NOV. 07 '84 19:22 KISSINGER ASSOCIATES, WASH. DC

TRANSCRIPT OF REMARKS BY HENRY A. KISSINGER
at
The American Stock Exchange Conference

Wednesday, November 7, 1984

Mayflower Hotel - Washington

I understand you've heard yesterday from my friend, Joane Kirkpatrick, which proves that every point of view is represented in this conference from A to B. She has given you the position of the Administration. What I will attempt to do is talk to you, as a supporter of the Administration, about some of the conceptual problems America has in the conduct of foreign policy.

First of all, let me begin by saying in my view, President Reagan has a really unusual, perhaps historic, opportunity in shaping American foreign policy over the next 4 years.

For one thing, he is the first second-term president we have had in a generation (or at any rate, second-term president who will serve out his term). He can run for history. He is not running for another election. Secondly, the foreign

NOV. 07 '84 19:23 KISSINGER ASSOCIATES, WASH. DC

policy will have to be conducted under conditions that provide
unusual opportunities as I will explain shortly. I think the
Soviet Union will not be able to avoid a process of internal
adjustment, and that process itself is going to produce a need
for negotiation.

As one looks around the world, while one can see many trouble
spots, there is really none that is not manageable by the concerted
action of democracies. It is rare that an administration has
such an opportunity. But it is also true that America as a
society has been divided for 15 years, at a minimum, about
what exactly the subject matter of foreign policy is supposed
to be. The reason for that is that there is very little
historical experience in the conduct of foreign policy in the
United States. In Britain, for 250 years it was an absolute
axiom of foreign policy that Britain had to maintain the
balance of power on the European continent, regardless of
the merits of the governments involved, because a united

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Europe would outmatch Great Britain. That was never challenged in British domestic politics. It was an axiom of British foreign policy that the port of Antwerp must not be in the hands of a great power because, protected by the mouth of the Scheldt River, it would permit the creation of a navy that could challenge British supremacy on the seas. In other words, there were national security objectives that were recognized as legitimate and that were not contested.

The United States has not had a comparable experience. We like to believe that we were projected into world affairs in 1945 and in a technical way, this is true. But in practice, the situation in 1945 was one of atomic monopoly for the United States and economically, as late as 1950 we produced 52% of all the goods and services of the entire world. In these conditions, for us the solution of foreign policy problems was a matter of allocation of resources. It was not an issue of equilibrium, of security in its relative sense, of balance of power, and of all the ingredients which have made up foreign

policy in other less favored societies. It was a tragedy
that the end of this physical preeminence coincided with the
Vietnam war, so that we could never face it as a philosophical
issue, but had to confront it in the midst of a conflict that
was followed by a constitutional crisis. And one of the great
achievements of the current administration is that it has
brought to an end that particular period of divisiveness.

To me, who travels a great deal abroad, it is very interesting
that most foreigners that I know who were extremely skeptical
about President Reagan and what he represented when he came
into office and might not be wildly enthusiastic even today,
nevertheless, in my circle of acquaintances, I had the impression
that the overwhelming majority of those who depend on us
abroad preferred a victory of this administration over its
alternative. I don't say this as a partisan comment. This
election is over. I say this as a fact of the importance of
a steady and strong America to many peoples around the world.

Now this opportunity, however, faces the problem that in

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our domestic debate, foreign policy problems are typically discussed as if they were aberrations, not as if they were part of a continuing process. The objective of foreign policy is usually stated to be peace, conceived as a static condition, in which the need for effort disappears and the world lives with a consciousness of harmony. There is an enormous reluctance to accept the proposition that we are involved in an endless process which we can improve, which we can reduce the dangers of war, and enhance the possibilities of cooperation, but in which it can never be said that as of this moment we live in a static condition that returns us to the isolationist's innocence. And it was this yearning for innocence, this insistence on identifying action not only with perfection but with abstract morality that produced many of the bitter controversies over several administrations of the last 15 years. How often does one hear in our domestic debate that we should emphasize diplomacy and not power. Now of course the relative mix of instruments of foreign policy is always a

NOV. 07 '84 19:26 KISSINGER ASSOCIATES, WASH. DC

Subject for debate and for judgment. But, to believe that there is a category labeled negotiation, with a capital N, and another one labeled power, with a capital P, and that you have the choice between one or the other is unreal. In the real world negotiations result, as they must in your experience, out of a balancing of incentives and penalties. And it is that balance that provides the incentive for maintaining an agreement.

Time and again the impression is created that we defend a country because there is some legal document that says we should do so. So, at the beginning of many crises you will find the debate over what is our legal obligation? The impression is created that the first person that the President should call when something goes wrong in the world is his lawyer to find out what his penalties are if somebody takes him to court. But the fact of the matter is that we assist other nations not because there is a legal document that says so, but because there is a perception of the national

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interest that requires us to do so. We either help another
nation because we believe that we should in our own interest
or no legal document is going to provide an impetus. In all
these endless NATO debates of what we are obliged to do in
what circumstances, nothing will supply as much assurance as
a common perception of shared dangers and shared interests,
and no document is going to be able to prevail against the
absence of this.

It is this view that accounts for some of the peculiarities
of our domestic debate. Time and again, you find descriptions
of negotiations which are put forward as if diplomacy were a
detective story in which the other side throws out vague clues
and we have to guess at the answer. And if we miss the answer
then we have committed an irrevocable error. Anybody who knows
especially communist negotiators knows this is an absurdity.
Throughout the Vietnam war hoards of well-meaning Americans
would come to the Vietnamese in Paris and be fed little tidbits.
And since the assumption of many is that we're always governed

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by idiots, it was assumed that those of us in government
at the time had somehow missed the point and we needed strenuous
instruction because there was a great opportunity for a break-
through. We have seen in recent years, those of you who
followed the esoteric debate on the intermediate missiles,
there is the myth of the walk-in-the-woods in which the American
negotiator and the Soviet negotiator allegedly agreed on some-
thing which, because Washington didn't pick it up immediately,
lost an irremediable opportunity. Now I was not present in the
walk-in-the-woods but the mere fact that that Soviet negotiator
returned to Geneva rather than run some minor power plant in
Siberia suggests to me that it is highly improbable that it
happened quite that way. The Soviet middle-level diplomat
who can settle issues on his own has not yet been invented.
And in any event, anybody who has dealt with the Soviets knows
that if they want to negotiate, nothing can drive them away
from the conference table. And if they want not to negotiate
they will find many pretexts.

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For a year we had a great debate in this country whether
President Reagan's comment that the Kremlin was the focus of
evil was the proximate cause of Soviet unhappiness with the
United States. Now I probably would not have drafted the speech
exactly that way, perhaps because in German it doesn't sound
as well as in English, but the idea of these tender Soviet
were
leaders/offended by a single phrase in a presidential speech to
a group of clergymen where, after all, the problem of good and
evil comes up more or less naturally, that that would have
created an irreparable breach shows a total misapprehension of
how diplomacy is conducted and how the Soviet system works.
If one takes any month's issues of Pravda at random, one will
find daily more critical comments of the United States than
this single comment.

Now I mention all these things to indicate that we have
a philosophical problem. We have a problem also of restoring
bipartisanship. Now that is usually conceived as restoring
unity between Republicans and Democrats. But I would argue

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that within each party, and at this moment especially within
the Democratic party, there are profound divisions as to the
nature of foreign policy, as to the direction in which this
country should go, and that these have to be healed in addition
to the necessity of creating a bipartisan consensus. The
reason we need a greater bipartisan (phase?) is
this: it cannot go on that every 4 or 8 years foreign leaders
have to watch this spectacle of the United States promising
itself a total reassessment of its foreign policy. You cannot
uproot the trees every 4 years to see whether the roots are
still there. And for foreign leaders, the mere fact that
every time a new administration comes in there is a total
reassessment of our policy means that they are jeopardizing
their domestic position by gearing their actions to ours.
This is the need in an overall sense and I believe that no
president in a generation has had the same opportunity to deal
with it as President Reagan.

Now we must deal with it also because, as I have said, I

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think we have a major opportunity in negotiations with the
Soviet Union. When Gromyko visited President Reagan during the
electoral campaign there was a great deal of speculation in
our press whether President Reagan had succeeded in reassuring
Gromyko whether a breakthrough had been accomplished and what
concrete results had been achieved. It is a classic illustration
of the kind of thinking that we have to transcend. The most
significant event of the Gromyko visit was when he put his toe
across the threshold of the Oval Office. That signified 2
things: 1) That the Soviet Union had conceded the election
to President Reagan. He would never have done this if they
thought they could influence the election by maintaining an aloof
posture. 2) Secondly, it signified that despite all the
rhetoric of the last few years (or last year), the Soviet Union
had made the decision to attempt to negotiate, or he would never
have come. After that nothing could happen. No Soviet leader
can emerge from the Oval Office and say I have just met the
most charming man that I have encountered and I am going to go
home and make recommendations for concessions that I had not

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previously considered. To the Soviets, foreign policy emerges from what they consider objective conditions, the structure of society, the global equilibrium, and similar matters. The Soviet Union insists that personal relations among leaders have nothing to do with it. They do not accept the American nostalgia that in reality foreign policy is a subdivision of psychiatry. So the reason negotiations have started is that the Soviet Union has a structural crisis and an economic crisis -- a structural crisis because in the 70th year of Soviet rule, there is still does not exist a constitutional method for transferring power. I don't mean democratic, I mean constitutional in the sense of a modern cooperation where obedience is exacted by the position and not by personal loyalty. In the Soviet system, all top leaders except one have died in office and the one who did not made the mistake of going on vacation without his colleagues. Nobody has ever been replaced in a normal method. So you now have a Politburo 8 of whose members are approaching 80. And none of whom are prepared to leave office, and yet every Soviet bureaucrat knows

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one; that some succession is the next years on a substantial
scale will be exacted by nature, and secondly: that his position
will depend on how he plays himself in a struggle whose participants
he probably doesn't even know. We certainly don't know them.
So, they need a respite or take the economy. Imagine an economy
in which the cost of nothing is known and in which all prices
are established by a central planning mechanism. Imagine
running a country twice as large as the United States in which
there are no markets at all to tell you what anybody's preferences
are. It is no surprise that Andropov, when he succeeded
Brezhnev, made his inaugural address not on a the speech
of a vision for the future, but on the theme that we must stamp
out malingering, going to bath houses on working time, eliminating
drunkenness -- which alone is a heroic effort, and ending
corruption. It is not exactly an inspiring program. I had
a friend who said let us all pray for his success because
if corruption stops the whole economy must come to an end.

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But that is the problem. The problem is that you cannot
run an economy by central planning and you may not be able
to run a communist state without central planning. Only China
has made a philosophical break and it has major transitional
difficulties. And then when you see these strange phenomena
in Poland where for the first time in a communist state the head
of government has attacked the security services and has taken
over the security services for, what has after all has not been
the most unusual event in communist countries, namely the
disappearance of an opponent, then you see major structural
problems.

On their side, there will be, however, a number of problems.
The first of these problems, and the most important, is that the
very pressures that produce the need for negotiation may also
make it very difficult to find a solution to the problems being
negotiated. The very people who want a respite may not be
able to agree among each other as to what precise adaptations
of their position they may want to make. And if they are con-
fronted by the Western masochism that blames every deadlock

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on our shortcomings they will have a temptation to create deadlocks to see what new concessions they can elicit.

On our side, there is the importance of the willingness to be concrete. We must avoid the kind of division in our country (or transcend the kind of division) in which there is one group that seems to favor any agreement for its own sake, regardless of its content, and that of another group that is distrustful of the Soviets to an extent that they think any agreement they are going to sign must, by definition, be unfavorable to us. Now it stands to reason that no country will sign an agreement from which it doesn't promise itself some benefit. The issue is not whether the negotiating partner benefits, but whether we do, and whether the balance of benefits is on the whole advantageous to our purposes. But this requires some precise conception of what it is we're trying to do.

Take arms control. The fact about arms control is that the ideas of the 50s and early 60s which produced the impetus for

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arms control negotiations for 2 decades, no longer fit the
current technological realities. The dominant positions neither
of them really deal with the problem. The advocates of the nuclear
freeze say the world is horribly dangerous and capable of destroying
itself, therefore let's keep it exactly as it is. And the
effort to negotiate what a freeze is on existing weapons
would take more time than the achievement can possibly be worth.

The advocates of reduction have also not faced what I take
to be the fundamental problem. So long as deterrence is based
on totally unopposed offensive forces, arms control can only
make a marginal contribution to security. So long as each
side can calculate the massive destruction of civilians without
having to consider any counter measures whatever it becomes
a mathematical problem. Supposing the 25,000 nuclear warheads
on each side now were reduced to 10,000 or 5,000 -- which is
still twice as many as Kennedy had at the time of the Cuban
Missile Crisis when he thought he was facing Armageddon. You
still would not have solved the fundamental problem. We cannot
avoid a dispassionate analysis of the relations between offensive

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WASH. DC

and defensive weapons and the relationship of those to arms
control strategy. That cannot be done with slogans, with
placards, and with self-righteous assertions. This is at the
heart of what will be inevitable and in my view possibly highly
useful negotiations.

And so it is in many other fields. In Central America, for
example, we face a conceptual problem before we face a practical
problem. The conceptual problem is: does the United States
have any national interest anywhere in the world that is worth
defending? And is that in Central America? Or how close does
it have to be to the United States before it becomes a vital
national interest. And if it is a vital interest what is it:
is it MIG-21s in Nicaragua, is it a communist regime in Salvadore,
is it 10,000 Cuban advisors, what exactly is it? What is it
we are trying to achieve?

As Chairman of a bipartisan commission, I must tell you
its experience, whatever you think of its results, at least
shows that the problem that I mentioned of the need of bipartisanship

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in this country is soluable. When President Reagan asked me to chair that commission I thought that agreement was impossible, and maybe those who recommended me did so because they thought so too. But, in an election year, such well-known admirers of the incumbent President as Lane Kirkland, the President of the AFL-CIO; the former Chairman of the Democratic National Committee; and other leading Democrats joined with leading Republicans on a bipartisan set of recommendations which, of course, as the Chairman I strongly support. But their merit is not at issue, although I think they are the only basis on which progress can be made. The key issue is that the principal objective that I stated originally is therefore in my view achievable.

I personally believe that the minimum objective in any negotiations in Central America must be the elimination of foreign military and intelligence advisors, the reduction of armed forces to levels that existed in 1980 on all sides, and a reduction to very low levels on the import of foreign arms. If that is not achieved, no non-aggression treaty can possibly work. It will

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only lead to a brief hiatus.

But the major point I wanted to make to this group is
this: we have through good fortune and some good policies,
we are now all of us in the West in an unusually good position.

I would define the quality of that position this way. Every
problem that one can define on our side can be ameliorated
and in some cases solved by policy decisions. Almost every
problem on the other side requires structural reform. So

the message I want to leave with you is that there are very
few groups of people who can say that the solution of their
problems is largely in their own hands. I have a Chinese
acquaintance who claims that there exists the following

Chinese proverb (I say claims because I don't believe that
half of the Chinese proverbs that I mention really exist --
they are invented to enhance our natural sense of inferiority):

When there is turmoil under the heavens, little problems are
dealt with as if they are big problems; big problems are not
dealt with at all. When there is order under the heavens,

WASH. DC

big problems can be reduced to little problems and little
problems need not preoccupy us. I am convinced that our
opportunity is that we can reduce a lot of big problems
to little problems.

Q&As follow - NOT Transcribed yet