which devolved from impeccable (cough) academic sources? Can you say ''Long-Term Capital Management'', two of whose chief partners were Nobel Prize winning academics? Would you care to sit for another hundred or so examples, just off the top of my head?

Beware embracing theory UNTIL there has been demonstrated some practical real-world result.

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