We are coming up on November 9 to the 25th anniversary of the fall of the Berlin Wall, and the post-Cold War era has not lived up to our hopes. Tokyo and Beijing are rattling their sabers, Russia is on the march in Ukraine as Russian agents spew disinformation around the world once again, Europe is a mess, Africa has Ebola, and the Middle East is aflame.
It’s natural to blame President Obama and his Western colleagues for the current mess, and those who don’t blame the current crop of officeholders often look to blame George W. Bush. It’s true that both Presidents—and their colleagues in Europe and elsewhere—have had their share and perhaps in some cases more than their share of lapses. But the sad truth is that many of our biggest problems were already festering by the time George W. Bush took the oath of office back in January 2001.
The financial crash, the euro crash, and the Rogue Russia syndrome all happened well after 2001, but the seeds of these catastrophes were planted not by George W. Bush or Barack Obama; they were planted by Bill Clinton, Helmut Kohl and Francois Mitterrand and their aides and associates back in the 1990s. It was back then that the fall of the Soviet Union created one of history’s great opportunities, and it was then that a lost generation of Western leaders threw it away.
This isn’t the first time the West has lost a hard-won peace. The 1919 treaty that ended World War I and was supposed to ring in the age of permanent peace was signed in the Hall of Mirrors in the palace of Versailles. History was over, the Western establishments thought, and with it the necessity of heavy lifting in world affairs. Everything was going to be for the best in this best of all possible worlds, and with only a very little effort on anyone’s part, a global utopia of free governments and free markets would rise on every side.
Shaken and horrified by the ordeal of World War II, the West vowed to do better the second time around and, mostly, it did. But by 1990 the West had grown overconfident, and a careless and shortsighted approach to the problems of global order led us gradually back into trouble.
The illusions are beginning to clear away now. President Obama confronts the ashes of his dreams; Japan stares out at the specter of a rising and hostile China; the Arab Spring has ended in blood; Europe contemplates the deepening crisis of its post-1989 order and the decline of its international weight. Worse is likely to come.
Three big mistakes in the 1990s set the world on a downhill course: under Bill Clinton the Americans sabotaged the world’s financial system; under Helmut Kohl and Francois Mitterrand the Europeans took the fatal decisions that brought on the euro disaster; and everybody got Russia wrong. These were not the only bad decisions taken then, and more have been taken since, but these three set the stage for much of our current trouble; all three were extremely consequential and completely avoidable. Future generations will not look kindly on the politicians and policymakers responsible.
In America, the deregulation of the financial system was whooped through with a minimum of care or attention. Finance is a necessary and powerful tool, but it is also a dangerous one. Financial history is filled with examples of bubbles and crashes going back to the Dutch tulip craze. It was already clear in 1990 that the world’s financial system was becoming more volatile. A thoughtful, careful approach to deregulation that took the long history of financial crises into account, that weighed and weighted the potential risks with due care, and then proceeded cautiously and deliberately towards a reasonable goal would have yielded much better results than the reckless course we chose. But the combination of technocrats and Wall Street promoters that the Clinton administration empowered (with support from Republicans in Congress) rammed through a set of changes that made the most damaging economic crisis since the 1930s inevitable.
The result, which came after the Bush administration failed to reverse the Clinton errors while adding a few of its own, wasn’t just a recession. There was a massive global loss of confidence in the capitalist system and in America’s ability to lead it. Chinese leaders concluded that their hour had struck and that the scepter of global power was slipping from Washington’s palsied hands. Coming on top of the Bush administration’s bungling of the Iraq situation, the financial crisis left much of the world convinced that the Americans no longer had the smarts, the self discipline, the focus or the money to maintain a stable world order.
If the Americans managed their economy carelessly, the Europeans were worse. The euro is the single most devastating policy failure by western statesmen since Daladier and Chamberlain decided to appease Adolf Hitler. It was, as they say in tennis, an unforced error. There was no need for the euro, and even if there had been, there was no need to move so quickly and so carelessly down such a dangerous path. None of that fazed Europe’s officeholders at the time; the euro looked pretty and offered some short-term benefits, and that was enough to induce a fatally shortsighted cohort of leaders to take a series of blindingly stupid moves that have crippled Europe, divided it, and condemned millions of young people across a third of the continent to lives without work or, for many, hope.
Again, the consequences are far reaching. Turkey no longer thinks of Europe as a model. Russia has turned its back. Europe has neither the financial nor the political resources to engage in a serious regional policy. Wars rage to its east and southeast; these wars bear directly on vital European interests, and a diminished and introspective Europe has little or no influence over their course. Globally, the issues Europe cares most about—climate change, human rights, the development of international institutions—are all moving backward, and Europe is almost irrelevant in the discussion. Europe’s much hoped for economic recovery keeps receding in time, populist parties gain ground in key member states, and the bonds of cooperation between its most important members continue to fray.
And then there is Russia policy, a policy that future historians will consider as stupid and as self defeating—if, hopefully, not as ruinous—as the policies the victorious allies pursued toward Germany between the two world wars.
The West behaved with folly and blindness toward Russia. After the communist flame-out, when a stunned and staggered Russia was open to advice, the policy prescriptions we offered were poorly thought through and ill-adapted to a very complex Russian reality. The aid we offered was ill-adapted to Russia’s real needs and never close to the necessary level. We helped the oligarchs loot the country, readily converting the Western banking system into history’s greatest money laundry to help a nasty gang of thieves rob the country blind. We supported the drunken and shambolic Yeltsin government as long as it gave us what we wanted, and what we wanted from it was trivial and ultimately worthless. We never grappled with the human realities left behind by Communism’s fall and we offered no serious or worthy paths forward around which pro-Western sentiment in Russia could build serious political movements. The West had two projects in mind for Europe: NATO and the EU. Both operate under the motto: No Russians Need Apply. From the Wars of the Yugoslav Succession to the current Russian attack on Ukraine, Western policy has had the effect of irritating Russian pride, inflaming Russian fears, and exciting Russian contempt. The West is not responsible for everything that goes wrong with Russia, but from the presidency of George H. W. Bush through that of Barack Obama, blind folly has been the dominating element of the American and European approach to this country. Had Western policy been smarter, less ideologically driven and above all more serious, neither President Putin nor the country he leads would be where they currently are.
To analyze the West’s failures is not to claim that everything has gone wrong, and more especially, it does not mean that either globalization or capitalism are failures. Poverty has continued to diminish around the world; at no time in history have so many human beings emerged from absolute poverty or gained access to literacy, enhanced food security and basic health care. The lost generation wasn’t wrong that liberal capitalism and technological progress are humanity’s best hopes for a better future. The lost generation didn’t pick the wrong direction: it underestimated the difficulties of the journey and set merrily off for a hike through the mountains without food, without a first aid kit, without warm clothing and without checking the weather forecast.
Obama, Merkel, Cameron and Hollande have made plenty of mistakes on their own; words like “Libya” and “Syria” come to mind. But the rip currents through which they must swim are not entirely of their making. They, and we, are reaping the consequences of bad decisions taken two decades ago, when the skies were still bright and the world was full of hope. For a quarter century now, Western policymakers have assumed that history held no more great challenges on the scale of the colossal crises of the 20th century. They have acted as if we had reached some kind of post-historical utopia, and as if our security and prosperity had become so absolute and so embedded that we no longer needed to concern ourselves with the foundations of the world order.
This was foolishly and tragically wrong. We are not yet back in the worst of the bad old days. We have passed from the late 1920s to the early 1930s. A shadow is stirring in Mirkwood, the orcs are roaming the forests, but the Dark Lord hasn’t returned to his Tower. The historical clock that seemed to slow in the 1990s is ticking faster now. We can no longer afford to live carelessly and large. The days are getting darker, and if we are to avoid a repeat of the horrors of the last century, there is no time to waste and little to spare.