Iraq, France And The World Order

My recent personal piece about The Teen Age Of Old Europe elicited a greater volume of mail than usual. Two things intrigued me about these responses.

First, where I expected at least some incoherent statements of extremist views, I mostly received tactful, articulate comments – either about my analysis proper or about the greater subject of political relations between traditional allies in the West. Second, I expected the piece to antagonize French readers much more than American ones. Instead, outside of a couple of unconditional friends, the French were noticeably silent, whereas American readers perceived my comments as a defense of France’s position toward the war on Iraq, which it emphatically was not.

Most writers were sympathetic to my “predicament” as a French-born American. But, in fact, I really face no predicament, mostly because both countries, even with their shortfalls, are democracies where free speech reigns. I am critical of some aspects of both French and American foreign policies, of course, and this satisfies my predilection for belonging to the minority wherever I am (my contrarian bent). As Prof. Justin Vaisse observed in an excellent editorial for the Financial Times, I have come to accept that it is “part of my transatlantic identity to defend America in Paris and Europe here”.

It is understandable that Americans find it difficult to forgive the French for the “bullet in the back” that France’s recent policy stance constitutes – especially as Messrs. Chirac and Villepin seem to enjoy so much firing this bullet. Yet, and in spite of the denials by several readers that there exists any American complex toward the French, it is noticeable that there has been no popular resentment of Germany – even though that country’s opposition to American policy toward Iraq has been just as immediate, just as vocal and just as rigid as France’s. But in the end, France’s stand is relatively insignificant. To quote Josef Joffe, editor of Die Zeit, in the latest issue of The National Interest, France has long been “an Economy power that tries to fly Business”.

What is much more significant for the long term is the attitude of America toward the end of bipolarity, which “has been dying a slow death since 1991, when the Soviet Union committed suicide by dissolution” (again loosely quoting Joffe). In the last decade, the United States has become so powerful, both economically and militarily, as to establish a new unipolarity where it stood clearly above the rest of the world, “needing merely assistants, not allies”. This was recently evidenced by Secretary of Defense Donald Rumsfeld’s statement that the mission determines the coalition and not the other way around. Clearly, there was no doubt in his mind as to who determines the mission.

For other nations, much less powerful, the only hope of having a voice in world affairs is to work toward building a new multipolar system, where great global orientations will be determined by international consultation and consensus building, rather than by the dictate of an unopposed power, no matter how benevolent. The Iraq situation presented a timely opportunity to press that agenda and, typically, France was quick to seize center stage. But, irritating as the attitude of the French political class and media may be, the truly important development for world peace, prosperity and stability will be how the United States negotiates this unavoidable transition.

Arguably, the Iraq incident will have weakened, possibly even made obsolete, today’s international institutions, from the United Nations, to NATO, the International Monetary Fund, the World Bank and the World Trade Organization. All had gained a degree of credibility under the trend of globalization of the past decade or so. Despite the hodge-podge protests that have marred the meetings of such organizations in the last few years, globalization arguably has been a force of growth and progress for the world economy, and its benefits have been widely shared by countries of all sizes and at most stages of development. And, like it or not, it also has been an American achievement.

As America’s “hegemony” recedes in coming years, willingly or not, for better or for worse, a void will necessarily be created. I am not very optimistic that international organizations can quickly or efficiently fill that gap. Certainly, Europe’s political failures in the former Yugoslavia or the iron collar its new bureaucracies have imposed on the region’s economies are no encouragement in that respect.

But as investors, and particularly as contrarian investors, we need to remain aware of major undercurrents that promise to change the economic patterns to which we have become accustomed. While France’s posturing is an understandable irritant for American politicians and voters, the real question is: how will America manage the unavoidable transition to multilateralism? Will it lead it or resist it? How deep or long will be the resulting power vacuum, if any? It is not too early to ask these questions.

François Sicart

March 24, 2003
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