Imbalance of Power
Robert Skidelsky
Washington | Wednesday, March 17, 2004

The Japanese attack on Pearl Harbor created the Grand Alliance against fascism, just as the September 11, 2001, attacks on the World Trade Center and the Pentagon created the global coalition against terrorism. The leaders of the Grand Alliance were the United States, Great Britain, and Russia, with China a somewhat distant fourth. Today’s chessboard has not changed that much.[] With his historical debt to the 19th century Austrian statesman Klemens von Metternich, former U.S. Secretary of State Henry Kissinger has talked [] about a new “concert of great powers” to keep the peace in the new century.
The parallel can be taken []further.[]. In each case it was an attack on the United States that brought the global coalition into existence. Before 1941, the United States was isolationist; before September 11, the Bush administration was[] “unilateralist.” Each of the two attacks forced Americans to engage more strenuously with a world from which geography and history had shielded them. The questions[] regarding that engagement remains as before: On what terms, with what aims, with what permanence, and with what friends?
To answer these questions[], it may be helpful to look back on the politics of the original Grand Alliance. Here the protagonists were not only British Prime Minister Winston Churchill and U.S. President Franklin Roosevelt but John Maynard Keynes (who virtually ran Britain’s wartime external financial relations) and []U.S. Secretary of the Treasury Henry Morgenthau Jr. and Assistant Secretary of the Treasury Harry Dexter White. While the two government leaders concentrated on how to fight the war, Keynes and his U.S. counterparts negotiated on who was to pay for it. As Keynes wrote of Churchill’s visit to President Roosevelt soon after Pearl Harbor: “It has been a question of buddies sitting around writing large numbers of tanks and planes on paper … [with] no financial matter … given a minute’s consideration.”
What kind of alliance was it? For many Americans, it has been forever embalmed in the warm glow of Churchill’s memorable prose: a union of the two great democracies fighting fascism; a union cemented not just by shared values but by an unparalleled act of generosity by the United States in the form of the military aid provided through the Lend-Lease Act. These memories have merged almost seamlessly into the start of the Marshall Plan, the creation of NATO, and the struggle against communism.
The Not-So-Special Relationship
Reality and myth are related, but not as closely as memory has made them. What has been forgotten is [] the bitterness of wartime Anglo-American rivalry. Churchill was fighting to preserve the British empire. Keynes’s war aim [] was “the retention by us of enough assets to leave us capable of independent action,” [] - a necessary condition of Great Britain’s survival as a Great Power. And the United States? It was far from being in accord with either of these objectives. It wanted the war to end with Great Britain cut down to size—no longer in a position to oppose U.S. plans for a postwar order. Behind the facade of the Grand Alliance, an intense jockeying for postwar position was taking place.
In this struggle, the United States had a huge [] weapon in its hand in the shape of[] lend-lease. Lend-Lease had a double aim. The first was to keep Great Britain in the war, partly for the protection of the United States itself, by keeping Adolf Hitler out of the Atlantic. The lend-lease bill was enacted in March 1941, eight months before Pearl Harbor, []when it was by no means clear when, or even whether, the United States would enter the war.[] It was a brilliant political ploy by Roosevelt to bypass the Neutrality Acts, which forbade U.S. government loans to belligerents. In principle, however, it was no different from Great Britain’s policy of subsidizing other countries to fight France in the continental wars of the 18th century.
But the U.S. administration also realized that lend-lease could be used as a lever to pressure London to sign on to Washington’s plans for the postwar world—a world without the British empire, Sterling Area, or Imperial Preference System (which discriminated against American goods). Keynes’s wrangles with the Americans were so fierce that he was driven to write: “I always regard a visit to the United States as[] in the nature of a serious illness to be followed by convalescence.”[p.114] The lesson for today is that the politics of any wartime alliance are concerned not just with how to achieve victory but with how to share the sacrifices and allocate the spoils of victory.
This brings us to a second theme from the past: how to make peace. A good settlement of a war[] is one that results in a durable peace. The Treaty of Vienna [] that ended the Napoleonic wars and set up the Congress system is an example of one such. The earlier Treaty of Westphalia, which ended the Thirty Years’ War and is generally recognized as the first conscious application of “balance of power” theory to international relations, is another example. But it also might be argued[] that the physical destruction of Carthage by Rome in 146 BC[] was a good settlement because it brought to an end the century-long cycle of Punic wars.
In his famous 1919 polemic, The Economic Consequences of the Peace, Keynes took the classic view that either you crush your enemy [] or you conciliate it. The worst outcome was a settlement that was too harsh to conciliate and not harsh enough to crush. This,[] he thought, exactly described the Treaty of Versailles, which is why he predicted a war of revenge by Germany. In particular, he attacked the policy of reparations because it maximized the irritation of the defeated with minimum benefit to the victors.
The planning for peace in the Second World War took a Carthaginian turn with the Morgenthau Plan that aimed to pastoralize as well as dismember Germany. When someone suggested to Morgenthau that an agrarian Germany bereft of industry would not be able to support its existing population, he casually suggested dumping the surplus in Africa.
In its stark form the Morgenthau Plan was never adopted, but there is little doubt that Germany was more harshly treated after the Second World War than after the First.[] Its structural capacity to wage a new war was drastically reduced by partition into two parts and by Allied reforms of its constitution and industrial structure. [] A similar policy[] was applied in Japan. It should not be forgotten that both Japan and Germany were physically occupied by the victors for several years after the war and that they were subsequently embedded in multilateral organisations[] controlled by the United States and (in East Germany’s case) the Soviet Union. It was not until reunification in 1990, following the collapse of the Soviet empire, that Germany regained[] some room for maneuver in high politics—50 years after Hitler launched the European war.
However, despite these measures[], the treatment of Germany after the Second World War does not really qualify as a Carthaginian peace, for Germany was given positive incentives to break with its past that the Versailles Treaty had not provided. The most important of these were Marshall Aid[], the rapid integration of West Germany into the NATO alliance, and the deliberate commitment by the United States to maintain a recession-proof, free world order.
Virtuous Isolationism
The relationship of the United States to the central traditions of European diplomacy has always been highly ambivalent. George Washington’s farewell warning that “there can be no Greater Error than to Expect or Calculate Upon Real Favors from Nation to Nation” [FC caps in this quote] was a call for isolationism that has echoed throughout U.S. history. Washington wanted the United States to steer clear of entangling alliances, because they would sully America’s original virtue.[]
Of course, isolationism has long ceased to be an option for the most powerful nation in the world. But the isolationist legacy is still there. It helps explain not just the somewhat intermittent attention the United States gives to foreign policy but the feeling that when Americans are engaged in foreign policy it is from a position of exceptional virtue.
Americans do not think naturally in terms of alliance politics. They want to be either uninvolved or masters of the situation. For example, the European notion of the balance of power has never had much resonance in the United States. Americans like to think that their own country is the uniquely godly power in a world of fallen angels and that their plans and their ways of thinking are genuinely good for everyone. They are startled and annoyed when others disagree. President Woodrow Wilson came to the Paris Peace Conference in 1919 trailing what French Prime Minister Georges Clemenceau called his Fourteen Commandments, and the Roosevelt administration, too, had extensive peace plans based on U.S. principles rather than contemporary reality. Wafted[] from isolationism to world supremacy, the United States has never comfortably occupied the intermediate ground of international relations, in which there is no white or black, only many different shades of gray. Americans want partners who play supporting roles, not allies, because Americans believe they alone have the best plans.[]
It is too easy[] to douse this New World idealism with Old World cynicism. The power to do good is very seductive and not always illusory. An Atlantic Community (which in some ways might be thought of as an extension of the United States), united by a shared value of freedom, resolute in its defense, and gradually extending its boundaries[], is a noble vision. []
Moreover, for the first time in history there is, in the United States, a genuine world power, one that cannot be effectively challenged by any other combination of powers. This supremacy, it could be argued, makes possible a quantum leap in international organization from the old politics of competitive imperialism and balance of power to a new universalist []world order based on liberty, democracy[] and the rule of law. Are we not, for the first time, in a position to overcome the limitations that kept the world warlike and poor for so long? This vision is bewitching, but Utopian.[] The world history of the future cannot be written according to an exclusive American script.[] The United States will continue to be the paramount leader in international affairs, but the new world order, if it is to flourish, will have to be a negotiated one.
This point brings us back to the Grand Alliance which[]won the Second World War. Today it is commonly believed that at its core was the Anglo-American “special relationship.” Yet if one goes through the history, one discovers that this was a relationship special mainly in its difficulties. These difficulties only []waned as British power declined and the Soviet threat became paramount.
[]There has been a systematic misreading of Anglo-American relations—a projection backward in time of a partnership that was only fully consummated after the Second World War. The root idea is that of[] a natural union[] of what Churchill called the “English-speaking peoples,” which disclosed itself in two world wars, and the leadership of which was gradually transferred from Great Britain to the United States.
This perspective opens with the Anglo-American rapprochement of 1898–1906, in which a number of vexatious Anglo-American disputes ranging from Alaska to Venezuela were settled on largely U.S. terms. During this period, Great Britain excluded the possibility of war with the United States, so as to be better able to meet more pressing challenges to the British position in Europe, South Africa, and Southern Asia. There is a lot in this view, notably propounded by Canadian diplomat Lionel Gelber in his 1938 book, The Rise of Anglo-American Friendship. What it[] leaves out is that Great Britain was simultaneously seeking to ensure itself against a potentially lethal combination of enemies by forging alliances with both Germany and Japan, only the second of which came to fruition.
Much more important, the conventional view omits[] the fact that the First World War was followed by a wave of U.S. isolationism, driven largely by Anglophobia. U.S. public discourse in the interwar years was dominated by the view that the British had inveigled the United States into a war that served not the interests of the American people but a small group of financiers and arms manufacturers. This sentiment led to the Neutrality Acts.
The roots of Anglophobia lay in the American[] War of Independence itself, but it was nourished by the Irish and German immigrations, the existence of the British empire, global financial and commercial competition, and cultural insecurities[]. Anglophobia encompassed both political parties. It tended to make the Republicans isolationist, despite some East Coast Anglophilia. The Democrats were more interventionist. But from Roosevelt downward there was the conviction that while the United States might need to go to war to rid the world of Nazism, it should not do so to defend Great Britain’s world position. As late as October 9, 1945—after the war was won—a British Treasury official in Washington wrote: “The pro-British line always needs defending in this country; the anti-British never.”
In the 1930s[] the financial and commercial rivalry between the two countries rose to a peak.[] Great Britain may have been the “going” and the United States the “coming” power, as Harry Dexter White put it with []brutal frankness, but Great Britain had a lot of assets left to keep it going. Among these assets was the British empire, which in the Ottawa Agreement of[] 1932 started to discriminate against U.S. goods. Cordell Hull, then U.S. secretary of state, described the Agreement, which set up the imperial preference system, []as the “greatest injury in a commercial way’ ever inflicted on the United States.[]
There was thus[] nothing inevitable about Anglo-American partnership in the 1930s. Indeed, it was only the impossible character of the Hitler regime that prevented an Anglo-Franco-German understanding, which would have led to a substantial consolidation of European power in the world. The thinking behind European unity goes back long before the birth of the European Economic Community in 1957. Originally seen as a counterweight to the United States, the European Union grew up as an American protectorate only because of the Second World War.
When Keynes and British Ambassador Lord Halifax first came to Washington in 1941 as begging plenipotentiaries of “plucky” Britain, they were soon made aware of the strength of Anglophobia. Halifax was regularly shouted down as he traveled around the United States trying to rally support for Britain. It was not until August 1941, when he faced down an egg-throwing crowd in Detroit with the unflappable remark, “You are lucky to have eggs to throw,” [ok]that his relations with the American public and press started to thaw.
Keynes did not encounter outright hostility in Washington so much as deep suspicion of British motives, which his reputation for cleverness did nothing to dispel. When he first arrived at the U.S. Treasury, one of Morgenthau’s officials asked Keynes’s private secretary, “Where’s your lawyer?” When the British official explained he had none, he got the reply, “Who does your thinking for you?” Keynes, of course, was perfectly capable of doing his own thinking. But the very speed of his thinking and the subtle quality of his plans inflamed the suspicion that he was trying to pull a fast one, as indeed he was. “He’s one of those fellows that just knows all the answers, you see?” U.S. presidential advisor Harry Hopkins told Morgenthau.
The Americans knew the British were in a hole. At one point in the second Quebec conference in 1944, Churchill expostulated to Roosevelt: “What do you want me to do … stand up and beg like Fala [the president’s dog]?” Groveling was not Churchill’s style and it was not Keynes’s. As a British Treasury official stationed in Washington perceptively wrote: “Maynard thinks we are a great [and] independent nation, which on the financial side is patently not true … I think he is inclined to ask as of[] right what they are only prepared to give as a favour.” [p.113]
The British fought hard to retain some room for maneuver in the Grand Alliance, short of using the unthinkable sanction of making a separate peace with Nazi Germany. Churchill refused to discuss the future of the British empire with Roosevelt. When forced to do so, he agreed to pious declarations like the Atlantic Charter in 1941. In financial and economic negotiations, the British inserted or tried to insert escape clauses into every commitment they signed. On the whole it was a losing battle. On his last financial mission to Washington in 1945, Keynes wrote to his mother, “May it never fall to my lot again to have to persuade anyone to do what I want, with so few cards in my hand.” The fact that the postwar world turned out to be worse than the Americans hoped and better than the British feared was the achievement of that third pillar of the Grand Alliance, the Soviet Union.
Here I come to a more controversial point: Many members of the Roosevelt administration, including Roosevelt himself[], expected the Soviet Union, not Great Britain, to be the United States’ chief postwar partner. This inclination was partly a matter of power wanting to talk to power. Only the Soviet Union could match the United States in raw resources. The American expectation of[] a U.S.-Soviet partnership was also[] partly because there was no commercial and financial rivalry to sour relations. But most importantly, it was a matter of ideological illusion. Odd as it now seems, the “democratic,” “socialist,” and “peace-loving” Soviet Union of Uncle Joe seemed a much more attractive partner to the American left than did “imperialist,” “semi-fascist,” and (with Churchill as its symbol) “bellicose” Great Britain. In fact, hardly anyone in Washington knew anything about Russia except for its heroic resistance to Nazism. And most of the information filtering through was largely the work of Soviet spies, communists, and fellow travellers in Roosevelt’s administration. Britain was not only not part of this heady vision of American-Soviet condominium but a positive obstacle. Here then was another reason for cutting Britain down to size.
Disillusion with the Soviets came slowly, but when it arrived it came like a thunderclap. At the end of 1944, Keynes had comforted himself with the thought that the United States was now committed to the restoration of Great Britain as a Great Power. American illusions about its other allies were fading: “There is nothing to be found reliable or homely in the habitable globe outside Britain and the British Commonwealth. This, today, is America’s deepest, least alterable conviction—a sure rock on which, whatever may appear on the surface, we can build with safety.” It took the Cold War to make Keynes’s prophecy come true.
What Turns Allies Into Partners?
History is not a good basis for prediction, since every historical event is unique, and since, despite all our backsliding, we do make progress in understanding the world and dealing with its problems. Nevertheless, used with care, history can teach []important lessons and alert us to[] the possibilities and limits of successful action.
The first lesson is that, in thinking about foreign policy, we need to distinguish between partners and allies. Of the four countries that made up the Grand Alliance, two (the United States and Britain) became partners, and the other two (Russia and China) ceased even to be allies. Allies are for temporary objectives; partners are for the long haul. Wars between partners are unthinkable; future wars between allies remain possible.
What converts allies into partners? Shared values and[] past associations are [] obviously important. But they are not enough. The argument that democracies never go to war with each other should be treated sceptically. Nor does free trade automatically guarantee international amity, as nineteenth century liberals fondly believed. As long as there are nation-states, there will be conflicts of national interest, and therefore the possibility of war.[]
Just as important as shared values in converting allies into partners—and this is the second lesson suggested by the wartime alliance—is asymmetry of power. Great Britain did not really become a “reliable” partner of the United States until it was no longer powerful enough to be a serious rival. To adapt Harry Dexter White’s phrase, the “going” powers have to be “gone” before they become partners in a joint enterprise. The relationship between the United States and Western Europe had reached this point by the end of the Second World War; the partnership was consolidated in the NATO treaty during the Cold War and is now unbreakable. Talk of setting up Europe as a “third force” between the United States and the Soviet Union after the Second World War was never realistic.[] The historical moment had passed.
Asymmetry of power[] does not negate the need for partners to be treated with consideration. They must believe they have some influence over the partnership. Otherwise, the full value of the partnership is lost. Partners can also be very useful as intermediaries or go-betweens. Such was the role played by British Prime Minister Margaret Thatcher in her shuttles between U.S. President Ronald Reagan and Soviet President Mikhail Gorbachev in the mid-1980s. Today, British Prime Minister Tony Blair has been playing the same kind of role in Europe, the Middle East, and Asia.[]
In any partnership, there will always be an awkward member. In the Western alliance, this part has been played by France with great elegance and to the frequent irritation of the United States, but with some benefit to the partnership as a whole[] by making it appear[] as not wholly subservient to U.S. wishes.
Russia and China were allies in the Grand Alliance and are allied with the United States in the coalition against terrorism today, but they are not partners of the United States, though perhaps Russia would like to be. []But Russia is still very different from the West and is right to think of itself as a coming, not going, power. Both of these things are even more obviously true of China. There is no reason to anticipate that either country will become actively hostile to the United States. But they are, or will soon be, in a position to bargain their place in the international order, and therefore to shape its future. The same will be true of India. In its relations with these powers, the United States will be much more in that intermediate area of international relations—more like a balance-of-power situation—in which it has never been comfortable.
This argument is admittedly “state centered.”[] Many people have argued that globalization is putting the nation-state out of business and that the new units of decision making are regional or supranational bodies (or, if you are against globalization, multinational corporations). “Governance” is supposed to have replaced “government.” September 11, 2001, has shown that however true this may be of “soft” politics, it is not true of “hard” politics. The crucial decisions to act in the wake of September 11 were taken by Bush, Blair, and Vladimir Putin, just as in the Second World War they had been by Roosevelt, Churchill, and Stalin—that is by the heads of national governments, and there are no governments that are not national. September 11 []has[] shown the distance the European Union still has to travel before it can make life-and-death decisions on behalf of its members.
What about the Islamic world? It has less of a permanent interest in working with the United States than Russia or China do, and it has many serious grievances against it, not least in connection with Palestine. On the one hand, the facts of power are overwhelmingly in favor of the United States. This imbalance destroys any notion that Islam might be in a position to mount a serious challenge to the West. The asymmetry of power is simply too great. Even if the West is as decadent as Islamic fundamentalists claim, unlike the decadent civilizations of the past[] it has hugely superior firepower (much more so than between the 7th and 17th centuries when Islam mounted a serious challenge to[] Christianity). The ease and speed with which the United States destroyed the Taliban in Afghanistan is a much more convincing demonstration of power than was Osama bin Laden’s suicide mission of September 11.
On the other hand, unsettled Islamic grievances can keep terrorism in business. The events of September 11 have brought clarity to the problem of peacemaking in the Middle East. Everyone agrees that things cannot be allowed to drift on as they have for many years, in face of the latest Palestinian uprising. But are we driven to the choice between a Carthaginian peace and what is opprobriously called appeasement of Palestinian terrorism?
If we examine the Israeli-Palestinian conflict in these terms, it surely becomes clear that the Carthaginian solution on its own is a non-starter, whoever tries it. The West would not tolerate a Palestinian attempt to destroy Israel. There would be more support, perhaps, for a permanent occupation of the West Bank by Israeli forces, backed up by the West. However, on closer inspection, this solution too loses its allure. It is not just contrary to the ethics of our time, but it really would lead to a “clash of civilizations.” Every Islamic state would be host to terrorists. They could not overthrow the West, but they could inflict huge damage on its way of life. Nor can the United States and its allies restore a vanished imperium over the Islamic world.
The classical alternative to conquest is appeasement. The Palestinians are to be given a “viable” state in the occupied territories. Israel’s security is to be guaranteed within the agreed international frontiers. This formula is the basis of the “land for peace” process. The idea that a settlement along these lines was almost clinched at Camp David in 2000 is an illusion. There never was enough ‘land’ available to satisfy the passionate possessiveness of all those with claims to it. And ‘land for peace’ never made economic sense. The last thing the Middle East needs is a new state, with a new set of obstacles to trade and migration in which is essentially a single economic space. []
The solution of the German problem after the Second World War suggests an alternative approach.[] Germany was not only deprived of the structural capacity to wage aggressive war; it was given positive incentives to renounce the methods of the past. Hitherto the political incentives given to the Palestinians to abandon armed conflict have been far too weak, and the economic incentives almost non-existent.[]
So should we not try to restart the search for peace on a new tack? The occupied territories might be declared a UN mandate, with de jure NATO/UN occupation replacing de facto Israeli control. The enforced peace should be accompanied by a new Marshall Plan for the occupied territories and the Palestinian diasporas, supplied jointly by the United States and the European Union, which aimed at building up a regional business infrastructure, getting the million or so Palestinians out of camps and into jobs, and helping reopen the clogged channels of trade and migration. The economic area thus established could in turn become the nucleus of a Middle Eastern Common Market. Further down the road, moderate leaders on both sides might come to accept the advantages of a political federation, resulting in a new entity, Israel-Palestine, self-governing in its component parts. There are many possible variations on this approach. But such orthogonal thinking, I suggest, is needed to lift the peace process out of its present rut.[]
To sum up: the chief difference between now and then is that power has become more asymmetrical. This imbalance allows alliances to become partnerships and gives the United States more scope to fashion a world to its own liking. But there are limits. Over much of the world, the older principle of the balance of power is still the best guide to the conduct of foreign policy. And in some parts of the world, such as the Middle East, it may still be necessary to impose peace by power—and back it up by “economic appeasement.”