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The American Problem

Published online by Cambridge University Press:  28 September 2012

David P. Calleo
David P. Calleo
Affiliation:
DAVID CALLEO is Dean Acheson Professor and Director of European Studies at Johns Hopkins School of Advanced International Studies (SAIS) and author of Beyond American Hegemony (New York: Basic Books, 1987).
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Abstract

While the world enjoys a post-WWII Pax Americana, American foreign policy faces a curious dilemma: how to adjust to its own success in the ever-changing political climate. According to Calleo, the United States “has been driven to manipulate its finances in a fashion that increasingly harms the American economy and threatens the liberal world economy.” Placing little confidence in the endurance of NATO in the post-cold-war era, the author urges the United States to “become the ally of its allies rather than their managing protector,” as it has been historically, leaving Europe to take responsibility for its own security. Calleo argues that American and European interests can only grow more divergent with time; hence “the best antidote to European free-riding is American devolution.”

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Type
Articles
Information
Ethics & International Affairs , Volume 3 , March 1989 , pp. 219 - 244
Copyright
© Carnegie Council for Ethics in International Affairs 1989

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References

1 On GNP per capita and average annual GNP per capita growth rates, see The Bank, World, World Development Report 1988 (New York: Oxford University Press, 1988) p. 223CrossRefGoogle Scholar.

2 International Financial Statistics Yearbook: 1986 (Washington, D.C.: International Monetary Fund, 1986) pp. 120–21Google Scholar.

3 Calculated from Statistical Abstract of the United States: 1988 (Washington, D.C.: U.S. Department of Commerce, 1988) p. 407Google Scholar; and Historical Statistics of the United States, Part II (Washington, D.C.: U.S. Department of Commerce, 1976) p. 224Google Scholar.

4 The leader has been Japan, whose annual growth has averaged 4.3 percent since 1970, compared to a rate of 2.8 percent for the U.S., 2.8 percent for West Germany, and 2.6 percent for France. Calculated fromInternational Financial Statistics Yearbook: 1988, pp. 164–65Google Scholar.

5 The Central Intelligence Agency estimates Soviet 1987 gross national product at $2,375 billion; see Handbook of Economic Statistics (Washington, D.C.: Central Intelligence Agency, 1988) p. 31Google Scholar. For the same year Japan's GNP was reported as $2,792.6 billion, the European Community's combined GNP totaled $4,690.8 billion, and U.S. GNP stood at $4,488.6 billion. International Financial Statistics Yearbook: 1988, pp. 164–65.

6 In 1969 one dollar was worth 3.9 deutschemarks. In 1980 one dollar was worth DM1.83; in 1984, DM2.845; and by late 1987 the American unit had fallen to a record low of DM1.59. OECD Economic Outlook, Historical Statistics: 1986 (Washington, D.C.: U.S. Department of Commerce, 1985) p. 504Google Scholar.

7 For my extended presentation of this argument, see Calleo, David P., Beyond American Hegemony: The Future of the Western Alliance (New York: Basic Books, 1987)Google Scholar.

8 On the cyclical nature of U.S. defense spending and American Soviet policy, see ibid., pp. 27–81Google Scholar.

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12 Ibid.Google Scholar

13 In the summer of 1984, a confidential Defense Department report estimated “the total cost of European-deployed United States forces and all of the United States-based forces that we have pledged to contribute as NATO reinforcements over the course of a conflict” to total roughly $180 billion, or 58 percent of the Reagan administration's fiscal year 1985 Defense Department budget request. See Richard Halloran, “Europe Called Main U.S. Arms Cost,”The New York Times, July 20, 1984. In 1985, Earl Ravenal offered a more conservative estimate of $134 billion for the cost of U.S. general-purpose forces committed to NATO, closer to 45 percent of 1985 U.S. defense spending. Earl C. Ravenal, “Europe Without America: The Erosion of NATO,”Foreign Affairs, Vol. 63, No. 5 (Summer 1985). The magnitude of American NATO expenses is, at any rate, very largeGoogle Scholar.

14 Calculated from The Military Balance: 1988–89, p. 17Google Scholar.

15 In 1984, French defense spending totaled $20.2 billion; in 1987, it was $34.5 billion. West Germany spent $25.6 billion on its armed forces in 1984, and $34.2 billion in 1987. The U.K. spent $23.4 billion in 1984 and $31.8 billion in 1987. Figures are in current U.S. dollars, with exchange-rate fluctuations thus distorting year-by-year comparisons. The Military Balance: 1988–89, p. 224Google Scholar.

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25 Ibid.Google Scholar

26 Savings as a percentage of GNP—1986

Source: Historical Stattitics: 1960–86 (Paris: Organization for Economic Cooperation and Development, 1988) p. 14Google Scholar.

27 Toll of the Twin Deficits (New York: Committee for Economic Development, 1987) p. 87Google Scholar.

28 For a more detailed discussion of the implications of these policies, See Calleo, David P., van Cleveland, Harold B., and Silk, Leonard, “The Dollar and the Defense of the West,” Foreign Affairs, Vol. 66, No. 4 (Spring 1988)CrossRefGoogle Scholar.

29 See Strange, Susan, Casino Capitalism (Oxford: Basil Blackwell, 1986)Google Scholar.

30 See note 33Google Scholar.

31 Government Civilian Outlays as a Percentage of GDP

Calculated from OECD Historical Statistics: 1960–86, p. 64; and The Militq Balance: 1988–89, p. 224Google Scholar.

32 On the French nuclear buildup, See Laird, Robbin F., “French Nuclear Forces in the 1980s and the 1990s,” Comparative Strategy, Vol. 4, No. 4, pp. 387–412CrossRefGoogle Scholar. For details of the British upgrading and plans to purchase the American Trident missile, see Secretary of State for Defence (Britain), Statement on the Defense Estimates: 1985, No. 1 (London: Her Majesty's Stationery Office, 1985) pp. 19–21Google Scholar.

33 A precise calculation of the potential savings is, of course, difficult. However, the magnitude is clearly large. In my The Imperious Economy (Cambridge: Harvard University Press, 1982) p. 257Google Scholar, I used a rather conservative estimate arrived at with congressional analysts who, in the spring of 1981, saw rough savings within three years of $4.6 billion for each NATO division disbanded, without any cuts in U.S.-NATO naval or tactical air forces. (U.S. military spending in 1982 was $185.3 billion.) In 1984, Earl Ravenal calculated the cost of an average army division at closer to $5 billion. Ravenal, Earl C., Defining Defense: The 1985 Military Budget (Washington, B.C.: Cato Institute, 1984) p. 16Google Scholar.

34 Hart, B. H. Liddell, History of the First World War (London: Cassell and Company, 1970) pp. 55–56Google Scholar.

35 Kissinger, Henry A., “A Plan to Reshape NATO,”Time (March 5, 1984) pp. 20–24Google Scholar. Helmut Schmidt made his proposal in A Grand Strategy for the West: The Anachronism of National Strategies in an Interdependent World (New Haven: Yale University Press, 1985) p. 42Google Scholar.

36 For Gorbachev's December 1988 promise to remove 5,000 Soviet tanks and six Soviet tank divisions from Central Europe, see The New York Times, December 8, 1988Google Scholar.