Reconnecting to the World (Page 6)

With regard to the Middle East in general, we must extract ourselves from what could escalate into what many Arabs see as a civilizational war with the Islamic world. This, however, does not mean disengaging, but rather repositioning the United States to be less of an overbearing dominant power. Our strategy toward Islamic jihadism ought to consist of lowering America's profile in the region and patiently containing bin Ladenism as it slowly loses its allure by being denied the foreign imperial enemy it needs in order to succeed. And the best way to lower our profile, without sacrificing any legitimate American interests, is to internationalize as much as possible US policy toward the Middle East--to reduce America's dominant, in-your-face presence in the region by withdrawing forces from Iraq and by sharing responsibility with the three other members of the "Quartet," the EU, Russia and the UN.

We should encourage the EU to take more responsibility for promoting democratization and economic development in the region around the European Rim, from the Maghreb to the Levant. We should also recommit ourselves to the Quartet and through it support an international conference for a comprehensive settlement of the Israeli-Arab conflict and the establishment of a Palestinian state. By delaying discussion of the final status of such a state, we are only encouraging the most radical elements in the West Bank, Gaza and the region.

The establishment of regional security concerts must be accompanied by other great-power efforts to manage conflicts and reduce security risks. Chief among these must be a stronger effort to put all fissionable materials under international control, strengthen international safeguards against biological warfare and create a greater UN capacity for state-building. Together with America's traditional role as the guarantor of the world's sea lanes, these would constitute the principal security pillar of American foreign policy.

As the progressives who lived through the 1919-39 crisis understood, collective security is difficult to maintain without collective economic cooperation aimed at expanding middle-class prosperity. And in many respects, the foundations of collective economic management are even weaker than those for collective security. So it is here that the United States must put its greatest emphasis in the decade ahead. The lack of middle-class jobs and economic dignity is what links the growing disquiet in Ohio to the backlash against Turkish immigrants in Europe to the rise of religious radicalism in the Middle East to the appeal of Hugo Chávez in Latin America--not to mention the threat of rising nationalism in China, should economic growth and job creation falter there. That is why we have to put jobs and prosperity at the center of American foreign policy.

The problem is that we are building a world economy that is too small, too risky and too dependent on American consumption to accommodate both the aspiring middle classes of the developing world and the existing middle classes of the developed world. We are doing so because we are relying on a nineteenth-century economic philosophy that ignores the lessons of the twenty-year crisis. As in the decades before the Great Depression, rising productivity gains made possible by the spread of industrialization and technology and the opening up of new production centers and labor markets have created a glut of capacity, savings and labor. The entry of China and India into the global economy has had the effect of more than doubling the world's potential labor force. This has put downward pressure on wages in both the developed and developing worlds. This in turn has caused a fall in global aggregate demand in relation to global supply, creating a classic 1930s-style Keynesian problem relieved only by America's debt-led consumption, which is unsustainable [see William Greider, "Debtor Nation," May 10, 2004, and "Elite Protectionists," April 11].

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