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The Great US Foreign Policy Flaw

By failing to recognize why national self-determination is important, the US hinders global economic and social progress

Of all the misunderstandings that guide US foreign policy – including foreign commercial policy – perhaps the most important and long-lasting is the failure to recognize or understand what national self-determination means to most people in the world. Or why it might be important to them. Our leaders seem to have learned very little since their disastrous war in Vietnam, which ended 35 years ago.

The cynical would say that America's leaders do understand these things, but don't care. However that would not explain why President Obama would go to Afghanistan and humiliate President Karzai, in a way that was sure to alienate the government that Washington wants to work with, and its supporters.

Karzai reacted angrily: "In this situation there is a thin curtain between invasion and cooperation-assistance," he said last week. He also warned that the insurgency "could become a national resistance."

Of course, Washington's problem with the Afghan government does not really have so much to do with corruption, as Obama lectured Karzai about – just look at the billions of dollars that the US government continues to slather on corrupt governments all over the world, from Pakistan to Colombia. It is more that Karzai wants to negotiate a peace agreement with the Taliban insurgents, while Washington – especially the Pentagon – wants to pull off something it can claim as a "military victory" before that happens. It remains to be seen how many people, including civilians, will die needlessly before the Afghan government's preferred strategy of negotiations is allowed.

But the problem is much more general and extends to US foreign policy throughout the world. Washington claims to support "democracy", but democracy without self-determination is a very limited form of democracy. It is a great irony that Latin America, for example, had more self-determination in the realm of economic policy from 1950 to 1980, when much of the region lived under dictatorships, than it had after formal democracy became widespread. Not surprisingly, the region's economy grew enormously faster between 1950 and 1980 than it has in the last 30 years, when "Washington consensus" economic policies became the norm.

Fortunately the Latin American electorate did not conclude from this experience that dictatorship was better than democracy. Instead, over the last decade they decided that they needed more democracy, the kind that includes national self-determination and economic policy making that benefits their own countries and also the majority of their citizens. Bolivia took control over some of its most important natural resources – especially hydrocarbons – and now has an extra 20% of GDP that the government has been able to spend for economic and social development. (For comparison, 20% of GDP is the average amount of the entire federal budget in the United States over the last 40 years). Bolivia also now has an independent foreign policy, where it can play a leading role on issues of great importance to the country, such as climate change.

In 2001 Argentina defaulted on its massive foreign debt and changed its economic policies, getting rid of the Washington-controlled IMF in the process. There is no question that they were also better off for this move, with the economy growing 63% in the ensuing six years. Venezuela is another example of a government that was able to grow very rapidly after getting control over its national oil industry in 2003, and to greatly expand access to health care and education. It has also used its oil wealth to help other countries in the hemisphere (including the poorest, Haiti, where it has apparently pledged more money than the US government for relief and reconstruction; and the richest, the United States, where it has donated tens of millions of dollars annually in the form of discounted heating oil to low-income Americans). Ecuador's left, nationalist government has doubled spending on healthcare, got rid of a third of its foreign debt through default, and has refused to cave to US pressure on the multi-billion lawsuit of Ecuadorians against oil giant Chevron for pollution of ground waters. There are numerous other examples that could be cited from "pink tide" governments that now govern most of Latin America.

Of course, national self-determination also matters in countries that do not have democratic governments. China has had the fastest-growing economy in world history over the last three decades, pulling hundreds of millions of people out of poverty despite widening inequality. As economists Nancy Birdsall, Dani Rodrik, and Arvind Subramanian have noted, this would not have happened (pdf) if China had pursued "a garden-variety World Bank structural adjustment program in 1978 instead of its own brand of heterodox gradualism."

And Vietnam, another country ruled by a communist party, has also had one of the world's fastest growing economies since it got rid of the American troops 35 years ago. Over the past three decades its income per person has more than quadrupled.

The hope is that these countries will become more democratic as they increase their living standards and education. But in any case they still illustrate one of the reasons – which is not intelligible to most of Washington – why people might care so much about national self-determination.

By facing off squarely against one of the most important political forces of the 20th and 21st centuries, Washington is not only placing itself on the wrong side of history. It is guaranteeing that the United States will be involved in any number of "long wars", indefinitely, and generally slowing the pace of economic and social progress in the world.

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