[YJ]

14

The critics of this group assert that America cannot act on
the basis of what other nations tell it to do and that,
before anything, it must come to grips with what it wants. I
tend to agree with that. The questions that remains are:
What is the American national interest? How do we define it?
What kind of a world is out there? How do we relate
ourselves to others in that world? That is the essence of
the big debate being launched in America now.

It makes for a particularly difficult issue because the
instinctive American reaction to foreign policy is - and has
been - to treat it either as a subdivision of psychiatry or
as a subdivision of theology. Many a debate has been about
whether relations among nations are like relations among
people, or whether they fit within a single great moral
confrontation between good and evil. And tremendous
attention is paid to personal relationships. Too often in
America we hear that we must support this or that particular

CJA

15

leader. My personal view is that a leader who cannot stay in office on his own and needs our support is a weak reed upon which to build. Their political survival is not our responsibility but the responsibility of our opposite numbers. Within wide limits, we should concern ourselves with the foreign and not the domestic policies of other countries.

This, in fact, has been a pervasive problem in our relations with Russia. First Gorbachev and now Yeltsin has been put forward as the solvent of all disagreements, together with the argument that if Russia becomes democratic all the problems will go away. Yet Russia's overwhelming problem is to get used to living within the borders of Peter the Great. If it can do that, it will be relatively easy to establish a close relationship with it. If it cannot do that or it assumes the guise of a democratic Russia while using nationalist imperialism as a means of maintaining or

[Y]

16

extending its power, then we have a rocky period ahead of us. Given that that is the basic challenge to our relationship with Russia, it becomes extraordinarily dangerous to create a vacuum between Germany and Russia through a belt of nations having an ill-defined status because they belong neither to Europe nor to any other group and whose protection is not properly defined.

That is the crucial issue before us, and all the arguments about how we must not disquiet Russia have to be weighed against the fact that, despite Russia's having been invaded by Napoleon and Hitler, all of Russia's neighbours have been repeatedly invaded by Russia. I repeat, Russia must learn to stay within borders which, after all, have eleven time zones between St. Petersburg and Vladivostok and give it no reason to feel claustrophobic. If Russia can do that, many economic relationships and eventually political relationships are possible. It is even possible that, with

[Y]

17

the growth of its Asian neighbours and given the fact that there are only 30 million people living in Siberia, Russia might shed its obsession with dominating Ukraine and all the other states that came out of the Soviet Union and move into a period of genuine cooperation with Europe and America.

I should now like to turn to Asia and first talk a bit about the region in general. I said that, in Europe, the possibility of war is presently excluded. That is not true in Asia. Which is not to say that war is probable, merely that China, Japan, Korea, Vietnam, Indonesia and India do not regard each other as members of the same community. They share a relationship more akin to that of the nineteenth century European states, which viewed one another as potential strategic opponents. And that implies that the possibility of conflict is ever on their minds. The difference in the Asian relationships from those in Europe translates into differing relations with the outside world.

[Y]

18

If you query Chinese and Japanese leaders, you realize that the relativity of their positions is very much on their minds. Other elements of the equation are the Asian part of Russia, what might happen when Korea is unified, Vietnam becomes stronger, and India emerges as a great power.

I mention all this because, from the American point of view, it has led to profound cultural problems. A few years ago Professor Huntington at Harvard wrote an article about the clashes of civilisation. Everybody in America jumped on it because we like to insist that civilisations are homogeneous and hence incapable of clashing perspectives. Yet there can be no denying that there are at a minimum intellectual problems between differing societies in terms of how they assess parallel problems. When you are brought up in a Western democracy, you believe that the conflict of ideas generates truth: when you are brought up on Confucian philosophy, you simply do not believe that a stupid idea is

19

as valuable as a better idea. Instead you believe that there
is a truth out there somewhere and that you can judge people
by their approximation to that truth. That is why Chinese
societies have, on the whole, not been very hospitable to our
ideas of democracy even while they have entertained some
democratic institutions. When the United States lectures
about the value of our system in Asia, it is not really true
at all that we have mankind on our side.

I am very devoted to the Sino-American relationship
because I have been associated with it for much of its
history. It is painful to see so many current problems arise
from a total inability to connect on an intellectual level.
The United States lectures on human rights, police
procedures, narcotics, women's rights, and a whole agenda of
social reform. To the Chinese, this looks like intervention
in their domestic affairs. Moreover, they have been around
for five thousand years and managed for the greater part of

[Y]

20

that time without advice from the United States. Indeed, we
did not even exist then. The Chinese experience with Western
advice has, moreover, not been all that heartwarming
historically. Chinese leaders' traditional way of thinking is
that their primary obligation is the survival of their
society. That means that what they really want to talk to us
about is the relationship of Japan, China, Russia, India, and
all the regions I mentioned earlier, to each other. They
cannot understand our lecturing to them about the sale of
their metals to Pakistan, which does not even threaten us, on
the ground that there is some abstract principle called non-
proliferation in the service of which they ought to restrain
themselves; while we refuse to discuss the sale of American
weapons to Taiwan on the ground that there is a law in the
American Congress which makes the matter a domestic American
concern - while, in the minds of the Chinese, these weapons
are a threat. Thus when we say that the President of Taiwan

21

is visiting America in fulfillment of his obligations to his college or to his alumni, the Chinese cannot but notice that he has not been there for 42 years, so his feelings for his college must have been under rather firm restraint since 1952. And they cannot but assume that there must be some deeper symbolic significance to his visit. I am not even going to get into the argument about who is right, but we are certainly not connecting on an intellectual level.

The key issue in Asia is whether we can build a relationship with China as part of a greater community. China differs from Russia in that it does not seek to reclaim any territory though, undoubtedly, it is inconceivable to Chinese leaders that they should not get paid for their power in some currency. A dialogue must take place, and it will take place either with the Americans or without them.

Let us take Japan. Emerging at the end of the process taking place in Japan right now will be a new political

CYJ

22

system. Not seemingly very different from the preceding one, it will still be an essentially governing party system but with one important difference: Japan is moving from out of the shadow of American domination. What we in America have come to consider normal - namely the permanent subordination of Japanese politics and economics to America - was a temporary result of defeat in World War II. The Japanese perspective on Korea, China, Taiwan, Indonesia, and Indochina can no longer be the same as the American perspective. And much of Japan's politics will be driven by its assessment of whether China can hold together. This is not to say that Japanese policy will be anti-American, only that it will be much more nationalistic - though very gradually and even imperceptibly. Therefore, the various confrontations taking place between America and Japan, whatever their outcome in the economic field, will have a bitter legacy.

I could analyse similar sorts of problems in every part

23

of the World: in the Middle East, among the secular moderates, secular radicals and fundamentalists, and in the impact of the Arab-Israeli conflict, which is changing its character as it evolves. But at the end of the day, it will all come out at the same point: that every region of the world and every government must come to grips with the new realities.

There is a new reality in the political and economic fields as well. We all talk blithely about free trade producing concurrent benefits for everybody, but I think it is the nature of free trade that somebody must win and somebody loses; and the losers, if they are politically organised, will try to protect themselves. This means that a trend towards protectionism is built into free trade economics. Another reality we have to face is how one can integrate all the emerging industrial capacities into a world in which the standard of living of some regions will sink

24

furthermore, a political challenge we are already seeing in Europe.

As I pointed out earlier, there is a severe danger of global financial crises. These are sort of recognised in the abstract but nobody seems to know what to do about them. I was briefed the other day by a major bank about how it handles bilateral trade. My interlocutor gave me twenty six criteria which he assesses when he talks to his opposite number. I asked him what the odds are that his counterpart has the same criteria, and how does he relate that to some 150,000 other transactions taking place at the same moment in an international system where, daily, a trillion dollars is moved but only about 5% of it is related to trade and commerce? Even more dangerous is the possibility that everyone will run over to the same side of the boat simultaneously and tip it over. I do not have an answer to these problems but they must be tackled, for we have seen in

[Y]

25

Mexico what even a relatively small crisis can do.

Thus we are living in a totally new world - economically, technologically, and politically. In the countries which I know best, especially the United States, the patterns of thinking are in the process of changing as well but in a direction which, frankly, remains to be determined. On the other hand, at the end of World War II more or less comparable problems existed. They were indeed massive, and they got solved. Therefore, while I describe a series of seemingly chaotic events, they portend as well an opportunity for creativity. Which is another way of saying that the kind of world which emerges will really depend on the imagination of the people who are now in a position to shape it.

Thank you.

10/2/95.
What we got
from MCE.

# An Analysis of the Global Geopolitical Environment

Dr. Henry Kissinger

Former Secretary of State, United States of America

Mr. Chairman, Ladies and Gentlemen.

It is a great pleasure for me to be here on a programme with my old friend, Chancellor Helmut Schmidt. I simply want to point out that the organisers have represented every point of view from A to Z when they have Helmut and me on the same programme because in the past we have quite often, in fact usually, agreed on major problems.

Now I will talk to you about the international environment, partly from the point of view of the United States but the reality of the current situation is that in almost every part of the world leaders are facing a substantially unprecedented situation. The Cold War had its tensions but it had also its simplicities. One could look at the world from a two power perspective. In a general way, if you were in the capitals of the super powers, you could operate from the principal that what helped the other side strategically was generally of no benefit to you and vice-versa. But today we live in a world that is quite different and for the United States totally unprecedented. There is no clear cut strategic conflict. There is no clear cut ideological conflict. There is a disparity between the various kinds of activities in which human beings engage. Communications are global and instantaneous. Economics are interdependent. Values can be created by bank clerks in the form of derivatives and whatever can one say about the ability to establish controls, when a middle level bank official in Singapore can, within the space of seventy two hours, create 29 billion dollars of obligations, that one has a precarious and unprecedented system.

At the same time, political loyalties are not expanding, they are probably even shrinking. From the point of view of political allegiances loyalties attach to nations and in some of the emerging areas of the world to ethnic groupings, so there is a disparity between emotional and political obligations and loyalties and economic and communications loyalties or requirements. That is a new situation. Moreover, every region of the world finds itself in a situation which is new to it. The United States for the greatest part of its history could live with the belief that participation in international affairs or withdrawal from international affairs depended entirely on its own decisions. Even during the better part of the Cold War this was true.

[L.C.]

2

If you read the dictates in the American Congress when the Marshall Plan was put forward and NATO was established, all of the major American programmes in the post-war were put forward as temporary expedients with a terminal date at which point the need for American engagement would disappear. Today there is no such possibility. If you believe in American involvement in the world at all, which most thoughtful people do, but not all, you know that it is an endless process. Yet there is no clear cut solution to what is in front of America and that produces a major debate. I will come back to that in a minute.

Europe, about which Helmut will speak, is also in an entirely new situation for itself. The European nation state which dominated world affairs until the end of World War II is no longer capable of managing global problems by itself, so some sort of cooperation with its neighbours is necessary. What sort of cooperation in what framework? That is the big debate that is going on about which Chancellor Schmidt will comment. I will only point out two important aspects of it.

One. However that debate goes, there is one crucial factor in Europe which is different from other regions of the world, which is that the nations of Europe no longer look at each other as strategic opponents. A military conflict between established European nations is practically inconceivable. What degree of cooperation they achieve is open to question, but it will surely not be solved by military force or by the threat of military force. I put aside ethnic conflicts in the Balkans or in some of the states that emerged out of the Soviet Union, but in the established European nations I consider military conflict out of the question.

The second question is, however it is organised how does one define Europe? Where does it begin? Where are its founders? The third question is what will be its relationship with America and its relationship with Russia and other parts of the world? Those are the issues before Europe, but the most significant aspect is that however they result they will result from a combination of politics and economics and not from any military issues. Russia too is in an unprecedented situation. It has borders unknown to it since Peter the Great. It is shifting from Stalinist economics to market economics under the aegis of the people who ran Stalinist economics and therefore it has aspects which are quite different from the evolution of market economics in the West. It is seeking to establish democracy, or it is *claiming* that it is seeking to establish democracy. In a country whose historical traditions, while related to the evolution of Western democracy has nevertheless in the political field been quite different in the sense that religion and the state

[L.C.]

3

were never separated as they were conceptually in the Western society, in which the enlightenment had a different character, capitalism never developed and therefore the preconditions that we associate with Western democracy are substantially absent. China and Japan are emerging into a world role after centuries of isolation and in the case of Japan an imperial episode. So the assessment to these conditions is made extraordinarily difficult in the United States and in many other countries because, speaking now of the United States, we have two circumstances. One generational the other technological.

In America at this moment there are three different generations with different perspectives on foreign policy. There is my generation, that grew up with significant experience of World War II and the twenty years after World War II. A generation that therefore believes that governments can achieve great constructions that overcame the challenges that they faced and built a world order that on the whole was successful. There is the Vietnam generation whose significant experience was a war that turned out to be unsuccessful. This generation, in classical American fashion, transformed what might have been bad political judgement in entering the world into a moral indictment of American society and they rather believed that America must spend its energies to reform itself first and secondly, to the extent that it engages itself internationally, that it must reform the rest of the world. So they have a tendency to talk not about political relationships but to act as if they were running a foundation and not a country. Their agenda is democratisation of the world, drug control, police measures and it produces to their amazement considerable tension with other regions of the world who have not appointed America as the moral judge of their domestic politics or of their social arrangements and they find this attitude of the outside world very hard to understand. It is one of the problems in our relationship with China.

Then there is the new generation that won the election last fall and that is not really very well understood abroad, partly because most of our newspapers are populated by the products of the Vietnam period and they consider a conservative Republican victory an offence against nature and a temporary phenomena. Now I don't believe its a temporary phenomena. I belong to the Republican side but to a part of it that is an endangered species, namely moderate Republican. So I am not here as a defendant of right-wing Conservatism but the fact that it is first of all a reaction against a debunking of American values that has been going on at the end of the Vietnam generation. You cannot tell a middle-class Protestant society that everything they ever believed

[LC]

4

in was nonsense, imperialistic, centre-driven and, whatever the slogans are, without getting some primitive reaction. Secondly, it is an attempt to reassert an American interest in the world. The trouble is that interest has not yet been defined. So those three generations are now operating side by side. They operate in an environment in which there has been a change in human consciousness which I believe is as important as the invention of printing. That is to say the shift from learning by reading to learning by pictures. My generation was brought up by books. I have to read something before I can absorb it. When you learn by books you form concepts to relate disparate events to each other. If you read novels you must have a certain imagination that creates what the scene is that the author is describing. When you learn from pictures you learn by impressions, you do not have to form concepts. They are formed for you. The tendency is to go from impression to impression, often unrepeatable. When you learn from books style is of some consequence, when you learn from a computer style does not matter so much. What matters is how the document is moved by you. I am passing no value judgement. I am saying that it changes the nature of our politics. The printed word becomes less important. The picture becomes more important.

We had a situation last year in which there was an attack on a market place in Sarajevo. Nothing happened there that we had not known for a year and a half, yet the printed accounts of attacks made no significant impact. The picture of that attack on that market place, where today there is a strong dispute whether the Serbs did it or the Muslims did it, nevertheless galvanised the American government and NATO into action. I am not saying they were wrong but I am saying that it is a different type of politics and the action that it had galvanised them into was how to prevent that particular occurrence, not an analysis of the Bosnian crisis. I think this has to be understood.

We in America are maybe twenty years ahead of the rest of the world in that evolution. What it does is to produce political leaders more reactive, more driven by the global communications, political leaders that focus more on what to say than on what to think and it will undoubtedly affect the style of politics in which the issues that I have described have to be resolved. For the United States it means that we are now at the beginning of a debate very similar to the one that took place between 1945 and 1949 when the containment theory was evolved. The difference is, in 1945 for a decade we had a group of leaders that were quite homogeneous in both political parties from the north east establishment, many of whom had friends abroad, especially in Europe, who thought a trip abroad was the normal thing to do and who were self

[L.C.]

5

confident having weathered the depression and the war. The present generation of leaders is more fragmented. They come mostly from the South, South West and the West Coast, with no organic ties to other parts of the world, and no particular knowledge of other parts of the world. To understand the mentality, I spoke quite a while ago in the city of Omaha, Nebraska. It was at the height of the Cold War and I said something about the dangers of the Cold War. At the question period somebody got up and said, "All very well to talk about dangers but not to us in Omaha, what could anyone possibly want from us in Omaha?" The fact that the Strategic Air Command was three miles down the road, and if there was one thing guaranteed it was that in a war people would want something from Omaha probably before Washington, had not penetrated into the consciousness of these people.

So this is the American problem right now. Ten years ago the people who are now in power were advancing the U.N. as a means to curb assertions of American self interest like what they considered to be Vietnam. Today these people advocate the U.N. as a way for Americans to play an international role. Their critics were gaining the upper hand by talking about defining the American national interest. They say we cannot act on the basis of what other nations tell us to do we have first to know what we want. I tend to agree with that. The only question is, what is the American national interest? How do you define it? What kind of a world? How do we relate ourselves to others? That is the big debate that will be launched in America now. It will have very strange features but that in essence is what is before us, and it is a tough problem because for the American mentality the instinctive American reaction to foreign policy is to treat it either as a subdivision of psychiatry or as a subdivision of theology and you get debates between whether relations among nations are like relations among people, or whether it is all a great moral confrontation between good and evil. The result is that one enormous attention is paid to personal relationships. How often do we hear in America that we must support some particular leader. My personal view is that a leader who cannot stay in office, who needs our support is a weak reed on which to build. Political survival is the responsibility of our opposite numbers not ours. Of course we must not do outrageous things, but within wide limits we should, in my view, concern ourselves with the foreign policy not the domestic politics of other countries.

Now this has been the problem in our relationships with Russia. First Gorbochev, now Yeltsin have been put forward as disillusioned to our difficulties and the argument is that if Russia becomes democratic it will solve all our problems.

[L.C.]

6

My point of view is different. My point of view is that the overwhelming problem of Russia is whether it can get used to living in the borders of Peter the Great. If it can do that it will be relatively easy to establish close relationships with it. If it cannot do that, in whatever guise, if even a democratic Russia uses Russian nationalist imperialists as a means to stay in power or to extend its power then we will have a rocky period ahead of us. That is the basic challenge in relationships with Russia. Therefore, I believe it is extraordinarily dangerous to create a vacuum between Germany and Russia of a belt of nations of ill-defined status that belong neither to Europe nor to any other group, that do not participate in Europe and whose protection is not properly defined. This is the issue that we will have to face and all the arguments that we hear that we know must disquiet Russia, have to weigh not only the fact that Russia was invaded by Napoleon and Hitler but that all the neighbours of Russia have repeatedly been invaded by Russia. And, I repeat, if Russia stays within borders that have eleven time zones between St. Petersburg and Vladivostok, in a country where St. Petersburg is closer to New York than Vladivostok and where Vladivostok is closer to Seattle than to Moscow, in other words where there is no reason for claustrophobia. If Russia can live within such a territory many economic relationships and eventually political relationships are possible. It is even possible that with the growth of its Asian neighbours and with the fact that there are only 30 million people living in Siberia, Russia may shed its obsession with dominating Ukraine and all the other states that came out of the Soviet Union of which Ukraine is by far the most important and move into a period of genuine cooperation with Europe and America, and that is something we should work for, but I believe this fundamental issue must be faced first. It is the key issue in Russia's relations with the rest of the world and it cannot be overcome by a kind of psycho-therapeutic approach.

Now let me turn to Asia and first talk about the region in general. I said that in Europe war is excluded. That is not true in Asia. I am not saying that war is probable but I am saying that China, Japan, Korea, Vietnam, Indonesia and India look at each other not as part of the same community but much as nineteenth century European states looked at each other, i.e. as potential strategic opponents. I am not saying that they are going to go to war with each other but I am saying that the possibility of conflict is always on their minds. So there is a different relationship in Asia than there is in Europe and a different relationship for the outside world. If you scratch Chinese and Japanese leaders you know that this relative position is very much on their minds. Then if you throw into the equation the Asian part of Russia and what

[L.C.]

7

happens when Korea is unified and when Vietnam becomes stronger and when India emerges as a great power, you have different policies.

Now I mention this because again from the American point of view we have a profound cultural problem. A few years ago Professor Huntingdon from Harvard wrote an article about the clashes of civilisation. Everybody jumped on it of course because we liked to insist that civilisations are homogeneous and not capable of clashing and I am not going to argue whether that is the key element, all I am saying is there are intellectual problems between different societies in how they assess similar problems. When you are brought up in a Western democracy you believe that the conflict of ideas generates truth. When you are brought up in confusion philosophy you do not believe that stupid ideas are as valuable as better ideas. You believe that there is a truth out there somewhere and that you can judge people by their approximation to that truth and therefore Chinese societies have, on the whole, not been very hospitable to our ideas of democracy even when they have some democratic institutions. I always joke with my friend Lee Kwan Yu that when the number of opposition representatives in his Parliament exceeds three out of eighty he gets rather panicky. So when the United States lectures about the value of our system in Asia it is not true at all that we have mankind on our side.

In many countries we create tremendous resentment but the problem is people. I am very attached to the Chino-American relationship because I have been associated with it for much of its history and it is therefore painful to see that many of the problems arise from a total inability to connect on an intellectual level. The United States lectures on human rights, police procedures, narcotics, women's rights, a whole agenda of social reform. To the Chinese this looks like intervention in their domestic affairs. Moreover, they have been around for five thousand years and they managed for the greater part of that time without advice from the United States. We did not even exist. Their experience with Western advice was not all that heartwarming so that they take it for granted but above all the Chinese leaders having been around for a long time think that their obligation is the survival of their society. That means that what they want to talk to us about is the relationship of Japan, China, Russia, India, all the regions that I mentioned, with each other. They cannot understand it that we lecture to them about the sale of their metals to Pakistan, which doesn't threaten us, on the ground that there is some abstract principle out there called non-proliferation in whose service they should restrain themselves, while we refuse to discuss the sale of American weapons to Taiwan on the ground that

[LC]

8

there is a law of the American Congress and therefore a domestic American matter even though those weapons in their minds threaten them. It is not a self-evident proposition, so when we say that the President of Taiwan is visiting America in fulfillment of his obligations to his college or his alumnus they notice that he hasn't been there for 42 years so his feelings for his college were under firm restraint since 1952. They think there must be some deeper symbolic significance and I am not even going to get into the argument about who is right, I am saying that we are not managing to connect on an intellectual level.

The key issue in Asia is whether one can build a relationship with China as part of a community there. It is different from Russia in the sense that it does not seek to reclaim any territory there, but undoubtedly it is inconceivable to Chinese leaders not to get paid for their power in some currency. So this is a dialogue that must take place and that will take place either with the Americans or without them. Take Japan. I look at what goes on in Japan right now like in one of these Japanese plays, at the end of which there will emerge a new political system. Not much different from the preceding one it will still be essentially a governing party system but with one important difference, they are moving out of the shadow of American domination. What we in America consider normal, namely the permanent subordination of Japanese politics and economics to us was temporary was the result of the defeat, the need to adjust to the new world and the dominance of Russia as a threat. But looking at Korea, China, Taiwan, Indonesia, Indochina from Tokyo, is not the same as looking at it from the United States and of course much of Japanese politics will be driven by their assessment of whether China holds together or does not. So I am not saying Japanese policy will be anti-American but it will become much more national very gradually, very imperceptibly but I believe that these confrontations that are taking place, whatever the outcome in the economic field, will have a bitter legacy. I could analyse similar problems in every part of the world, in the Middle East between secular moderates, secular radicals and fundamentalists, in the impact of the Arab Israeli conflict which is changing its character on this evolution, but it will all come out at the same point, every region has to come to grips with a new reality.

There is a new reality in the political field and a new reality in the economic field. We all talk blithely about free trade producing concurrent benefits for everybody, but I think it is the nature of free trade that somebody wins and somebody loses and the losers, if they are politically organised, will try to protect themselves so that a trend to

[LC]

9

protectionism is built into free trade economics. It is a
reality which we have to face and how one can integrate all
these emerging industrial capacities into a world in which
the standard of living of some regions will sink is a
political challenge we already see in Europe. I believe, on
the basis of what I pointed out at the very beginning, that
the dangers of global financial crisis are sort of recognised
in the abstract but nobody seems to know what to do about it.
I was briefed the other day by a major bank about how they
handle bilateral traits and their guy has twenty six criteria
which he assesses when he talks to his opposite number. I
said to him - what are the odds that the other guy has the
same criteria and how do you relate this to about 150,000
other transactions taking place at the same moment and to an
international system where daily a trillion dollars moves and
only about 5% is related to trade and commerce? And what is
more dangerous, if they don't have the same criteria or if
they all run to the same side of the boat simultaneously and
turn it over? I don't have an answer to these problems but I
am saying that if they are not tackled we have seen in Mexico
what a relatively small crisis can bring.

So to sum up we live in a totally world, economically,
technologically, politically. In the countries I know best,
especially in the United States, the patterns of thinking are
in the process of changing but in a direction that frankly
remains to be determined. On the other hand at the end of
World War II more or less comparable problems existed and
they were massive. So what I am describing as a series of
seemingly chaotic events is also an opportunity for great
creativity which is another way of saying that the kind of
world that will emerge will really depend importantly on the
imagination of the people who are now in a position to shape
it.

Thank you.

08/08 '95 12:21

FAX 32 2 5432415

MCE

☑002/008

I am not going to ask you whether you can hear me because those who cannot won't be able to answer it anyway!

It's a great pleasure for me to be here on a programme with my old friend, Chancellor Helmut Schmidt. I simply want to point out that the organisers have represented every point of view from A to Z when they have Helmut and me on the same programme because in the past we have quite often, in fact usually, agreed on major problems.

At the same time, political loyalties are not expanding, they are probably even shrinking. From the point of view of political allegiances loyalties attach to nations and in some of the emerging areas of the world to ethnic groupings, so there is a disparity between emotional and political obligations and loyalties and economic and communications loyalties or requirements. That is a new situation. Moreover, every region of the world finds itself in a situation which is new to it. The United States for the greatest part of its history could live with the belief that participation in international affairs or withdrawal from international affairs depended entirely on its own decisions. Even during the better part of the Cold War this was true. If you read the dictates in the American Congress when the Marshall Plan was put forward and NATO was established, all of the major American programmes in the post-war were put forward as temporary expedients with a terminal date at which point the need for American engagement would disappear. Today there is no such possibility. If you believe in American involvement in the world at all, which most thoughtful people do, but not all, you know that it is an endless process. Yet there is no clear cut solution to what is in front of America and that produces a major debate. I will come back to that in a minute.

Transcript of an un-texted speech

1

The 1995 Top Management Forum

21-22 June 1995, London

R=90%

32 2 5432415

09-08-95 06:27AM

P002 #20

08/09 '95 12:22 FAX 32 2 5432415

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The second question is, however it is organised how does one define Europe? Where does it begin? Where are its founders? The third question is what will be its relationship with America and its relationship with Russia and other parts of the world? Those are the issues before Europe, but the most significant aspect is that however they result they will result from a combination of politics and economics and not from any military issues. Russia too is in an unprecedented situation. It has borders unknown to it since Peter the Great. It is shifting from Stalinist economics to market economics under the aegis of the people who ran Stalinist economics and therefore it has aspects which are quite different from the evolution of market economics in the West. It is seeking to establish democracy, or it is claiming that it is seeking to establish democracy. In a country whose historical traditions, while related to the evolution of Western democracy has nevertheless in the political field been quite different in the sense that religion and the state were never separated as they were conceptually in the Western society, in which the enlightenment had a different character, capitalism never developed and therefore the preconditions that we associate with Western democracy are substantially absent. China and Japan are emerging into a world role after centuries of isolation and in the case of Japan an imperial episode. So the assessment to these conditions is made extraordinarily difficult in the United States and in many other countries because, speaking now of the United States, we have two circumstances. One generational the other technological.

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Then there is the new generation that won the election last fall and that is not really very well understood abroad, partly because most of our newspapers are populated by the products of the Vietnam period and they consider a conservative Republican victory an offence against nature and a temporary phenomena. Now I don't believe its a temporary phenomena. I belong to the Republican side but to a part of it that is an endangered species, namely moderate Republican. So I am not here as a defendant of right-wing Conservatism but the fact that it is first of all a reaction against a debunking of American values that has been going on at the end of the Vietnam generation. You cannot tell a middle-class Protestant society that everything they ever believed in was nonsense, imperialistic, centre-driven and, whatever the slogans are, without getting some primitive reaction. Secondly, it is an attempt to reassert an American interest in the world. The trouble is that interest has not yet been defined. So those three generations are now operating side by side. They operate in an environment in which there has been a change in human consciousness which I believe is as important as the invention of printing. That is to say the shift from learning by reading to learning by pictures. My generation was brought up by books. I have to read something before I can absorb it. When you learn by books you form concepts to relate disparate events to each other. If you read novels you must have a certain imagination that creates what the scene is that the author is describing. When you learn from pictures you learn by impressions, you do not have to form concepts. They are formed for you. The tendency is to go from impression to impression, often unrepeatable. When you learn from books style is of some consequence, when you learn from a computer style does not matter so much. What matters is how the document is moved by you. I am passing no value judgement. I am saying that it changes the nature of our politics. The printed word becomes less important. The picture becomes more important.

We in America are maybe twenty years ahead of the rest of the world in that evolution. What it does is to produce political leaders more reactive, more driven by the global communications, political leaders that focus more on what to say than on what to think and it will undoubtedly affect the style of politics in which the issues that I have described have to be resolved. For the United States it means that we are now at the beginning of a debate very similar to the one that took place between 1945 and 1949 when the containment theory was evolved. The difference is, in 1945 for a decade we had a group of leaders that were quite homogeneous in both political parties from the north east establishment, many of whom had friends abroad, especially in Europe, who thought a trip abroad was the normal thing to do and who were self confident having weathered the depression and the war. The present generation of leaders is more fragmented. They come mostly from the South, South West and the West Coast, with no organic ties to other parts of the world,

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Now this has been the problem in our relationships with Russia. First Gorbochev, now Yeltsin have been put forward as disillusioned to our difficulties and the argument is that if Russia becomes democratic it will solve all our problems. My point of view is different. My point of view is that the overwhelming problem of Russia is whether it can get used to living in the borders of Peter the Great. If it can do that it will be relatively easy to establish close relationships with it. If it cannot do that, in whatever guise, if even a democratic Russia uses Russian nationalist imperialists as a means to stay in power or to extend its power then we will have a rocky period ahead of us. That is the basic challenge in relationships with Russia. Therefore, I believe it is extraordinarily dangerous to create a vacuum between Germany and Russia of a belt of nations of ill-defined status that belong neither to Europe nor to any other group, that do not participate in Europe and whose protection is not properly defined. This is the issue that we will have to face and all the arguments that we hear that we know must disquiet Russia, have to weigh not only the fact that Russia was invaded by Napoleon and Hitler but that all the neighbours of Russia have repeatedly been invaded by Russia. And, I repeat, if Russia stays within borders that have eleven time zones between St. Petersburg and Vladivostok, in a country where St. Petersburg is closer to New York than Vladivostok and where Vladivostok is closer to Seattle than to Moscow, in other words where there is no reason for claustrophobia. If Russia can live within such a territory many economic relationships and eventually political relationships are possible. It is even possible that with the

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Now let me turn to Asia and first talk about the region in general. I said that in Europe war is excluded. That is not true in Asia. I am not saying that war is probable but I am saying that China, Japan, Korea, Vietnam, Indonesia and India look at each other not as part of the same community but much as nineteenth century European states looked at each other, i.e. as potential strategic opponents. I am not saying that they are going to go to war with each other but I am saying that the possibility of conflict is always on their minds. So there is a different relationship in Asia than there is in Europe and a different relationship for the outside world. If you scratch Chinese and Japanese leaders you know that this relative position is very much on their minds. Then if you throw into the equation the Asian part of Russia and what happens when Korea is unified and when Vietnam becomes stronger and when India emerges as a great power, you have different policies.

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threaten us, on the ground that there is some abstract principle out there called non-proliferation in whose service they should restrain themselves, while we refuse to discuss the sale of American weapons to Taiwan on the ground that there is a law of the American Congress and therefore a domestic American matter even though those weapons in their minds threaten them. It is not a self-evident proposition, so when we say that the President of Taiwan is visiting America in fulfillment of his obligations to his college or his alumnus they notice that he hasn't been there for 42 years so his feelings for his college were under firm restraint since 1952. They think there must be some deeper symbolic significance and I am not even going to get into the argument about who is right, I am saying that we are not managing to connect on an intellectual level.

There is a new reality in the political field and a new reality in the economic field. We all talk blithely about free trade producing concurrent benefits for everybody, but I think it is the nature of free trade that somebody wins and somebody loses and the losers, if they are politically organised, will try to protect themselves so that a trend to protectionism is built into free trade economics. It is a reality which we have to face and how one can integrate all these emerging industrial capacities into a world in which the standard of living of some regions will sink is a political challenge we already see in Europe. I believe, on the basis of what I pointed out at the very beginning, that the dangers of global financial crisis are sort of recognised in the abstract but nobody seems to know what to do about it. I was briefed the other day by a major bank about how they handle bilateral traits and their guy has twenty six criteria which he assesses when he talks to his opposite number. I said to him - what are the odds that the other guy has the same criteria and how do you relate this to about 150,000 other transactions taking place at the same moment and to an international system where daily a trillion dollars moves and only about 5% is related to trade and commerce? And what is more dangerous, if they don't have the same criteria or if they all run to the same side of the

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Thank you.

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The 1995 Top Management Forum

21-22 June 1995, London

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