November 24, 2003

The Bubble of American Supremacy

If in this next year, we save this consitutional
Republic and by extension the planet itself from the
chaos and ruin toward which we are being shoved by the
stupdity of the Neo-Cons and the unbridled greed of
their sponsors, it will be in large part because of
this man...

George Soros: The war on terrorism as pursued by the Bush Administration cannot be won. On the contrary, it may bring about a permanent state of war. Terrorists will never disappear. They will continue to provide a pretext for the pursuit of American supremacy. That pursuit, in turn, will continue to generate resistance. Further, by turning the hunt for terrorists into a war, we are bound to create innocent victims. The more innocent victims there are, the greater the resentment and the better the chances that some victims will turn into perpetrators.

The Atlantic Monthly | December 2003

The Bubble of American Supremacy

A prominent financier argues that the heedless
assertion of American power in the world resembles a
financial bubble—and the moment of truth may be here

by George Soros


It is generally agreed that September 11, 2001,
changed the course of history. But we must ask
ourselves why that should be so. How could a single
event, even one involving 3,000 civilian casualties,
have such a far-reaching effect? The answer lies not
so much in the event itself as in the way the United
States, under the leadership of President George W.
Bush, responded to it.

Admittedly, the terrorist attack was historic in its
own right. Hijacking fully fueled airliners and using
them as suicide bombs was an audacious idea, and its
execution could not have been more spectacular. The
destruction of the Twin Towers of the World Trade
Center made a symbolic statement that reverberated
around the world, and the fact that people could watch
the event on their television sets endowed it with an
emotional impact that no terrorist act had ever
achieved before. The aim of terrorism is to terrorize,
and the attack of September 11 fully accomplished this

Even so, September 11 could not have changed the
course of history to the extent that it has if
President Bush had not responded to it the way he did.
He declared war on terrorism, and under that guise
implemented a radical foreign-policy agenda whose
underlying principles predated the tragedy. Those
principles can be summed up as follows: International
relations are relations of power, not law; power
prevails and law legitimizes what prevails. The United
States is unquestionably the dominant power in the
post-Cold War world; it is therefore in a position to
impose its views, interests, and values. The world
would benefit from adopting those values, because the
American model has demonstrated its superiority. The
Clinton and first Bush Administrations failed to use
the full potential of American power. This must be
corrected; the United States must find a way to assert
its supremacy in the world.

This foreign policy is part of a comprehensive
ideology customarily referred to as neoconservatism,
though I prefer to describe it as a crude form of
social Darwinism. I call it crude because it ignores
the role of cooperation in the survival of the
fittest, and puts all the emphasis on competition. In
economic matters the competition is between firms; in
international relations it is between states. In
economic matters social Darwinism takes the form of
market fundamentalism; in international relations it
is now leading to the pursuit of American supremacy.

Not all the members of the Bush Administration
subscribe to this ideology, but neoconservatives form
an influential group within it. They publicly called
for the invasion of Iraq as early as 1998. Their ideas
originated in the Cold War and were further elaborated
in the post-Cold War era. Before September 11 the
ideologues were hindered in implementing their
strategy by two considerations: George W. Bush did not
have a clear mandate (he became President by virtue of
a single vote in the Supreme Court), and America did
not have a clearly defined enemy that would have
justified a dramatic increase in military spending.

September 11 removed both obstacles. President Bush
declared war on terrorism, and the nation lined up
behind its President. Then the Bush Administration
proceeded to exploit the terrorist attack for its own
purposes. It fostered the fear that has gripped the
country in order to keep the nation united behind the
President, and it used the war on terrorism to execute
an agenda of American supremacy. That is how September
11 changed the course of history.

Exploiting an event to further an agenda is not in
itself reprehensible. It is the task of the President
to provide leadership, and it is only natural for
politicians to exploit or manipulate events so as to
promote their policies. The cause for concern lies in
the policies that Bush is promoting, and in the way he
is going about imposing them on the United States and
the world. He is leading us in a very dangerous

he supremacist ideology of the Bush Administration
stands in opposition to the principles of an open
society, which recognize that people have different
views and that nobody is in possession of the ultimate
truth. The supremacist ideology postulates that just
because we are stronger than others, we know better
and have right on our side. The very first sentence of
the September 2002 National Security Strategy (the
President's annual laying out to Congress of the
country's security objectives) reads, "The great
struggles of the twentieth century between liberty and
totalitarianism ended with a decisive victory for the
forces of freedom—and a single sustainable model for
national success: freedom, democracy, and free

The assumptions behind this statement are false on two
counts. First, there is no single sustainable model
for national success. Second, the American model,
which has indeed been successful, is not available to
others, because our success depends greatly on our
dominant position at the center of the global
capitalist system, and we are not willing to yield it.

The Bush doctrine, first enunciated in a presidential
speech at West Point in June of 2002, and incorporated
into the National Security Strategy three months
later, is built on two pillars: the United States will
do everything in its power to maintain its
unquestioned military supremacy; and the United States
arrogates the right to pre-emptive action. In effect,
the doctrine establishes two classes of sovereignty:
the sovereignty of the United States, which takes
precedence over international treaties and
obligations; and the sovereignty of all other states,
which is subject to the will of the United States.
This is reminiscent of George Orwell's Animal Farm:
all animals are equal, but some animals are more equal
than others.

To be sure, the Bush doctrine is not stated so
starkly; it is shrouded in doublespeak. The
doublespeak is needed because of the contradiction
between the Bush Administration's concept of freedom
and democracy and the actual principles and
requirements of freedom and democracy. Talk of
spreading democracy looms large in the National
Security Strategy. But when President Bush says, as he
does frequently, that freedom will prevail, he means
that America will prevail. In a free and open society,
people are supposed to decide for themselves what they
mean by freedom and democracy, and not simply follow
America's lead. The contradiction is especially
apparent in the case of Iraq, and the occupation of
Iraq has brought the issue home. We came as
liberators, bringing freedom and democracy, but that
is not how we are perceived by a large part of the

It is ironic that the government of the most
successful open society in the world should have
fallen into the hands of people who ignore the first
principles of open society. At home Attorney General
John Ashcroft has used the war on terrorism to curtail
civil liberties. Abroad the United States is trying to
impose its views and interests through the use of
military force. The invasion of Iraq was the first
practical application of the Bush doctrine, and it has
turned out to be counterproductive. A chasm has opened
between America and the rest of the world.

The size of the chasm is impressive. On September 12,
2001, a special meeting of the North Atlantic Council
invoked Article 5 of the NATO Treaty for the first
time in the alliance's history, calling on all member
states to treat the terrorist attack on the United
States as an attack upon their own soil. The United
Nations promptly endorsed punitive U.S. action against
al-Qaeda in Afghanistan. A little more than a year
later the United States could not secure a UN
resolution to endorse the invasion of Iraq. Gerhard
Schröder won re-election in Germany by refusing to
cooperate with the United States. In South Korea an
underdog candidate was elected to the presidency
because he was considered the least friendly to the
United States; many South Koreans regard the United
States as a greater danger to their security than
North Korea. A large majority throughout the world
opposed the war on Iraq.

eptember 11 introduced a discontinuity into American
foreign policy. Violations of American standards of
behavior that would have been considered objectionable
in ordinary times became accepted as appropriate to
the circumstances. The abnormal, the radical, and the
extreme have been redefined as normal. The advocates
of continuity have been pursuing a rearguard action
ever since.

To explain the significance of the transition, I
should like to draw on my experience in the financial
markets. Stock markets often give rise to a boom-bust
process, or bubble. Bubbles do not grow out of thin
air. They have a basis in reality—but reality as
distorted by a misconception. Under normal conditions
misconceptions are self-correcting, and the markets
tend toward some kind of equilibrium. Occasionally, a
misconception is reinforced by a trend prevailing in
reality, and that is when a boom-bust process gets
under way. Eventually the gap between reality and its
false interpretation becomes unsustainable, and the
bubble bursts.

Exactly when the boom-bust process enters
far-from-equilibrium territory can be established only
in retrospect. During the self-reinforcing phase
participants are under the spell of the prevailing
bias. Events seem to confirm their beliefs,
strengthening their misconceptions. This widens the
gap and sets the stage for a moment of truth and an
eventual reversal. When that reversal comes, it is
liable to have devastating consequences. This course
of events seems to have an inexorable quality, but a
boom-bust process can be aborted at any stage, and the
adverse effects can be reduced or avoided altogether.
Few bubbles reach the extremes of the
information-technology boom that ended in 2000. The
sooner the process is aborted, the better.

The quest for American supremacy qualifies as a
bubble. The dominant position the United States
occupies in the world is the element of reality that
is being distorted. The proposition that the United
States will be better off if it uses its position to
impose its values and interests everywhere is the
misconception. It is exactly by not abusing its power
that America attained its current position.

Where are we in this boom-bust process? The
deteriorating situation in Iraq is either the moment
of truth or a test that, if it is successfully
overcome, will only reinforce the trend.

Whatever the justification for removing Saddam
Hussein, there can be no doubt that we invaded Iraq on
false pretenses. Wittingly or unwittingly, President
Bush deceived the American public and Congress and
rode roughshod over the opinions of our allies. The
gap between the Administration's expectations and the
actual state of affairs could not be wider. It is
difficult to think of a recent military operation that
has gone so wrong. Our soldiers have been forced to do
police duty in combat gear, and they continue to be
killed. We have put at risk not only our soldiers'
lives but the combat effectiveness of our armed
forces. Their morale is impaired, and we are no longer
in a position to properly project our power. Yet there
are more places than ever before where we might have
legitimate need to project that power. North Korea is
openly building nuclear weapons, and Iran is
clandestinely doing so. The Taliban is regrouping in
Afghanistan. The costs of occupation and the prospect
of permanent war are weighing heavily on our economy,
and we are failing to address many festering
problems—domestic and global. If we ever needed proof
that the dream of American supremacy is misconceived,
the occupation of Iraq has provided it. If we fail to
heed the evidence, we will have to pay a heavier price
in the future.

eanwhile, largely as a result of our preoccupation
with supremacy, something has gone fundamentally wrong
with the war on terrorism. Indeed, war is a false
metaphor in this context. Terrorists do pose a threat
to our national and personal security, and we must
protect ourselves. Many of the measures we have taken
are necessary and proper. It can even be argued that
not enough has been done to prevent future attacks.
But the war being waged has little to do with ending
terrorism or enhancing homeland security; on the
contrary, it endangers our security by engendering a
vicious circle of escalating violence.

The terrorist attack on the United States could have
been treated as a crime against humanity rather than
an act of war. Treating it as a crime would have been
more appropriate. Crimes require police work, not
military action. Protection against terrorism requires
precautionary measures, awareness, and intelligence
gathering—all of which ultimately depend on the
support of the populations among which the terrorists
operate. Imagine for a moment that September 11 had
been treated as a crime. We would not have invaded
Iraq, and we would not have our military struggling to
perform police work and getting shot at.

Declaring war on terrorism better suited the purposes
of the Bush Administration, because it invoked
military might; but this is the wrong way to deal with
the problem. Military action requires an identifiable
target, preferably a state. As a result the war on
terrorism has been directed primarily against states
harboring terrorists. Yet terrorists are by definition
non-state actors, even if they are often sponsored by

The war on terrorism as pursued by the Bush
Administration cannot be won. On the contrary, it may
bring about a permanent state of war. Terrorists will
never disappear. They will continue to provide a
pretext for the pursuit of American supremacy. That
pursuit, in turn, will continue to generate
resistance. Further, by turning the hunt for
terrorists into a war, we are bound to create innocent
victims. The more innocent victims there are, the
greater the resentment and the better the chances that
some victims will turn into perpetrators.

The terrorist threat must be seen in proper
perspective. Terrorism is not new. It was an important
factor in nineteenth-century Russia, and it had a
great influence on the character of the czarist
regime, enhancing the importance of secret police and
justifying authoritarianism. More recently several
European countries—Italy, Germany, Great Britain—had
to contend with terrorist gangs, and it took those
countries a decade or more to root them out. But those
countries did not live under the spell of terrorism
during all that time. Granted, using hijacked planes
for suicide attacks is something new, and so is the
prospect of terrorists with weapons of mass
destruction. To come to terms with these threats will
take some adjustment; but the threats cannot be
allowed to dominate our existence. Exaggerating them
will only make them worse. The most powerful country
on earth cannot afford to be consumed by fear. To make
the war on terrorism the centerpiece of our national
strategy is an abdication of our responsibility as the
leading nation in the world. Moreover, by allowing
terrorism to become our principal preoccupation, we
are playing into the terrorists' hands. They are
setting our priorities.

recent Council on Foreign Relations publication
sketches out three alternative national-security
strategies. The first calls for the pursuit of
American supremacy through the Bush doctrine of
pre-emptive military action. It is advocated by
neoconservatives. The second seeks the continuation of
our earlier policy of deterrence and containment. It
is advocated by Colin Powell and other moderates, who
may be associated with either political party. The
third would have the United States lead a cooperative
effort to improve the world by engaging in preventive
actions of a constructive character. It is not
advocated by any group of significance, although
President Bush pays lip service to it. That is the
policy I stand for.

The evidence shows the first option to be extremely
dangerous, and I believe that the second is no longer
practical. The Bush Administration has done too much
damage to our standing in the world to permit a return
to the status quo. Moreover, the policies pursued
before September 11 were clearly inadequate for
dealing with the problems of globalization. Those
problems require collective action. The United States
is uniquely positioned to lead the effort. We cannot
just do anything we want, as the Iraqi situation
demonstrates, but nothing much can be done in the way
of international cooperation without the leadership—or
at least the participation—of the United States.

Globalization has rendered the world increasingly
interdependent, but international politics is still
based on the sovereignty of states. What goes on
within individual states can be of vital interest to
the rest of the world, but the principle of
sovereignty militates against interfering in their
internal affairs. How to deal with failed states and
oppressive, corrupt, and inept regimes? How to get rid
of the likes of Saddam? There are too many such
regimes to wage war against every one. This is the
great unresolved problem confronting us today.

I propose replacing the Bush doctrine of pre-emptive
military action with preventive action of a
constructive and affirmative nature. Increased foreign
aid or better and fairer trade rules, for example,
would not violate the sovereignty of the recipients.
Military action should remain a last resort. The
United States is currently preoccupied with issues of
security, and rightly so. But the framework within
which to think about security is collective security.
Neither nuclear proliferation nor international
terrorism can be successfully addressed without
international cooperation. The world is looking to us
for leadership. We have provided it in the past; the
main reason why anti-American feelings are so strong
in the world today is that we are not providing it in
the present.

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Posted by richard at November 24, 2003 09:07 AM