-4-

trumpet that will end all our difficulties. We will not be
that lucky, and we will not be successful in either of these
directions.

Our foreign policy now, and that of all industrial
democracies, is bound to have to concern itself with an
adjustment of relative balances. Our situation is complicated
by the fact that many in Europe have moved to positions that
they used to be considered primarily and peculiarly American, in the early postwar period --
naive reliance on positions that seek through the strenuous exercise of goodwill.
with adversaries and insistence
to remove objective difficulties, and that insist that there
be conclusive is a final proof of the evil intentions or aggression intentions
of potential opponents before one takes irrevocable or major
steps.

With this as a background, let me discuss a number of particular
issues and rather than give you my conclusions with respect
to them, let me state either the problems as I see them, or
some of the issues that need to be addressed, or some basic
principles of action. I was debating what one can respon-
sibly say about the Middle East. As a general proposition,
I do not believe that this is true for me
to make basic pro-
nouncements in detail about the Middle East. Fundamentally,
I think that all of us concerned with foreign policy should
support the Administration in attempting to get through the
difficult days and weeks that lie ahead. On the other hand,
I did not want to run for cover completely and I would like
to state a number of general observations.

-6-

In the Jordanian state. It must be a genuine Jordanian participation, in which Jordan will assume real responsibilities on the West Bank. Third, Israel must not identify its security with the annexation of all of the West Bank and Gaza, as I have said, but equally its security must not be defined simply in terms of recognition and normalization of relations with other countries. Fourth, it is important to understand for Israel and for all other countries that the dignity and self-respect of the Arab nations is an important factor and that proceeding simply by the creation of unilateral fait accompli is no basis for the conduct of foreign policy and even less for the relations among close allies. Fifth, it is also important for Israel's allies and other nations, irritated as they may be by individual acts of unilateralism and insensitivity, not to make confrontation the defining principle of their foreign policy. They must for a time with a narrow margin of survival, the dividing line between arrogance and panic, between self-assurance and hysteria, can be very narrow. In the face of all provocation I would urge some compassion and understanding and resumption of dialogue. In the weeks ahead I plan to

-7-

spell out my thinking on each of these points in greater detail. I think this is as far as I will go today, and I think the audience here can see that it is compatible with the main lines of the foreign policy that I believe the Administration is pursuing, even if as it evolves a different content may be given by different people to this or that proposition.

### *European-American Relations*

Let me now turn to European-American relations, which I am sure all the newsmen here have come to cover. I will be relatively brief. Some of the difficulties that exist between Europe and the United States -- it has been said at great length and repeatedly -- are due to the success of previous Western policies: (a) the recovery of Europe, (b) the corresponding growth of a sense of identity, and (c) the inevitable tendency that the continent which developed the concept of sovereignty was never going to find its purpose in sharing our burdens but in developing perceptions of its own. However one may explain it, there seems to be four major problems that must be solved.

First is the issue of military strategy. Others and I have talked about this at excruciating length. The facts are perfectly clear: the facts are that the strategy developed in the early 1950s cannot possibly continue into the 1980s. Perpetuating the theory that American strategic nuclear power can protect Europe against all contingencies inevitably will lead to a combination of unilateral disarmament, demoralization, and

-8-

a failure to build up conventional lack of buildup of the relevant forces. The issue has been ducked for fifteen years or hidden behind percentage figures of budgetary increase that never got to the heart of the problem of what strategy is really appropriate for the 80s and 90s. The only possible strategy is one that builds up conventional forces to resist foreseeable challenges. There are no short-cuts, there are no gimmicks. like renouncing the first use of nuclear weapons (which will have the inevitable consequence of stigmatizing the weapons on which the defense must still in part depend, will create dangerous retaliation. or creating the wrong impression that the West may accept a conventional defeat rather than in the end resort to nuclear weapons). But the converse (therefore) is not true. It is not true that we can continue to rely on essentially the strategy of the 50s and 60s, modified with a gimmick: here and a new technology there. That is the fundamental problem in strategy, and it underlies the arms control policies that must be related to it.

The second problem has to do with East-West relations.
We have now gone through a period of exuberant detente and
then we've gone through a period in which detente was made to
carry the burden for all the difficulties that were caused
by our domestic divisions on other subjects. It is now time
to deal with the question of how to conduct East-West relations
over an extended period of time, at a moment when the Soviet
Union is in enormous difficulty, when it is foreseeable that
some time in the 80s some Soviet leaders must ask themselves
the question of how much longer they can run an economy as

-9-

They must ask themselves how long they can go on a system, maintain a state that cannot manage a legitimate succession, of an economy that is assailed by shortages and surpluses at the same time, a problem that no Communist country has yet solved. At that point, a possibility for serious negotiations must arise, provided that we do not make the fact of negotiation an issue in our national debate, with one group considering any conference progress towards a settlement, and another group considering any meeting with Soviet negotiators as a pact with the devil. Our problem is to define what in a serious negotiation we would ask of the Soviets; what we ask of the Soviets, and, are prepared to pay in return for what we consider restrained international conduct; and, indeed, how we define restrained international conduct on both sides.

Now that requires, however, that we husband our assets. And it implies that we have to avoid unilateral concessions, either the unilateral disarmament, attempted to be imposed on us, or so many so-called peace movements, or the unilateral concessions in economic relations that in so many countries in Europe are identified with detente. Fundamentally what the Soviets want from us in economic relations is irreplaceable for them, irreplaceable elsewhere. It is food, it is technology, it is general know-how. What they pay in return is raw materials that are relatively easily replaceable, if they pay anything in return. In these circumstances, trade would have long since assumed rather minimal proportions were it not constantly fueled by concessional prices and concessional prices.

-11-

sixty years ago that the day would come when the capitalists
would fight with each other for the privilege of selling the
rope, which to hang them. What he didn't know is that they
would also offer credits to buy the rope.

The lesson to be drawn from the pipeline affair is not
by what face-saving formula we can end the immediate crisis --
which clearly, if rationality prevails, will be ended before
matters get totally out of control, but rather whether we
can use the pipeline crisis to have a fundamental agreement
among the industrial democracies about how they visualize
East-West economic relations, in the context that they are
prepared to have these relations, in support of a fundamental
negotiation, that they are also prepared to define for them-
selves and a fundamental negotiation that is not driven by
the need to placate public pressures on a year-to-year basis.
I suspect, if the various arms control proposals are analyzed
in detail, we will find that they are much too much driven by the
need to deal with immediate pressure groups and much too little
geared to the existing security situation.
by what we foresee in the middle 80s. What is true of arms
control is even more true of East-West economics.

Let me make a final point in this connection of European-
American relations. It is not possible, nor is it desirable,
that we pursue parallel policies all over the world, but it
is also not possible or compatible with the Alliance that
we agree on no major policy around the world. It seems to
me that we are perilously close to drifting into such a state
of affairs. In Central America one can only say that several

-14-

that I have no answer to this problem. I know that it cannot be dealt with by business as usual. Some kind of new financial structure, something like the Bretton Woods understandings, must emerge, and it can't go on forever without leading, if not to an economic crisis, to an unmanageable loss of confidence. All of these problems exist more acutely in the Western hemisphere than any place else. The Western hemisphere is also the area where American creativity can still make the biggest difference.

## Conclusion

I could go on to other problems, but I think I have made my fundamental point. My fundamental point is that inevitably when one speaks before a group like this, one emphasizes difficulties. If you analyze the difficulties I have described, they are all amenable to policy solutions by either the United States or by the industrial democracies taken together. If you analyze the difficulties which other parts of the world have, they require systemic changes. There is no way the Soviet system can solve its problems without some sort of constitutionalism by which leaders can be replaced, if not by democratic means, by some regular procedure. There is no way their economy can operate on the basis of total planning. And there is no way many of the developing countries can progress through the mixture of Marxism, third world radical rhetoric, and inefficient governments that now characterize them. I continue to maintain that we have a rare opportunity. We have the problem fundamentally of the reluctance to face the facts of power, to develop a calculus of dealing with the East. Americans of, incentives and penalties. We have a national reluctance to

-15-

up to the reality of only ~~and~~ permanent responsibilities.

face contingent answers. We are handicapped by a domestic
process in which decisions are made by adversary proceedings,
which gives a premium to each of the contenders for the
President's attention to exaggerate his position and creates
the concurrent temptation to settle each dispute by some
phraseology that either permits each party to do what ~~they~~ wanted
to do in the first place or which represents a sort of waffled
consensus. ~~All of these are real problems but all of these~~ are
~~problems we should know how to solve, and we, I think, are~~
getting better at it. I conclude, having begun with a Chinese saying,
with another Chinese saying that my friend Lee Kuan Yew told
~~He probably put me. (but he did it a little more eloquently ~~and I may have~~
confused screwed up in my recollection):~~ "When ~~I~~ there is turmoil under the
heavens, little problems are dealt with as if they are big
problems, ~~and~~ Big problems are not dealt with at all. When there
is order under the heavens, big problems are turned into little
problems, and little problems are seen in their right perspective."

I would submit to you that we have a unique chance to create
order under the heavens.

[Y]

Indent
quote

CSIS QUADRANGULAR CONFERENCE

Monday, September 20, 1982

Let me make a quick survey of a number of issues that I
see before us in the 80s. Let me introduce it with a phrase
that our Chinese friends used to use with us when we started
calling on them in the early 70s, the sort of phrase that if
a non-oriental makes to you you feel it doesn't make any sense
at all, but if an oriental says it you assume it hides enormous
profundities. The phrase was: "there is turmoil under the
heavens, but the situation is excellent." I must say on
many visits to China the meaning of that remark eluded me,
but since I didn't want to admit that there were limits to
my capacity to comprehend, I nodded sagely. The fact is that
I would describe the present situation as far as the United
States is concerned in somewhat similar terms. I think there
is turmoil under the heavens. If one looks at the underlying
factors, if the situation is not excellent it is malleable.
It is one of the periods in which creative policy can make
major progress and in which, almost any area of policy we
consider, the possibilities of new departures for creative
action seem very considerable indeed. In fact, I would say
one of the biggest problems we have is a psychological or
philosophical one. It is that the 80s are the first decade
in which the United States has to conduct foreign policy as
other nations have had to conduct foreign policy throughout

-2-

their history.

In the 1950s we represented some 52% of the world's gross national product. Under those circumstances, our foreign policy was really a question of identifying issues and overwhelming them with resources. Our allies were largely dependent on us and our adversaries needed primarily to be convinced that we meant business on whatever issue concerned us most. Every decade since then, the percentage of the gross national product represented by the United States of the world's total, has declined by some 10%.

Now the United States represents some 21 or 22% of the world's gross national product. It still makes us the single largest economic unit but it imposes on us necessities against which our historical tradition has rebelled. We now, for the first time in our history, face a situation in which if the whole rest of the world were to fall under hostile domination we would be clearly outmatched. Our policy from now on must have similarities to that pursued by Britain towards the continent of Europe through several centuries. It was a principle of British policy that a Europe united under one rule would be in a position to outmatch Great Britain and, therefore, Britain made itself the balancer of the European equilibrium, a role it fulfilled when it acted properly, rather unemotionally based on a rather cold assessment of the balance of power.

With respect to the rest of the world, we are in an

-3-

analogous position. Maintaining the equilibrium is no longer
a favor we do for other nations. It is an imperative of our
survival. The balance of power, decried as it is in international
textbooks, is not the end of our foreign policy but it has to
be the beginning of our foreign policy. Its requirements
have to be studied over an extended period of time, and what
is more, have to be carried out over an extended period of
time. It is characteristically American that every new
administration begins convinced not only that it will change
the world, but that it created the world. Sooner or later,
that process has to stop. Sooner or later, a consensus has
to develop, not on every tactical move we make on individual
issues, but on the fundamental requirements of our national
interest, reluctant as we are to think in terms of national
interest. There are many here who have heard me say it before,
the debate which we tend to carry on is still too much couched
in categories that imply that there are final solutions,
that there is a goal towards which we are working called
peace after which tensions presumably magically disappear.

There is too much of a division in our debate between the
psychiatric school of foreign policy that thinks relations
among nations are like relations among people and that
emphasize unilateral concessions and acts of almost personal
goodwill, and the theological school of foreign policy
that implies that the only reason the walls of Jericho have
not tumbled yet is because the right trumpet has not yet
been blown and that is engaged in a frantic search for the

-4-

trumpet that will end all our difficulties. We will not be
that lucky and we will not be successful in either of these
directions.

Our foreign policy now, and that of all industrial
democracies, is bound to have to concern itself with an
adjustment of relative balances. Our situation is complicated
by the fact that many in Europe have moved to positions that
used to be considered primarily and peculiarly American,
positions that seek through the strenuous exercise of goodwill
to remove objective difficulties and that insist that there
is a final proof of the evil intentions or aggression intentions
of potential opponents before one takes irrevocable or major
steps.

With this as a background, let me discuss a number of
issues and rather than give you my conclusions with respect
to them, let me state either the problems as I see them or
some of the issues that need to be addressed or some basic
principles of action. I was debating what one can respon-
sibly say about the Middle East. As a general proposition,
I do not believe that this is a time to make basic pro-
nouncements in detail about the Middle East. Fundamentally,
I think that all of us concerned with foreign policy should
support the Administration in attempting to get through the
difficult days and weeks that lie ahead. On the other hand,
I did not want to run for cover completely and I would like
to state a number of general observations.

-5-

First, I believe that the opportunity to make major progress towards peace in the Middle East has never been greater, despite the tragic events, the inexcusable events of the last few days, and despite the passions that preceeded it. The fact is that the Soviet Union has been demonstrated as being able to supply weapons but no solutions. That the countries of the rejectionist front, among the Arab countries, could define a rhetoric but no program. That on the other hand, the Israeli claim of being threatened must have been eliminated or strongly mitigated and that all nations must have learned that a continuation of this cycle of violence cannot possibly serve anybody's interest.

In taking advantage of this opportunity, I will state a number of principles in which I believe and over the course of the next few weeks I may elaborate on them but for today I will confine myself to those. First, the issue of the West Bank and Gaza, what the Israelis call Judea and Samaria, cannot be settled by annexation by Israel. This is not something derived from the Camp David Agreement; that has been a fundamental position of every American administration since 1967. It is in that context that the settlement policy should be considered. Second, the negotiating partner for this negotiation should be Jordan but, in defining this, it is important to define, as I will explain when I discuss European relations, what that means. It cannot mean that Jordan should be a mantle of legitimacy for a PLO entity that then becomes an incubus

-6-

in the Jordanian state. It must be a really Jordanian
participation in which Jordan will assume real responsibilities
on the West Bank. Third, Israel must not identify its
security with the annexation of all of the West Bank and Gaza,
as I have said, but equally its security must not be defined
simply in terms of recognition and normalization of relations.
Recognition of participants in a negotiation is the beginning
of wisdom in foreign policy. It is what all other nations
get for nothing. It is not something which entitles countries
to special consideration. In other words, the question of
security must be given a concrete content and therefore is a
legitimate subject of negotiation, even if it cannot be pushed
to the point of annexation. Fourth, it is important to under-
stand for Israel and for all other countries, that the dignity
and self-respect of the Arab nations is an important factor
and that proceeding simply by the creation of unilateral
fait accomplis is no basis for the conduct of foreign policy
and even less for the relations among close allies. Fifth,
it is also important for Israel's allies and other nations,
irritated as they may be by individual acts of unilateralism
and insensitivity, not to make confrontation the defining
principle of their foreign policy and to keep in mind that
for nations with a narrow margin of survival, the dividing
line between arrogance and panic, between self-assurance
and hysteria, can be very narrow. In the face of all
provocation I would urge for some compassion and understanding
and resumption of dialogue. In the weeks ahead I plan to

-7-

spell out my thinking on each of these points in greater
detail. I think this is as far as I will go today and I
think the audience here can see that it is compatible with
the main lines of the foreign policy that I believe the
Administration is pursuing, even if as it evolves a different
content may be given by different people to this or that
proposition.

Let me now turn to European-American relations, which
I am sure all the newsmen here have come to cover. I will be
relatively brief. Some of the difficulties that exist between
Europe and the United States -- it has been said at great
length and repeatedly -- are due to the success of previous
Western policies: to the recovery of Europe, to the corres-
ponding growth of a sense of identity and to the inevitable
tendency that the continent that developed the concept of
sovereignty was never going to find its purpose in sharing
our burdens but in developing perceptions of its own. However
one may explain it, there seems to me four major problems
that must be solved.

First is the issue of military strategy. Others and I
have talked about this at excruciating length. The facts are
perfectly clear. The facts are that the strategy developed
in the early 1950s cannot possibly continue into the 1980s.
The theory that American strategic nuclear power can protect
Europe against all contingencies inevitably will lead to a
combination of unilateral disarmament, demoralization and

-8-

[Y]

lack of buildup of the relevant forces. The issue has been
ducked for fifteen years or hidden behind percentage figures
of budgetary increase that never got to the heart of the
problem of what strategy is really appropriate for the 80s
and 90s. The only possible strategy is one that builds up
conventional forces to resist foreseeable challenges. There
are no short-cuts, there are no gimmicks like renouncing the
first use of nuclear weapons which will have the inevitable
consequence of stigmatizing the weapons on which the defense
must still in part depend. Or creating the wrong impression
that the West may accept a conventional defeat rather than
in the end resort to nuclear weapons. But the converse, there-
fore, is not true. It is not true that we can continue to
rely on essentially the strategy of the 50s and 60s, modified
with a gimmick here and a new technology there. That is the
fundamental problem in strategy and it underlies the arms
control policies that must be related to it.

The second problem has to do with East-West relations.
We have now gone through a period of exuberant detente and
we've gone through a period in which detente was made to
carry the burden for all the difficulties that were caused
by our domestic divisions on other subjects. It is now time
to deal with the question of how to conduct East-West relations
over an extended period of time at a moment when the Soviet
Union is in enormous difficulty, when it is foreseeable that
some time in the 80s some Soviet leaders must ask themselves
the question of how much longer they can run an economy as

-9-

unbalanced as the one that they now contain. Of a state that
cannot manage a legitimate succession, of an economy that is
assailed by shortages and surpluses at the same time,
a problem that no communist country has yet solved. At that
point, a possibility for serious negotiations must arise,
provided that we do not make the fact of negotiation an issue
in our national debate with one group considering any conference
progress towards a settlement, and another group considering
any meeting with Soviet negotiators as a pact with the devil.
Our problem is to define what in a serious negotiation we would
ask of the Soviets and are prepared to pay in return for what
we consider restrained international conduct, indeed, how

we define restrained international conduct on both sides.
Now that requires, however, that we husband our assets and it
implies that we have to avoid unilateral concessions, either
the unilateral disarmament attempted to be imposed on us by
so many so-called peace movements, or the unilateral concessions
in economic relations that in so many countries in Europe are
identified with detente. Fundamentally what the Soviets
want from us in economic relations is irreplaceable for them,
irreplaceable elsewhere. It is food, it is technology, it is
general know-how. What they pay in return is raw materials
that are relatively easily replaceable, if they pay anything
in return. In these circumstances, trade would have long
since have assumed rather minimal proportions were it not
constantly fueled by concessional prices and concessional

-10-

[Y]

credits. It will seem incomprehensible to future generations
that the West was not able to develop a coherent East-West
economic policy and that it was not able to exact a political
quid pro quo for the economic benefits it was unilaterally
bestowing on the Soviet Union. I do not think that the timing
and the tactics of the pipeline decision will go down in
history as classic examples of modern diplomacy. I do believe
that the questions raised by the pipeline decision were im-
portant questions and I think that the self-righteous reaction,
the confrontational reaction of so many of our allies hiding
behind allegations that they were simply carrying out obligations
and making debating points that since we were selling grain
they had a right to sell the pipeline. Everybody knows that if
we stopped selling grain tomorrow the pipeline would still go
forward. The question raised was fundamental. Incidentally,
I am not a wild supporter of the grain sales, either. I do
not join those who believe that an economic boycott of the
Soviet Union can bring about a collapse of the Soviet system.
I do not believe it should be the strategy of the West to aim
for a collapse of the social system though I would not go into
mourning if this happened. I do believe that the Soviet Union
understands best a negotiation on the basis of strict reciprocity
and I think it is a failure of western leadership that we have
not been able to define for ourselves either what it is we want
from the Soviet Union in the political field or that we have
not been able to agree among each other on credit policies and
pricing policies that are in the common interest. Lenin said

-11-

sixty years ago that the day would come when the capitalists
would fight with each other for the privilege of selling the
rope which to hang them. What he didn't know is that they
would also offer credits to buy the rope.

The lesson to be drawn from the pipeline affair is not
by what face-saving formula we can end the immediate crisis
which clearly, if rationality prevails, will be ended before
matters get totally out of control, but rather whether we
can use the pipeline crisis to have a fundamental agreement
among the industrial democracies upon how they visualize
East-West economic relations in the context that they are
prepared to have these relations in support of a fundamental
negotiation that they are also prepared to define for them-
selves and a fundamental negotiation that is not driven by
the need to placate public pressures on a year-to-year basis.
I suspect if the various arms control proposals are analyzed
in detail we'd find that they are much too much driven by the
need to deal with immediate pressure groups and much too little
by what we foresee in the middle 80s. What is true of arms
control is even more true of East-West economics.

Let me make a final point in this connection of European-
American relations. It is not possible nor is it desirable
that we pursue parallel policies all over the world but it
is also not possible or compatible with the Alliance that
we agree on no major policy around the world. It seems to
me that we are perilously close to drifting into such a state
of affairs. In Central America one can only say that several

-12-

European policies are deliberately designed or have the practical consequence of undercutting what we are attempting to do. I am not saying that we are inevitably right, but I do maintain that when a major country acts in an area it considers of vital importance, its allies owe it some respect for its views as we attempted to show in the Falkland crisis vis-a-vis Great Britain. And we see it again in recent weeks with respect to the Middle East. A fundamental proposition of the President's speech seems to me to have been the introduction of Jordan into the negotiations. How can that process possibly be helped when PLO leaders are feted all over Europe and their status is enhanced before anybody has seen even the slightest indication of what conclusions they have drawn. Why is it so impossible for us and the Europeans at least to discuss our assumptions and how can it fail to lead to a fundamental rupture, sooner or later, if totally different strategic conceptions are simultaneously pursued?

Let me make a few quick observations about Latin America. Of all the areas in the world the one that may present us the most intractable problems, the one in which my opening phrase of turmoil and an excellent situation may be least true is Latin America. We have seen in Mexico the impact of economic crisis on the political orientation of a country and the temptation to use foreign opponents as a means of rallying opinion. In the aftermath of the Falkland crisis, many Latin American countries are undergoing

-13-

a re-examination of their orientations: The military, because they feel they can no longer count on the unquestioning support of the United States with a resulting tendency toward a kind of populism. The radicals, because their relative position has been strengthened. The moderates, because the OAS system is clearly in need of re-examination. And all of them because the international economic structure and in any rate, the international financial structure no longer has a fundamental framework for resolving its difficulties. Few people invite me to speak about economic problems, to their great loss, but they can't keep me from mentioning them once I have a rostrum. I think the comparison of domestic debt with foreign debt is going to prevent any serious examination of the issues.
I believe that the argument that foreign governments can be made credit-worthy by austerity measures the way domestic debtors can be made credit-worthy by self-discipline misunderstands the nature of many developing societies. In a developed country, IMF conditionality often enables governments to provide an alibi for what they would like to have done anyway. In many developing countries, conditionality may be a cure worse than the disease because it may not be sustainable by the political process and may bring about revolutionary conditions which will magnify all the difficulties that are attempted to be solved, or it creates a kind of cynicism in which the conditions are accepted and never carried out and then provide a rallying point for extreme nationalism later on. I will make for me the historic statement

-14-

[Y]

that I have no answer to this problem. I know that it cannot be dealt with by business as usual. Some kind of new financial structure, something like the Bretton Woods understandings much emerge and it can't go on forever without leading if not to an economic crisis, to an unmanageable loss of confidence. All of these problems exist more acutely in the Western hemisphere than any place else. The Western hemisphere is also the area where American creativity can still make the biggest difference.

I could go on to other problems but I think I have made my fundamental point. My fundamental point is that inevitably when one speaks before a group like this one emphasizes difficulties. If you analyze the difficulties I have described they are all amenable to policy solutions by either the United States or by the industrial democracies taken together. If you analyze the difficulties other parts of the world have, they require systemic changes. There is no way the Soviet system can solve its problems without some sort of constitutionalism by which leaders can be replaced, if not by democratic means, by some regular procedure. There is no way their economy can operate on the basis of total planning. And there is no way many of the developing countries can progress through the mixture of Marxism, third world radical rhetoric and inefficient governments that now characterize them. I continue to maintain that we have a rare opportunity. We have the problem fundamentally of the reluctance to face the facts of power, of making a calculus of incentives and penalties. We have a national reluctance to

-15-

face contingent answers. We are handicapped by a domestic
process in which decisions are made by adversary proceedings
which gives a premium to each of the contenders for the
President's attention to exaggerate his position and creates
the concurrent temptation to settle each dispute by some
phraseology that either permits each party to do what they wanted
to do in the first place or which represents a sort of waffled
consensus. All of these are real problems but all of these are
problems we should know how to solve and we, I think, are
getting better. I conclude, having begun with a Chinese saying,
with another Chinese saying that my friend Lee Kuan Yew told
me (but he did it a little more eloquently -- I got it a little
screwed up in my recollection): /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, big problems are turned into little
problems and little problems are seen in their right perspective.

CSIS QUADRANGULAR CONFERENCE

Monday, September 20, 1982

-2-

[Y]

their history.

-3-

-4-

Our foreign policy now, and that of all industrial
democracies, is bound to have to concern itself with an
adjustment of relative balances. Our situation is complicated
by the fact that many in Europe have moved to positions that
used to be considered primarily and peculiarly American,
positions that seek through the strenuous exercise of goodwill.
to remove objective difficulties and that insist that there
is a final proof of the evil intentions or aggression intentions
of potential opponents before one takes irrevocable or major
steps.

-5-

First, I believe that the opportunity to make major progress towards peace in the Middle East has never been greater, despite the tragic events, the inexcusable events of the last few days, and despite the passions that preceded it. The fact is that the Soviet Union has been demonstrated as being able to supply weapons but no solutions. That the countries of the rejectionist front, among the Arab countries, could define a rhetoric but no program. That on the other hand, the Israeli claim of being threatened must have been eliminated or strongly mitigated and that all nations must have learned that a continuation of this cycle of violence cannot possibly serve anybody's interest.

-6-

[4]

-7-

-8-

-9-

-10-

-11-

-12-

-13-

-14-

that I have no answer to this problem. I know that it cannot
be dealt with by business as usual. Some kind of new financial
structure, something like the Bretton Woods understandings much
emerge and it can't go on forever without leading if not
to an economic crisis, to an unmanageable loss of confidence.
All of these problems exist more acutely in the Western hemis-
phere than any place else. The Western hemisphere is also the
area where American creativity can still make the biggest
difference.

I could go on to other problems but I think I have made
my fundamental point. My fundamental point is that inevitably
when one speaks before a group like this one emphasizes diffi-
culties. If you analyze the difficulties I have described
they are all amenable to policy solutions by either the
United States or by the industrial democracies taken together.
If you analyze the difficulties other parts of the world have,
they require systemic changes. There is no way the Soviet system
can solve its problems without some sort of constitutionalism by
which leaders can be replaced, if not by democratic means, by
some regular procedure. There is no way their economy can
operate on the basis of total planning. And there is no way
many of the developing countries can progress through the
mixture of Marxism, third world radical rhetoric and inefficient
governments that now characterize them. I continue to maintain
that we have a rare opportunity. We have the problem fundamentally
of the reluctance to face the facts of power, of making a calculus
of incentives and penalties. We have a national reluctance to

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face contingent answers. We are handicapped by a domestic
process in which decisions are made by adversary proceedings
which gives a premium to each of the contenders for the
President's attention to exaggerate his position and creates
the concurrent temptation to settle each dispute by some
phraseology that either permits each party to do what they wanted
to do in the first place or which represents a sort of waffled
consensus. All of these are real problems but all of these are
problems we should know how to solve and we, I think, are
getting better. I conclude, having begun with a Chinese saying,
with another Chinese saying that my friend Lee Kuan Yew told
me (but he did it a little more eloquently -- I got it a little
screwed up in my recollection): /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, big problems are turned into little
problems and little problems are seen in their right perspective.
I would submit to you that we have a unique chance to create
order under the heavens.