MANAGEMENT CENTRE EUROPE 1995 TOP MANAGEMENT FORUM
An Analysis of the Global Geopolitical Environment

JUNE 21, 1995

LONDON

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 want to
point out that the organisers are indeed representing every
point of view, from A to B, when they have Helmut and me on
the same programme. In the past he and I have usually agreed
on major problems.

I would like to speak to you about the international
environment. Though it will be in part from the point of view
of the United States, 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 also had a certain simplicity. One could
look at it from a two-power perspective. Generally speaking,

2

if you were in the capitals of the two superpowers, you could
operate from the principle that whatever helped the other
side strategically could be of little or no benefit to you,
and vice-versa.

Today, however, we live in a world that is quite
different and, for the United States, totally without
precedent. There is no clear cut strategic or ideological
conflict, and there is astonishing disparity among the
various kinds of activities in which human beings are
engaging. Communications are global and instantaneous.
Economics are interdependent to the extent that a bank
official in Singapore can, within the space of days, create
billions of dollars of obligations and bankrupt a whole
system. Concurrently, political loyalties are not only not
expanding, they are probably shrinking. From the point of
view of political allegiances, the loyalties attached to
nations - and in some of the emerging areas of the world to

3

ethnic groupings - are characterized by a disparity between
emotional and political obligations and overshadowed by
economic and technological necessities.

For the greatest part of their history, Americans have
been able to believe that participation in or withdrawal from
international affairs depended entirely on their own
decisions. This seemed to be true for the better part of the
Cold War as well. If you read the dictates in the American
Congress at the time that the Marshall Plan was put forward
and NATO was established, all of the major American
programmes in the post-war era were advanced as temporary
expedients. Each had a terminal date at which point the need
for American engagement would disappear. Today there is no
such possibility. If you believe in America's involvement in
the world at all, which most but not all thoughtful people
do, you know that it is a never-ending process. And, in
America, that proposition produces major debate. (I shall

4

come back to that in a minute.)

Europe, about which Helmut will speak, likewise finds
itself in an entirely new situation. 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, making some degree of cooperation with its neighbours
necessary. But just what kind of cooperation and within what
framework? That is the big debate taking place in Europe and
Chancellor Schmidt will comment on it. I only wish to point
out some important aspects of it.

First, and however that debate evolves, there is one
crucial factor in Europe that makes things quite different
from those in other regions of the world. And it is that the
nations of Europe no longer view each other as strategic
opponents. A military conflict among the established
European nations is practically inconceivable. The degree of
cooperation they might achieve is open to question, but it

will surely not be solved by military force or by the threat
of military force. Putting aside ethnic conflicts in the
Balkans or in some of the states which emerged from the
break-up of the Soviet Union, in the established European
nations I consider military conflict out of the question.

The second important aspect is that, however organised,
what is the criteria by which to define Europe? Where does
Europe begin, and where are its frontiers? The third aspect
has to do with the kind of relationship this Europe has with
America, as well as its relationships with Russia and other
parts of the world. Of these crucial issues before Europe
today, the most significant thing to remember is that,
however things turn out, they will result from a combination
of politics and economics, not from any military issues.

Russia, too, is in an unprecedented situation. It has
been left with borders unknown to it since Peter the Great.
It is shifting from Stalinist economics to market economics

(N)

6

under the aegis of the same people who ran the Stalinist
economic system, hence it contains elements which make this
evolution towards the market economy quite different from any
which has transpired in the West. Russia is also seeking to
establish democracy, at least it *claims* that it is seeking to
establish democracy. We must remember that Russia is a
country whose historical traditions, while seemingly related
to those of the Western democracies, have nevertheless in the
political field been very different. By this I mean that
religion and the state were never separate, as they were
conceptually in Western society where the Enlightenment
imposed on it a unique character and where capitalism is an
ancient tradition. In Russia, capitalism never took hold and
that means that the preconditions which we associate with
Western democracy are absent from the Russian ethos.

China and Japan are emerging into world roles after
centuries of isolation and, in the case of Japan, an imperial

episode.

Reaching assessments with respect to these world
conditions is especially difficult for the United States and
other Western countries because - and I speak now for the
United States - of our own special circumstances. In the
United States, these have to do overwhelmingly with
generational and technological considerations. There are
presently three different generations with very different
perspectives on foreign policy in the United States. There
is my own generation, which grew up with the impact of World
War II and of the twenty years after the war. It is a
generation which believes that government can generate great
constructions to overcame challenges and to build a world
order that is, on the whole, successful and positive. Then
there is the Vietnam generation, whose significant experience
was a war which turned out to be unsuccessful. This
generation, in true American fashion, transformed what might

8

have been bad political judgement into a moral indictment of
American society and policy. They would rather believe that
America must, first of all, spend its energies in reforming
itself and, secondly, to the extent that America engages
itself internationally at all, that it must reform the rest
of the world as well. There is an attendant tendency never
to talk about political relationships and to carry on as if
the American government were running a foundation and not a
country. This generation's agenda is the democratisation of
the world and it is always to their great amazement that this
should contribute to considerable tension with other regions
of the world - whose populations did not appoint America as
the moral judge of their domestic politics or social
arrangements. It is certainly one of the problems in
America's relationship with China.

Finally, there is the new generation, which won the last
election and which is not really very well understood abroad,

CD

9

partly because most of our newspapers are peopled by the
products of the Vietnam period and they consider a
conservative Republican victory an offence against nature and
never more than a temporary phenomenon. Now I do not believe
it is a temporary phenomenon. I belong to the Republican
side but to a part of it which is becoming an endangered
species, namely the moderate Republicans. Widespread right-
wing conservatism is a reaction against the debunking of
American values that has been going on since the end of the
Vietnam war. You cannot tell a middle-class Protestant
society that everything it ever believed in was nonsense,
imperialistic, and centre-driven without eliciting some
primal reaction. The conservatism is also part of an attempt
to reassert an American interest in the world. The trouble
is, that interest has not yet been defined.

At any rate, these are the three generations presently
operating side by side. And they do so, moreover, in an

10

environment which has witnessed a fundamental change in human
consciousness, one I believe to be as important as the
invention of printing. What I am referring to is the shift
from learning by reading to learning through pictures. My
generation was brought up on 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
in your mind the scene which the author is describing. When
you learn from pictures, you learn by impressions and do not
need to form concepts because they are already formed. The
tendency is to go from one impression to the next, with these
often being unrepeatable.

When learning from books, style is of some consequence;
when learning from a computer, style does not matter as much.
All this translates into changes in the very nature of our
politics. The printed word has become less important while

11

the picture has become nearly all-important.

Last year an attack was launched on a marketplace in Sarajevo. Nothing occurred that day of which we had not been aware for a year and a half except this: all the printed accounts of attack paled before the impact of this single picture to the extent that, today - and despite all the disputes as to whether the Serbs or the Muslims were responsible - the American government and NATO have been galvanized into action. The politics of the situation have thus been altered but on the basis of a need to prevent that particular occurrence, not on the basis of an analysis of the Bosnian crisis.

In terms of that evolution, we in America are probably some twenty years ahead of the rest of the world. What it means is that the new political leaders are more reactive and far more driven by considerations grounded in the advent of instant communications. Their focus is on what to say rather

than on what to think, and it affects the style of politics
within which the issues I have described must be resolved.

For the United States, it means that we are now at the
beginning of a debate very similar to the one which took
place between 1945 and 1949, when the containment theory
first developed. The difference is that in 1945 and for a
decade after we had a group of leaders in both political
parties who were in fact basically homogeneous. They came
from the Northeast Establishment and many of them had friends
abroad, especially in Europe. They were self-confident,
having weathered the Depression and the war.

The present generation of American leaders is far more
fragmented. They come mostly from the South, the Southwest
and the West Coast and have no organic ties to other parts of
the world or any particular knowledge of other parts of the
world. To understand their mentality, I will describe an
incident quite a while ago in the city of Omaha, Nebraska.

13

It was at the height of the Cold War and I was giving a talk there during which I said something about the dangers of the Cold War. At the question period, somebody got up and said, "It is all very well to talk about the dangers but surely not to us here in Omaha. What could anyone possibly want from us in Omaha?" Yet the fact was that the Strategic Air Command was only three miles down the road, and if there was one sure thing it was that, in the event of a war, there were indeed people who might want something from Omaha even before they wanted Washington. But that had not penetrated into the consciousness of these people.

That is still in essence the American problem. Ten years ago the people who are now in power were advancing the U.N. as a means of curbing perceived American assertions of self-interest in the style of what they considered to be the tragedy of Vietnam. Today, these same people are advocating the U.N. as a way for America to play an international role.

(N)

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

(Y)

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

(4)

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

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.

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

(N)

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

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

(Y)

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

(4)

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

(N)

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

(N)

24

further - 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

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.

1

# An Analysis of the Global Geopolitical Environment

I would like to speak to you about the international environment. Though it will be in part from the point of view of the United States, 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 also had a certain simplicity. One could look at it from a two-power perspective. Generally speaking, if you were in the capitals of the two superpowers, you could operate from the principle that whatever helped the other side strategically could be of little or no benefit to you, and vice-versa.

Today, however, we live in a world that is quite different and, for the United States, totally without precedent. There is no clear cut strategic or ideological conflict, and there is astonishing disparity among the various kinds of activities in which human beings are engaging. Communications are global and instantaneous. Economics are interdependent to the extent that a bank official in Singapore can, within the space of days, create billions of dollars of obligations and bankrupt a whole system. Concurrently, political loyalties are not only not expanding, they are probably shrinking. From the point of view of political allegiances, the loyalties attached to nations - and in some of the emerging areas of the world to ethnic groupings - are characterized by a disparity between emotional and political obligations and overshadowed by economic and technological necessities.

[L.C.]

2

expedients. Each had a terminal date at which point the need for American engagement would disappear. Today there is no such possibility. If you believe in America's involvement in the world at all, which most but not all thoughtful people do, you know that it is a never-ending process. And, in America, that proposition produces major debate. (I shall come back to that in a minute.)

Europe, about which Helmut will speak, likewise finds itself in an entirely new situation. 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, making some degree of cooperation with its neighbours necessary. But just what kind of cooperation and within what framework? That is the big debate taking place in Europe and Chancellor Schmidt will comment on it. I only wish to point out some important aspects of it.

Russia, too, is in an unprecedented situation. It has been left with borders unknown to it since Peter the Great. It is shifting from Stalinist economics to market economics under the aegis of the same people who ran the Stalinist economic system, hence it contains elements which make this evolution towards the market economy quite different from any which has transpired in the West. Russia is also seeking to establish democracy, at least it *claims* that it is seeking to establish democracy. We must remember that Russia is a country whose historical traditions, while seemingly related to those of

[C]

3

Reaching assessments with respect to these world conditions is especially difficult for the United States and other Western countries because - and I speak now for the United States - of our own special circumstances. In the United States, these have to do overwhelmingly with generational and technological considerations. There are presently three different generations with very different perspectives on foreign policy in the United States. There is my own generation, which grew up with the impact of World War II and of the twenty years after the war. It is a generation which believes that government can generate great constructions to overcome challenges and to build a world order that is, on the whole, successful and positive. Then there is the Vietnam generation, whose significant experience was a war which turned out to be unsuccessful. This generation, in true American fashion, transformed what might have been bad political judgement into a moral indictment of American society and policy. They would rather believe that America must, first of all, spend its energies in reforming itself and, secondly, to the extent that America engages itself internationally at all, that it must reform the rest of the world as well. There is an attendant tendency never to talk about political relationships and to carry on as if the American government were running a foundation and not a country. This generation's agenda is the democratisation of the world and it is always to their great amazement that this should contribute to considerable tension with other regions of the world - whose populations did not appoint America as the moral judge of their domestic politics or social arrangements. It is certainly one of the problems in America's relationship with China.

Finally, there is the new generation, which won the last election and which is not really very well understood abroad, partly because most of our newspapers are peopled by the products of the Vietnam period and they consider a conservative Republican victory an offence against nature and never more than a temporary phenomenon. Now I do not believe it is a temporary phenomenon. I belong to the Republican

[c]

4

At any rate, these are the three generations presently
operating side by side. And they do so, moreover, in an
environment which has witnessed a fundamental change in human
consciousness, one I believe to be as important as the
invention of printing. What I am referring to is the shift
from learning by reading to learning through pictures. My
generation was brought up on 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
in your mind the scene which the author is describing. When
you learn from pictures, you learn by impressions and do not
need to form concepts because they are already formed. The
tendency is to go from one impression to the next, with these
often being unrepeatable.

When learning from books, style is of some consequence; when
learning from a computer, style does not matter as much. All
this translates into changes in the very nature of our
politics. The printed word has become less important while
the picture has become nearly all-important.

[LC]

5

The present generation of American leaders is far more fragmented. They come mostly from the South, the Southwest and the West Coast and have no organic ties to other parts of the world or any particular knowledge of other parts of the world. To understand their mentality, I will describe an incident quite a while ago in the city of Omaha, Nebraska. It was at the height of the Cold War and I was giving a talk there during which I said something about the dangers of the Cold War. At the question period, somebody got up and said, "It is all very well to talk about the dangers but surely not to us here in Omaha. What could anyone possibly want from us in Omaha?" Yet the fact was that the Strategic Air Command was only three miles down the road, and if there was one sure thing it was that, in the event of a war, there were indeed people who might want something from Omaha even before they wanted Washington. But that had not penetrated into the consciousness of these people.

That is still in essence the American problem. Ten years ago the people who are now in power were advancing the U.N. as a means of curbing perceived American assertions of self-interest in the style of what they considered to be the tragedy of Vietnam. Today, these same people are advocating the U.N. as a way for America to play an international role. 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.

[LC]

6

attention is paid to personal relationships. Too often in America we hear that we must support this or that particular 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 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 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.

[L]

7

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. 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 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 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

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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 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.

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

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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 further - 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 Mexico what even a relatively small crisis can do.

Thank you.

WITH GINA'S EDITS

CYJ

Top Management Forum
London - June 1995

1

Dr. Henry Kissinger

It is a great pleasure for me to be here on a programme
with my old friend, Chancellor Helmut Schmidt. I want to
point out that the organisers are indeed representing every
point of view, from A to B, where you have Helmut and me on
the same programme. In the past I have usually agreed on major problems

I would like to speak at the international
environment. Though it will be short from the point of view
of the United States, 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 also had a certain simplicity. One could
look at it from a two-power perspective. Generally speaking,

WITH GINA'S EDITS

1

Dr. Henry Kissinger

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under the aegis of the same people who ran the Stalinist
economic system, hence it contains elements which make this
evolution towards the market economy quite different from any
which has transpired in the West. Russia is also seeking to
establish democracy, at least it claims that it is seeking to
establish democracy. We must remember that Russia is a
country whose historical traditions, while seemingly related
to those of the Western democracies, have nevertheless in the
political field been very different. By this I mean that
religion and the state were never separate, as they were
conceptually in Western society where the Enlightenment
imposed on it a unique character and where capitalism is an
ancient tradition. In Russia, capitalism never took hold and
that means that the preconditions which we associate with
Western democracy are absent from the Russian ethos.

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episode.

Reaching assessments with respect to these world conditions is especially difficult for the United States and other Western countries because - and I speak now for the United States - of our own special circumstances. In the United States, these have to do overwhelmingly with generational and technological considerations. There are presently three different generations with very different perspectives on foreign policy in the United States. There is my own generation, which grew up with the impact of World War II and of the twenty years after the war. It is a generation which believes that government can generate great constructions to overcome challenges and to build a world order that is, on the whole, successful and positive. Then there is the Vietnam generation, whose significant experience was a war which turned out to be unsuccessful. This generation, in true American fashion, transformed what might

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have been bad political judgment into a moral indictment of American society and policy. They would rather believe that America must, first of all, spend its energies in reforming itself and, secondly, to the extent that America engages itself internationally at all, that it must reform the rest of the world as well. There is an attendant tendency never to talk about political relationships and to carry on as if the American government were running a foundation and not a country. This generation's agenda is the democratisation of the world and it is always to their great amazement that this should contribute to considerable tension with other regions of the world - whose populations did not appoint America as the moral judge of their domestic politics or social arrangements. It is certainly one of the problems in America's relationship with China.

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