To introduce our next speaker Hoover senior fellow Stephen Krasner. Steve is also a professor of International Relations at Stanford as well as the senior fellow at the Freeman-Spogli institute. From 2004 to 2006 Steve served as director of policy and planning at the US state department. He is the holder of PhD in political science from Harvard. He is the fellow of the American academy of arts and sciences and his research interest include market failure and distributional conflict in international political economy as well as the historical practices of sovereignty. He is a member of the task force on national security and law at Hoover and may join other task forces as well. Steve's topic this morning is titled 'Failed States and American National Security'. So please welcome Steve Krasner. Thanks for that very nice introduction, you know one of my goals in life for those of you that were here yesterday is to get as many titles as Dave Brady has. I am still working on and haven't succeeded yet on becoming a lower pessimistic but I figure I have a couple of years to go. I know that - I do know that, I have known that for a long time, the quote in front of you, let me read it "In the world today the fundamental character of regimes matters as much as the distribution of power among them the goal of our state craft is to help create a world of democratic well governed states that can meet the needs of their citizens and conduct themselves responsibly in the international system. This is the best way to provide enduring security for the American people" this is a quote from the national security strategy of 2006 the less famous of the two Bush national security strategies - not the preemption prevention national security strategy but the one that followed it. I think this is an objective which is unassailable and it's an idea which we all ought to aspire to. The major challenge of American foreign policy now and I think in the foreseeable future will be how do we get from here to there and all of the ambiguity, uncertainty debate that we have had I think has been related not to what the ultimate goal of our policy should be but rather to how we actually implement that policy. Yesterday when Daniel Alfredsson spoke, he basically said "prevention was wrong and we ought to go to a policy of retaliation" point of the message of the talk I am going to give today is that retaliation is not enough. And if you - I want to start this discussion at a kind of stratospheric level, discuss the nature of the international system as it's coming to being at the beginning of the 21st century and end the discussion at a much more specific level in terms of what the united states government needs to do not only with regard to its thinking about what its foreign policy ought to be but how it ought to organize itself. So this begin sort of a 50,000 feet and end someplace inside the beltway. If you look at that contemporary global system, one way of thinking about it is this and this is from a kind of - a mapping out that was developed by Robert Cooper who is the chief foreign policy advisor of Solana, who is basically the European Union foreign minister. There are really three kinds of states in the contemporary environment. There are set of states which Robert Cooper called the modern world about 85 countries, there are 30 plus countries that he called the post modern world and there are something like 37 to 73 countries which Cooper referred to as a pre-modern world. What's the distinction here? The modern world, the set of 85 countries that are about 200 countries altogether are basically states that we can think of as conventional sovereigns, these are states that are internationally recognized in the international system, there are states that effectively govern more or less within their own domestic boundaries and there are states that are autonomists, they have what is conventionally what lawyers would refer to as Westphalian sovereignty. They are states which are autonomists, they are not beholden to any external actors. The United States is the prime example of a conventionally sovereign modern state it's certainly got its own sovereign prerogatives, it's leading accurate in the international environment and it's actually willing to engage on kind of transgressing on the sovereign prerogatives of other states, when it sees it as being in its interest to do so. It's not the only state like this so obviously China has been very explicit about the prerogatives of sovereignty has made nine intervention in the internal affairs of other states, one of the - now one of the but the kind of tag line of its foreign policy - is very explicit about not having other states inference on China's prerogatives. Russia is certainly under Putin retaining to a kind of conventionalist conventionally modern state sovereigntist perspective in which - there Putin is trying to assert Russia's power as a great power, Putin is limiting the role of NGOs that pass the - modernly constraining NGO law in Russia last year on trying to constrain the impact which external actors might have within Russia but this notion conventionally modern states would also apply to Brazil, to India, to south Africa, to the States, the other states of Latin America and the Caribbean who are always kind of anxious about the intrusions of the united States. So there is a big world of conventionally modern states out there, the way in which we basically thought about how states should be in the international environment. There are states that govern effectively, that are internationally recognized and that are autonomists. There is a second set of states post modern which which Robert cooper called the post modern world. Most of these states are members of the European union and what we need to recognize about these states is that the European union is a new new thing in the international system, is a different kind of organizational environment than anything that we have seen before. It is not a federal state there are big areas of activity which member states of the European Union still control themselves. So it's not like the united states when the federal government passes a law, it applies to all of the states in the united states, note that we fought a civil war over this issue, so it wasn't a foregoing conclusion, and that's not true in the European union, there are big pieces of activity which were still under the preview of each member state. The European Union that was also not a conventional international organization which states joins and may decide not to join. It's something different which right now we don't even have a name for, it's characterized by two things which critically distinguish it from anything that we have seen before. One is the creation of super national institutions which have prerogatives which dominate in some specific issue areas, the national political institutions. The European court of justice which was set up when the European Union was founded has supremacy - its rulings have supremacy and direct effect. What that means is that its rulings have supremacy over national court rulings and they have direct effect in the judicial systems of every every member state of the EU and for those of you that - took governmental political science long ago and use to talk about Britain and parliamentary supremacy, in which the parliament was supreme in Britain and made the laws that is no longer true. A ruling of the European court of justice trumps decisions or can over turn decisions that are made by the European parliament, now that would be as if there was some international court that could trump decisions that were made by or the Supreme Court in the United States or the American congress. So this is a really big time radical change. Secondly the most obvious in terms of super national institutions although there are a number of others is the European monitory system, the European central bank. Most of the member states of the European Union are now members of the European monitory system, there is a European central bank which is in Frankfort or the board of governors at the bank is appointed by a complicated formula but these guys are there for a long period of time. They are relatively independent and they set monitory policy for Europe, I mean that is why we have the Euro now. So an area of - which is always being for a sovereign state under the control of individual states that is monitory policy is now for most members of the European Union under the control of the European monitory system. In addition to these super national institutions, there are also a very large number of issues trade issues most notably in the European Union that are decided by qualified majority voting of the members states or by a complicated formula that involves population weights as well as just giving each member of the European union one vote. So that trade issues and trade policy for the European union is done collectively for the European union, individual states do not negotiate separately in the WTO and the policies that they are choosing are the determined by qualified majority voting, so they can't be member states of the European Union which in the area of trade are more obligated to obey policies which they themselves might disagree with. This is absolute invariants with our conventional notions of what sovereignty means, so here you have a situation in Europe where the states of Europe are not autonomists. They have used their international legal sovereignty, there ability to sign treaties in contracts to basically give up their Westphalian sovereignty that are in this sense, they are fundamentally and absolutely different now than modern states and The United States China, Russia, Brazil. We also have situations in which they are obligated by qualified majority voting in some issue areas to obey rulings which they themselves disagree with which is a fundamental departure from conventional notions of sovereignty. The conventional notion of sovereignty is that a state for international lawyers, a state can enter in to any contract they wants but if it doesn't enter into that contract it's not obligated, in the case of the European union the member states of the European union have agreed with regard to certain policies to obey decisions which they themselves might disagree with And so EU is a really new new thing in the international system. Let me say it quickly, I do not think that the EU is going to be replicated in other parts of the world. The European union and its unique success and it has been an extraordinary success depended critically at the outset on two things, one was a support of the united states, the united states after the second world war was very interested in European integration mainly but not entirely because of the threat from the Soviet Union. The united states insisted in the marshal plan that the Europeans kind of get together and figure out what they would do, the united states was a strong supporter of the precursors of the European union, European call on steel community and the European payments union and the United States is basically over the course of the post war period, that is since world war two have been very supportive of the European union. Not only was it supportive but the United States also provided a security umbrella for Europe which basically took security issues off the table. Europe came close to committing suicide in the first part of the 20th century. Two wars killed tens of millions of people in both of these wars, extremely costly and wasn't as if when you ended the war end in 19 - world war two in 1945, there was any kind of foregoing conclusion that France and Germany would become allies in fact they have been bitter opponents for 75 years prior to that. Taking security issues off the table was very important in allowing Europe to go forward in creating the European Union, so American support was critical for Europe's success. Secondly Germany after the Second World War wanted to basically burry itself in Europe. I think the Germans recognized after the Second World War that there was no solution to Germany's security problem unless they could somehow transcend the conventional European state system. Germany's traditional problem was this, too big but not big enough. Too big in the sense that Germany was always threat to its neighbors or had been since German unification in 1870. Not big enough in a sense that it could never really dominate Europe as the first and second world wars had had demonstrated. So in the sense, it's unlike north America I mean in north America the united states is plenty big enough and there is a soul Mexican saying "so far from god so close to the united states" Mexico and Canada are stuck with us and well we can't dictate outcomes, we can do pretty well in establishing a stable environment. Germany was never able to do that in Europe so I think that Germans for strategic reasons were anxious to actually constrain their own freedom of action and I also think a lot made this argument actually many times in Germany, usually I get silence, usually I - I never had anyone really arguing with me but I think that not the experience with the Germans was also one which led them if you wanted to recover a sense of German pride. What exactly could you do was very hard to appeal to conventional German nationalism and was possible to appeal to a larger European history. So I think for the Germans in terms of both national identity and in terms of their strategic interest, for the German's it was very attractive to be very strong supporters of the European Union. So you had this in some ways quite odd situation in which the strongest state in Europe was very anxious to tie its own hands and limit its freedom of action, so I think these two factors of the fact that they had a big external power of the united states, that was very supportive of European integration and the fact that the largest country in Europe, Germany was actually anxious to constrain itself and tie its own hands led to a situation where you have the success of the European union. I don't think those conditions are going to be replicated in other parts of the world if you look at Latin Americas, south east Asia or Africa, you don't have a big external power and you don't have the largest state in the area trying to constrain its own freedom of action. I would finally then, we have this world a pre-modern state and the numbers there these are from several different studies which have been done by the US government, by the UK, by academics, but basically this world of pre-modern state say 37 to 73 countries, it's a world in which you don't have effective governance, it's a world in which the authorities within a particular state are not able to control effectively activities which are going on in that state or at least not able to put that state on any kind of path towards effective development or effective governance, this is also a historically unprecedented situation, in the past you had sovereignty and basically sovereignty if you went back before 1960, sovereignty worked in most countries. You had decolonization you had one available form in the international environment which was this notion of sovereignty. People didn't want to go back to empires they didn't wanted for instance for instance replicated traditional Chinese system. If you go and look at china any time before say 1900, the Chinese conception of the international system was, it was china at the centre and everybody else at the periphery. All other states were vassal states. If you look at the Chinese imperial records which go back to the Roman Empire, every visit to china, every visitor to china was not described as a sovereign state coming to negotiate with china, every visiting delegation to china was described as what as a vassal coming to pay homage to the Chinese emperor, so it is in fact this idea of sovereignty which is so familiar to us now that we forget that anything else was available, it isn't that that the idea of sovereignty is the only way to organize political life but by the end of the 20th century, it was the only way to organize political life that people were familiar with, so if you look at the conventional - once you had, decolonization in 1960, the only way in which you could organize all of these new states was by making them sovereign states so they got some attributes of sovereignty, everybody became a member of the united nations. Countries all have their national anthems, they all have armies and militaries and foreign ministries, but they didn't necessarily get effective governance and they didn't necessarily get to autonomy because many of these states which are relatively week have often been intruded upon by external actors. So you are in a situation in which if you look at the contemporary global environment, we really have three kinds of countries, modern countries, conventional sovereigns, post modern countries which have actually given up much of their Westphalian sovereignty, the European Union in a voluntary way and a pre-modern world in which you have some substantial number of states which suffer from bad or week governance. The major threats to American security and the global stability and the contemporary order come from this world of pre-modern states and there are several of them. One other conventional notions of global bads - I mean we look at globalization, there are lots of global goods, there are also global bads, criminality, disease, humanitarian crisis. There are also the conventual anxieties of weapons of mass destruction, conventional now and and threats actual terrorism and something that I think people haven't paid enough attention to but is a potential danger, larger wrap cuts in oil supply and I want to talk about each one of these and say a little bit about how we might deal with them. I am a little bit skeptical about the idea of global bads being a deal breaker that is creating a situation in which the fundamental nature of international relations and the international system would change. Criminality is a real problem, it's kind of managed by you know conventional law enforcement and intelligence, in some ways it's tolerated, those of you that have been in Florence, if you kind of look at all the kind of streets around them around central Florence, there are people selling all kinds of stuff, selling including lots of knocks offs of Italian luxury goods. Alright you have seen this I am sure, the police come down the street, there are guys that either enter the street and they blow a whistle or something and these people pack their stuff up and they are gone in about two minutes. Now we have all seen this, if the Italians really wanted to make trouble for these guys, they wouldn't come and mark police cars that either enter the street, right that wouldn't be that hard to about 20 policemen in the middle of these guys and compescate their stuff and may be put them in jail. So criminality is there, it's problematic and it's always problematic in more ways than than just [0:20:51] ____ of luxury goods I mean there is trafficking and people use drugs, there are a lot of issues which are more serious but I would say all of these issues are manageable, if you look at issues of disease, I mean we have one major example of this now AIDS, but could easily have another one in in the form of Avian Flue. Yes really big problem, but if we are thinking about managing this problem, management of this problem is going to come mainly from domestic health care systems and we can see for better or worse, the industrialized modern and post modern world will be able to handle these issues relatively well and the pre-modern world is not going to be able to handle these issues well, so I mean AIDS has become a manageable disease in the industrialized world, than it's a tremendous devastating horrible problem for Africa. If Avian Flue breaks out - and we are kind of due for another major influenza epidemic, the same kind of situation would develop, I mean the issue here would be how well can individual countries manage these kinds of threats and the answer is that many countries in the world can manage them relatively well, some countries will not be able to manage them well. Humanitarian crisis if you look at for instance tsunami in Indonesia, more even the genocide in Uganda, these are very uncomfortable difficult problems which sometimes the modern and post-modern world has decided to try to deal with in an in a kind of forward leaning way and sometimes has ignored and I don't see why that kind of pattern making calculated choices we did we were very active in the case of this tsunami and not active in Uganda. I don't see why that kind of calculated pattern will change. So I don't think if we are looking at the contemporary environment that these global bads are the big problem. I think the big problems are trans national terrorism, weapons and mass destruction and this potential of a larger broad cut in oral supplies and I want to talk about those and say what we may do about them. The kind of linty now of WMD, war on terrorism, weak states, fail states, states sponsors of terrorism are something that's very familiar since 9/11. I just want to step back and and underline that what is unique about this situation is that we now have a number of weak actors, sometimes extremely weak actors in the international system that could Reykjavik on even the most powerful states in the world, north Korea almost certainly as nuclear weapons. We know that they have missiles that can reach to Pam, Russia and China. North Korea could kill millions or tens of millions of Japanese, Chinese or Russians. You can actually get the G&P of North Korea because no one knows exactly what it is because there is really no documentation but it certainly lessen one percent, very less than one percent of of china and and Japan and probably less than five percent of the G&P of South Korea. So this is a very small weak country with very limited underlying capability which is now in a position because of its possession of nuclear weapons and missile technology to do serious damage to very much more powerful states. We know that Al-Qaeda and transnational terrorists are interested in getting weapons of mass destruction, nuclear, chemical, possibly less dangerous biological possibly equally dangerous, we know that their calculations about what they want to do are now limited in a sense that they are going to make conventional cause kind of supply in demand or cause benefit calculations of whether it's worth doing something, if you are thinking about saving your soul or you are thinking about creating heaven on earth, conventional calculations about what the cost of doing something are out the window and it's why if you look back in Europe, if you look at Europe in the 16th and 17th centuries, the English civil war, the religious wars in France, the 30 years war in Germany all of which were in formed by very bitter conflict between France and some Catholics were extremely deadly. Two and a half million people died in a 30 years war in Germany which ended in 1648. It was the most costly war in Europe until world war one. Religion and politics is a very bad thing because it basically eliminates any calculation that you might make about how much are willing to pay for that. What's the cost you are willing to pay to save your soul, you know that's infinite or incalculable, I would see you are in a situation now in which you are very weak actors either states or transnational terrorist networks possibly with access to weapons of mass destruction, certainly they would like to have access to weapons of mass destruction capable of threatening the security of even the most powerful states in the international system. This is a big time historically you need threat, it's something man man have only we but that the world has never seen before, -- in 1910, Liechtenstein could have threatened Germany, you know it would have been adhocracy but it is a situation that weren't in the contemporary environment. Secondly and this is something I think has been less in order or at east not not been discussed so explicitly, the possibility of precipitous energy supply cuts. About 20 percent of what comes in the Persian gulf region, there are a number of scenarios where you could imagine some big piece of that being cut very quickly. You could have radicals taking over one of the regimes in the Persian gulf, you could have terrorist activities sinking ships in the straits of Hermosa, you could have all the depots in Saudi Arabia blown up. If that happened it would be very devastating to the global economy, the global economy is done very well in in kind of dealing with oil prices which have gone from $20 to $90 over the course of the last decade, it would not deal very well with the 20 percent cut from one day to the next in global oil supplies. And what would happen if either of these really bad things happen, that is if you had a number of mega terrorist attacks in which tens of thousands or one has to say even millions of people could be killed or what would happen if you did have some precipitous cut in energy supplies. Alright this is a kind of little thought experiment that I will give you. I think all the conventional war rules of the international environment would be out the window. If you had this precipitous cut in oil supplies, I think you would get a conversation and the would go something like this. We are absolutely dependent on this oil, these states in the Persian gulf relatively badly governed of not being able to provide this resource which is critical for the well being and success of the world, the whole world, not just united states or Europe but developing countries as well. We have to find some alternative way of managing this resource, perhaps we should think of this resource as part of the common heritage of man kind. Have it managed by a new international institution and use part of the proceeds for the World Bank to contribute to international economic development. This could be akind of throwing out the window or conventual rules of sovereignty. If we have another mega terrorist attack and we can kind of trace it back to Al-Quada which we know is operating out of the border area between Pakistan and Afghanistan, all of this kind of conventional discussions that we have had about see what should we do about this border area which is a very big problem I think would go out the window on a second and you would have military activity at a scale which we have not seen and a set of assertions about lets say a trusteeship for the tribal areas of Pakistan which would last for a long period of time, if these things happen, if these conventual rules of sovereignty went out the window and we went back to some kind of trusteeship system or thought about some global organization who are taking over the oil supplies of the middle east, this would be extremely costly, not short term, it would be costing in terms of money or it would be costing in terms of personal, it would be costing in terms of the way we operate the master claim and the debate about the patriot act which has been very intense, now I we know that if there was a nuclear even a dirty nuclear attack on a major American city, all of these concerns about our civil liberties which people have articulated real concerns would be gone. And the American elector would be screaming, for a higher levels of control and I think if thinking back to Neil Ferguson's discussion yesterday, if you ask yourself vitalization is not an adequate strategy, it's because if you wait for one of these things to happen, it's going to be really-really bad and now really bad in just in terms of the number of people that would be killed or the economic devastation, but really bad in terms of what it would mean for the way the international system operates where we have rules which haven't been great but it work pretty well and in terms of what it would mean for domestic liberties in liberal democracies now. Both of those things, both the nature of the international system and the way in which we operate domestically would be radically affected. What can we do about this and how should we address this problem? But the first thing I could I should say is I don't have someone to philander to this and it's striking and this is is striking that more than six years now after 9/11 we have no grand strategy for the united, we have no agreement on what our strategy should be and that's why we are still debating, should we have prevention, preemption, retaliation as a grand strategy. We don't have an agreement and I think that Neil Ferguson was very-very accurate in pointing this out because what we know is this, we know that these threats are out there, they are real that as he pointed out yesterday, the chances of this happening are not calculable, we don't know what the chances are of having a mega terrorist attack, vanishing these small two percent, five percent, ten percent, 20 percent over the next ten years, we don't know and that is an extremely difficult situation to operate it. But here is what I think, I mean we have to begin thinking about doing, we have to think if we are looking at the United States government and the way in eh it's organized and this is something we can do by ourselves and this is my down the inside bell the bell way discussion. The American government now is basically organized to deal with state to state relations, the state department engages in diplomacy with other foreign ministries, for - Secretary Rice a little more than a year and a half ago made a speech at George Town in which she talked about the idea of transformational diplomacy, the idea that the state department had to organize itself to try to influence domestic authority structures in other states, not just have conversations with foreign ministries, but basically the state department has conversations with foreign ministries. The department of defense and our military, an extra ordinary institution is basically designed to fight wars against other states. What we need at least in the American government and this is the inside the bell way discussion which will take place after the next election is this, we have to think about ways of integrating our civilian military capability better than we are doing it now, we have to think about what the right mix of military and civilian allocation of resources is, right now the defense department budget is 600 billion plus dollars, the budget for the state department and AID is 40 billion plus dollars. If you look for instance at the new counter insurgency would generally portray us help to write the general consensuses that the civilian military mix should be 80 20, because our civilian military mix now is 10 90 and it's a wrong way around. So we have to think about ways in which we can reorganize the American government, ways in which we can integrate our civilian military capability better, ways in which we to think more effectively about how we allocate resources within the American government, so we are in a situation and ultimately if we look at what the policy challenges are, the big policy challenge is how to deal with these badly governed, weakened fail states and the objective of the national security strategy to create effective democracies is the right ultimate objective. But to accomplish this, we need better integration of civilian military capacity, we are going to have to except some substantial cause over an extended period of time and we are going to have a have a tolerance with failures. There are no formulas for how you create effective democracies and if you look at the effective liberal democracies now, they have all had their own unique historical trajectories. So if we are going to accomplish this, we have to recognize that something many of you will be familiar with, it's more like venture capital. When it is like investing in an index 500 fund, if it works 30 percent at the time, that's great but you have to except the fact that it's not going to work 70 percent at the time and and keep at it, so I think if we look at our situation at a global level now, the objectives are clear, getting from here to there is very hard, there are some things that we can do within our own national government to make ourselves better able to do that but we have to recognize even if we do the best that we can do, this is a very big hard challenge this idea of trying to improve governance in where are now badly governed in failed states, so let me stop and I think we have a better time for questions.
