The End of American Exceptionalism

I'm here today with Professor Jeffrey Sachs of Columbia University to talk about his new book. A New Foreign Policy: Beyond American Exceptionalism. Thanks for joining us, Jeff. - It's good to be with you. - In American foreign policy, we can feel every day the tremors of what is happening in China, the concerns about Europe, the problems with Russia. Why did you get into this water? As an economist, why is this important? - We find ourselves at a crossroads. In 1941, Henry Luz declared the American century. In 1992, when the Soviet Union collapsed, we were the colossus, the New Rome, the only superpower in the world.

And I'm arguing that it was a lot of excitement. The idea that there is a power that dominates the world, especially a country with 4.4% of the world's population that claims to lead the world, to be the superpower is very naive and very dangerous in my opinion. At its core, it is this word

exceptionalism

that has been repeated throughout American history that we are the exceptional country. That at this point I think makes us a danger to ourselves. We have ended up enormously overloaded. Military bases in more than 70 countries around the world, more than 700 bases worldwide. Wars that continue endlessly from Afghanistan.

Violence throughout the Middle East. Libya, all of our covert and drone operations in Africa, the Middle East and elsewhere. We are now a danger to ourselves by taking this idea of ​​

exceptionalism

in such an anachronistic way when it no longer applies. -Those bills for those wars that you just described do not end because the fighting has ceased. As Linda Bilmes wrote in an INET foreign investigative report, the story in terms of medical care for troops who have returned home and everything else, these are colossal expenses that we have borne. - I don't think we really feel, except through such wonderful studies, how much this imperial state has weighed on American society in the budget, of course, in the incredible medical costs that continue through the VA system.

In the number of crises we constantly endure in places where we should not be involved. In Syria, which was another of the debacles, the one in which Obama played a very important role. So my criticism is not just about Trump, but about American foreign policy and the American foreign policy of the establishment that has been in place for decades. It has become increasingly unrealistic and unbalanced because the share of the world economy, or of global finance, or of technology that the United States dominates, let's say, has decreased over time. We were once the economic colossus at the end of World War II.

We were the ones who had not been attacked in our territory except for one day, Pearl Harbor, and we were a military, technological and financial power, of course. But over time, other countries, other regions have developed, of course China is the most remarkable case of economic development that the world has ever seen. 1.4 billion people will escape poverty in a period of 40 years. And the reality of where we are today in the United States and where we still consider ourselves the indispensable country, or Trump's foreign policy doctrine that asserts American primacy in all regions of the world.

The military doctrine, not just under Trump, but for a long time, is that we should be able to successfully fight two major regional wars. Where does this imperial global thinking come from? Now Trump, on the surface, said, well, we should back off and they even called him an isolationist in some respects, but in reality, as confused as he is, so I can't understand it exactly, but as confusing as the Trump administration is that we continue with the basic idea that the United States must dominate, that we are the exceptional country. And again, as confused as the Trump administration and the president are, I'm not even going to get into that, as he understands it, but this new trade war with China is part of this story.

China is on the technological rise. China is reaching the forefront in absolutely key technologies, whether it's 5G and broadband artificial intelligence, the whole digital revolution. Phenomenal capabilities. I say well and good because that means these technologies are more widely available around the world to raise living standards and improve our lives. But from the point of view of American security in the exceptionalist mode, we have to stop that. The way Trump is trying to stop this is to scramble everything about international systems, start new trade wars and somehow try to subdue China. Ridiculous, impossible, self-destructive, misguided and missing all the important things of our time.

Can we understand the environmental crisis, can we work together with China to address absolutely global concerns about health and the environment, about migration and much of the turmoil in the world? No, we are so determined to maintain this primacy that we will do a lot of damage unless we reconsider this. - When you talk about this exceptionalism, it is like a kind of arrogance, where we can do no harm, it is a meaningless mentality, where we can often do a lot of harm outside the country, but within the country. We're not exactly prioritizing our spending or, how to put it, how we use our tax revenues for education, health, retirement and other things when we maintain these bases in 70 countries.

So it doesn't seem like we are doing anything that benefits the 4.5% of the population we referred to earlier, to the detriment of everyone else. It may be benefiting a very small percentage of our population to the detriment of many others and the dynamic evolution of health and education in this country. - I think if you take a step back, and especially if, you don't adopt an American mentality, but look at America. The most notable thing to me is that, as a society, we seem completely incapable right now of solving even one problem. We're just not solving anything.

We have a decreasing life expectancy in the United States. Incredibly, we have, of course, the opioid epidemic. We have a healthcare system that costs twice as much as any other healthcare system in the world. We are in perpetual war in the Middle East. We have the highest income inequality in American history right now. We have parts of our infrastructure that are falling apart. We know it has been falling apart for a long time. But lately, administration after administration, we have not been able to build a mile of fast rail. At best, we are patching, but not designing anything for the 21st century.

And you step back and say that's really a peculiar political system. Let's leave aside all debates about what kind of system, the United States Congress or the parliamentary system. Simply ask a question: can a society address real problems and act to solve them? And I would say the United States hasn't been able to do that for probably about 30 years. Where we identify the problem and nothing happens. Trump said, okay, I'm a builder, I'm going to build infrastructure. That was the last time we heard about it. It's not going to happen under this man's watch, be sure of that.

But I also have to say that President Obama made a lot of speeches about infrastructure. He failed to build even a kilometer of expressway in the United States. He did a stimulus in 2009, 2010 during the financial crisis a decade ago, but it was a blip. Spend more, spend less, end of story. Where was the structural change? Where were the long-term solutions? We don't have that and yet we are the number one country, we run the world, we now dictate through the international financial system. Sanctions on this, sanctions on that, you can't use the dollar, we will punish you if you go to the international criminal court, etc.

As if we were running the show globally. And okay, for a moment, when a bully talks like that, people in other countries recoil, but it's more like the cartoon character who ran off the cliff, doesn't realize it, thinks everything is fine, and then runs away. And that's really what this book says. We need a conceptual rethinking of where we are in a world where the American century, basically for reasons of the spread of knowledge, technology and capability around the world, means that we are not running the show. Where the spread of problems around the world means we better cooperate.

And we really need to rethink what our priorities are. We continue with the institutional priorities of this quasi-imperial state of ours, which overthrows governments or imposes sanctions or dictates to others what to do, but it is not going to work this way. - Earlier this year a group of European economists came to visit me and told me that the model we were supposed to follow to have vitality and growth was an American model. Deregulate, privatize and allow those who own the business to reallocate everything so that it is used more efficiently. And that Europeans have been accused of having sclerotic economies.

When they came to see me, they said they thought the American model was over. Because with the omnipresence of adjustment and the disruption of globalization and particularly automation. The American political system was stagnating and our president was a symptom of that. And if transitions are not facilitated in which people do not protect their jobs, but as individuals, their children's education, their health, their pension, their recycling, then the political system will collapse and the United States will be abandoned. behind the countries that can manage these transfers. So it's not purely Robin Hood, or the rich taking care of the poor out of charity.

This is the dynamism of the United States that is at stake in the contest between these two models for how to manage a dynamic economy. - One of the most ridiculous things we are subjected to in the United States is the endless stream of Wall Street Journal editorials warning us: let's not become like Europe. Especially not like Scandinavia. And they love publishing stories against Sweden and so on. If you get the chance, I would tell anyone watching, go to Stockholm, Oslo or Copenhagen. Take a look around and see the horrible crisis in these countries and the fact is, these are actually amazing places.

Unlike our infrastructure, escalators and elevators work, roads are quite beautiful, airports shine, confirming the idea of ​​environmentally friendly design. They are not falling apart, they are quite beautiful and enjoyable, and every worker enjoys five or six weeks of paid summer vacation as a right of every worker. So the starting point when we had that visiting delegation was that they were people who lived very, very comfortably. They live in societies that actually function functionally as integrated societies. Of course they have tensions. They have arguments about migration, about refugees, that's for sure. But these are places that are working, functioning, investing and, in fact, living in the 21st century.

Because they know the technologies of the future, they are targeting them and they are making changes. And what always impressed me about those countries is that they are really market-oriented. They are not socialist in the idea of ​​state ownership and so on, but exactly what you said, they take care of the people sensibly. Everyone receives healthcare, quality education, paid leave, vacations, etc. So as technologies improve, even in the face of all this global competition, the quality of life continues to improve and on a very broad basis. Now they are arguing, well, we want it for ourselves, we don't want to accept any more immigrants or refugees, etc.

That debate is understandable, but in reality the quality of life is exceptionally good in almost all areas. In the United States we are still a dynamic society because we are still able to implement new technologies, and it is fair to say that the United States invented the Internet, invented the new world of apps, and did many things. But we no longer take care of ourselves at all. The Republican Party, by the way, although I'm not particularly partisan, the Republican Party has one idea and one idea only. And that is shutting down the government, whether it's regulation, environmentalism or basic support for people's basic needs.

Cut taxes, and by the way, they're now cutting them regardless of the fact that we have a deficit of almost a trillion dollars a year, and now they want another round of tax cuts. Ok, we can head towards fiscal bankruptcy as fast as they want, but how blind. So that ideology, no, we don't have a society. No, we are the winners and damn the losers, it's not going to work. And then Trump comes along and says yeah, you're losing because of those guys, the Mexican rapists, the terrorists, the Chinese cheaters and all the rest, and then of course it's just another round of deflections and excuses, maybe deliberate, perhaps ignorant, but we lost the vocabulary of society coming together.

And if we don't have that, we're not going to stick together. - In my opinion, I look at the work that you have always done, but particularly in a book like this that takes a step forward, you are an excellentexample for my young students. You are addressing issues that are important, you are addressing issues with rigorous economics. You yourself have worked extensively in Africa and elsewhere, so your sensitivity to the challenges of our time is always one of your formidable talents. So I just want to thank you for being so thoughtful and setting a good example for our young scholars, and I hope you all read this book. - Well thank you very much. - Thank you for joining us. - Let me praise INET and you for keeping us fresh and focused on the future and really economics should be a problem-solving profession.

And it should be, I would like to think of Aristotelian economics, Aristotle is my favorite philosopher, that it should be a science for the common good. And I hope we continue in that tradition. - It's nice to see you practice what you preach. - Well thank you very much. - Thank you.