Getting past the American election

Joseph E. Stiglitz, Project Syndicate

The pundits have now weighed in mightily in interpreting the American presidential election. Did the outcome -- together with Republican gains in the Congress -- represent an endorsement of Bush's positions? Has the American electorate swung to the right? Are Americans now more concerned about "values?"

Like price in economics, a single electoral choice compresses a lot of information. It is a summary of whether, taking everything into account, a citizen prefers one candidate to another. A host of surveys is required to figure out what it really means, for the United States -- and for the world.

This much is clear, however: There is little confidence in Bush's economic policies. The typical American family knows that it is worse off today than it was four years ago, and appears unconvinced that the tax cuts targeted at upper-income Americans brought the benefits heralded by the Bush administration.

But while Bush was not held back four years ago by the lack of a popular mandate in pushing his agenda, he may be emboldened by the seeming ringing endorsement to push even harder -- such as making the tax cuts permanent and partially privatizing social security. If adopted, these measures will further compound America's fiscal mess.

To the rest of the world, these are America's problems. Yes, the soaring deficits may contribute somewhat to international financial instability. Real interest rates may rise, as America borrows more and more. If declining confidence in U.S. fiscal policy leads to a weaker dollar, Europe and Asia may find it more difficult to export, and if the deficits prove a drag on the American economy, global growth may stall.

But for much of the rest of the world, the real concern is American unilateralism. An interconnected world needs cooperation and collective action. Historically, the U.S. has exercised enormous leadership in a world committed to the proposition that no state should dictate collective decisions. Unfortunately, over the past four years, America's president has lost the credibility necessary to exercise that leadership. Even if the 59 million votes cast for Bush represented a ringing endorsement of his Iraq policy, it would not restore America's international credibility.

I believe most Americans reject Bush's unilateralism no less than his administration's economic policies. Before the invasion of Iraq, they wanted America to go to the UN, and today they recognize that America alone cannot maintain order in the Middle East. Even if Iraq is to bear more of the cost of its own reconstruction, there will have to be debt forgiveness, and this too requires international cooperation.

Those who voted for Bush may not be as outraged by American involvement in torture, or the misleading information about Iraq's weapons of mass destruction and connections with Al Qaeda, as those abroad. But they do not want America alone to shoulder the burdens of international peace, and they are gradually coming to the realization that leadership and cooperation do not come automatically, simply because America is the only superpower.

Some worry whether Bush will use his electoral mandate to engage in more ventures. As he himself put it, "I earned capital in the campaign...and now I intend to spend it." Had the Iraq venture been more successful, these worries would have been justified. There is little secret that there were discussions concerning Iran.

But the doctrine of preemptive war has been badly tarnished, and I remain hopeful that Congress and the American people have learned a painful lesson. Peace will not quickly be restored to Iraq, and it is hard to conceive of opening up a major new front, when America can hardly manage what it has already undertaken.

Others will, of course, have to continue to bear the costs of the mistaken and mismanaged adventure in Iraq. Instability in the Middle East will continue to limit oil supplies, discouraging the expansion of production. High oil prices will dampen global growth in the remainder of 2004 and into 2005. In the short run, the only response is more conservation, and America's allies should put pressure on America to conserve. (Another reason stems from recent reports concerning the rapid melting of the polar ice cap, which seem to reconfirm worries about global warming.)

Presidents do make a difference, but every president operates within constraints. The good news is that the constraints that Bush and the American government will face in the next four years will almost surely limit the damage they will cause. The rhetoric and posturing, the lack of commitment to human rights or democratic processes, may be -- and should be -- upsetting, but there will be far more bark than bite.

While America may continue on a path of unilateralism, other countries' stance will make a difference. Some suggest that the U.S. constitution provided fewer constraints on the president in the conduct of foreign policy, because the requisite checks and balances were to be provided by the powers of the time -- Britain and France. Today, with the U.S. as the only superpower, it is even more important for countries to stand up and express their views -- and to stick by them even when pressured.

Some worry that this will worsen relations with the U.S. But long-term relationships are based on friendship and respect; coherent, well-argued positions will earn that respect. Today, many Americans, especially the young, feel far more respect for the countries that recognized the lack of evidence of Iraqi weapons of mass destruction than for those whose leaders repeated the American distortions.

It may be unfortunate that Realpolitik is the order of the day, but it is, so others must learn to play the same game. Standing up for multilateralism and international rule of law may not only be the morally right thing to do; it is also in the interests of America's allies and, ultimately, America itself.

The writer is Professor of Economics at Columbia University and a member of the Commission on the Social Dimensions of Globalization. He received the Nobel Prize in Economics in 2001.