Diplomacy & Crisis News

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The United States maintains a technological edge in defensive technology and capability, but our Achilles' heel might be our industrial base.

In a recent war game run by the Center for Strategic and International Studies, the United States ran out of missiles against China within days of conflict breaking out. This has been echoed in the Ukraine-Russo War, as manufacturers struggle to fill the massive demand. On top of that, defensive firms often fragilely rely on one manufacturing plant. Attempts to revive supply have been slow. Meanwhile, the shipyards can’t build even two destroyers a year, citing supply chain issues and labor shortages. One can be all for developing cutting-edge projects like the B-21 bomber, but there’s something to be said for mass—possessing more than enough quantity of cruise missiles, rockets, and bombs. All this should serve as a warning that we may simply not have the industrial base to support a protracted conflict.

This realization comes at a critical time as China’s single-minded obsession with submerging Taiwan under its rule threatens to cause massive global disruptions. Taiwan is a doorstep to the all-important shipping lanes and is the main producer of semiconductors, which practically every industry relies on. Washington would be under immense pressure to enter the war if China decided to invade.

To prevent this, American diplomacy needs teeth. The lethality of the U.S. military should be unquestioned by our adversaries as generations ahead of their own. Making this possible means that a robust industrial and technology sector is not only an issue of jobs, but of national defense.

Lawmakers are aware of the problem, but so far, their response has been misguided. Much of it has been reactive, seemingly stemming from a panic of watching China spend massive amounts on subsidies. We try to “keep up with the Jones” and mimic their actions to an extent. Earlier this year, Biden signed the $52 billion CHIPS Act into law, providing massive subsidies for the semiconductor industry—certainly an important industry for defense, especially given that the Department of Defense uses 1.9 billion chips a year.

If only it were that simple. As Bloomberg’s editorial board notes, throwing money at the problem won’t solve it. Renowned historical economists like Henry Hazlitt, Ludwig von Mises, and Milton Friedman wrote extensively on how subsidies misallocate resources, create distortions, and stymie growth. China, often admired by some for its remarkable growth and development over the past few decades—made possible by subsidies and government policy—now faces deep economic problems. This was entirely predictable. It is not a strategy we should mimic.

What really stifles dynamism in the United States is overregulation—big government, as it were. Clean Air Act permits can take eighteen months. National Environmental Policy reviews take an average of four and a half years. As new technologies continue to quickly develop, this is time companies can’t afford. Tariffs, designed to protect the defense industry, have instead hurt it. President Joe Biden’s hostility towards low-cost, reliable energy only adds to production costs. The Jones Act, designed to protect American shipping, has instead made it incapable of meeting national defense needs. This is all without even including the maze of local “not in my backyard” laws that in 2015 were estimated to cost the U.S. economy at least $1 trillion a year. The list goes on. This overregulation has serious consequences in both time and money.  Producing semiconductors in the United States, for example, takes 25 percent longer and is 50 percent costlier than in Asia.

Then there’s the labor shortage. According to one study, 300,000 more skilled workers were needed just to fill current chip plants, much less start new ones. Addressing this will require immigration reform. This is a thorny political issue, but the simple reality is that ample labor keeps production high and costs low. Attracting the best minds in the world is one of the best and easiest ways to stay competitive. Currently, foreign STEM students receive their graduate degrees in the United States (often at taxpayer expense), but caps on green cards make it hard for them to stay. We literally pay for their education and then kick them out—often to China’s benefit. In fact, Chinese leaders in semiconductors and other technologies were all educated in the United States.  

There are, of course, security risks in expanding visas, which China will try to exploit for espionage purposes. But the upside is too great to ignore, and the downsides can be enormous; educating foreigners and kicking them out seems to be the best way Beijing can piggyback off of U.S. research. The creator of 5G technology, who was sponsored by the Chinese company Huawei, and the father of Chinese missile and space technology were both immigrants forced out of the United States. “The stupidest thing this country has ever done” is what former Secretary of the Navy, Dan Kimball said about the latter. Surely creative ways to strengthen security while tapping into the talent that accompanies visa expansion must exist.

As historian Victor Davis Hanson and others have written, the freer nations are the more powerful their military. Authoritarian regimes don’t have the dynamism to build and adapt. The challenge for Congress and the next president will be to position him or herself as a reformer that can unshackle U.S. industry from the burden of onerous regulation. A nation of liberated innovators, visionaries, and entrepreneurs would put China to shame, full stop.

Daniel Duffy is a Marine veteran of Iraq and Afghanistan that writes on foreign policy. His work is found in several publications.

Image: Official White House Photo/Flickr.

The December 2021 election of Gabriel Boric as President of Chile was hailed by progressive opinion around the world. Here was a new type of Latin leftist—young, untainted by authoritarian tendencies, sensitive not only to longstanding issues of inequality but also to newer ones of climate change, gender, sexuality, and indigenous rights. He would represent a new, impatient generation of Chileans who would supplant the stodgy, timid centrists and implement real change.

Now, a year and a half later, the picture looks very different. Boric’s support has sunk in the polls, hovering around 30 percent. A new constitution drafted by a convention dominated by the political Left was soundly rejected in a referendum. The country’s Right triumphed in a follow-up election to name delegates to a second convention. Issues of crime, terrorism, and illegal immigration dominate the public agenda, while much of Boric’s legislative agenda is stuck in a divided Congress.

Amid Crisis, the Left Triumphs

The saga of the rise and apparent decline of Boric and Chile’s Left began in 2019 with a series of protests, extending for months and throughout the length of the country. The demonstrations were sparked initially by an increase in Santiago’s metro fares. Although many of the protesters, in what was known as the “social explosion,” were peaceful, there was significant violence and destruction of property.

The protests reached a point where it was unclear if then-President Sebastian Piñera could survive in office. Seeking a political solution to the unrest, Piñera and the political establishment agreed to a longstanding leftist demand for a convention to rewrite Chile’s constitution. The document was initially imposed during the dictatorial regime of General Augusto Pinochet but was significantly modified after the restoration of democracy in 1990.

Some on the far left saw the convention as a trap to channel the energies of the protests into normal politics. Boric, a former student leader-turned-congressman for a small, new leftist party (Social Convergence), supported it, giving him new prominence. The legislation authorizing the convention passed and was submitted to a referendum, where it gained extensive support from an exhausted public. In May 2021, an election was held to name delegates to the constitutional convention. To the surprise of many, leftist forces gained over a two-thirds majority.

Meanwhile, with Piñera’s term due to end in March of 2022, Boric, now a prominent national figure, ran for the presidency under the banner of the “Broad Front”—a coalition of relatively new leftist parties together with Chile’s Communist Party, which since the return to democracy had always commanded the support of a hard core of 6 or 7 percent of the population.

The traditional center-left and center-right coalitions nominated lackluster candidates; simultaneously, a new force emerged to their right—the Republican Party, led by Senator José Antonio Kast. The Republicans espoused economic and social conservatism and were prepared to defend the record of the Pinochet years. They have been compared to the new rightist parties which have emerged in Europe, such as Vox in Spain, the National Rally in France, and the Brothers of Italy.

In the first round, the centrist parties which had governed Chile since the return to democracy in 1990 suffered a collapse. The two winners who went on to the second round were Kast with 27.91 percent and Boric with 25.82 percent. No other grouping gained more than 13 percent.  In the second round, the voters decisively broke for Boric, who won with a majority of 55.9 percent.

Between the presidential election and convention delegate selection, it seemed the radical Left had made a remarkable comeback, reaching power not seen since the election of Salvador Allende in 1970. Under the leadership of a new generation of political leaders, Chile was perceived to be on a fast track to major political change. The cautious approach to achieving social progress, as exemplified by the slogans “growth with equity” and “realism without renunciation”—associated with center-left Presidents Ricardo Lagos and Michelle Bachelet—was not enough for an impatient public.

Events, however, unfolded very differently. Boric’s administration had to contend with the reality that its majority in the Chamber of Deputies included the center-left parties it sought to replace. In the evenly divided Senate, its position was even more tenuous.

Trying for a New Constitution

While the center-left parties were prepared to cooperate with Boric’s Broad Front coalition, matters were not helped by the measure of patronizing contempt which had emerged from the latter, as demonstrated by the presidential chief of staff who said that the New Left had “different values” from the previous, politically compromised generation.

In that frustrating environment, Boric and his government looked to the constitutional convention to draft a document in which their economic and social views would be permanently inscribed and held off on proposing major new legislation in the meantime. However, the convention, with its clear leftist majority, produced in July 2022 a result that was not palatable to the great majority of Chileans.

Its 388 articles guaranteed a leading role to the state in healthcare, education, and pensions, areas previously dominated by the private sector. Chile would be declared a “plurinational” state, with the indigenous communities exercising unprecedented autonomy, including their own justice systems. The document enshrined strict environmental controls, threatening Chile’s profitable mining, fishery, and forestry sectors. Moreover, the reformed legislature and judiciary gave the Left an unfair structural advantage.

Also, in addition to being radical in its final product, the conduct of many convention delegates offended Chileans. Performative gestures ranged from delegates interrupting the national anthem to the bizarre case of one who dressed up as a Pokemon character. Throughout the year-long convention, the majority lacked interest in accommodating centrist and conservative views. All of this led many voters to feel deep suspicion of the final draft.

Two Resounding Rejections

Although by the time the nationwide referendum on the draft constitution was held in September of 2022, its approval seemed doubtful, the level of rejection was stunning—62 percent of voters opposed it. Given that Boric was closely identified with the convention, his support seemed reduced to his hard-core supporters, a view which was supported by polling on his popularity.

After the rejection of the draft constitution Boric and the Left insisted that the original mandate from the people to write a new document still had validity and pushed for a second convention. While many on the Right were unenthusiastic, they were trapped by their promise to back a new convention if the first failed.

Ultimately Congress passed legislation authorizing a new convention, but this time with significant constraints on radical ambitions. The first draft would be prepared by a commission of experts named by the Congress; the actual convention (now called a “council”) would have limited authority to change the experts’ draft; and a board of arbitrators would review the final document to assure that it stayed within the fairly limited congressional mandate the council had been given.

Unlike the vote to elect the previous constitutional convention, this time, voters selected delegates from slates nominated by political parties—eliminating the independent intellectuals and civil society activists who had been among the most radical members. The results closely paralleled those of the previous constitutional referendum—leftist delegates made up only 34 percent of the new council.

And within the conservative majority of 66 percent of the delegates, its composition skewed well to the Right, with Jose Antonio Kast’s Republican Party becoming the dominant force with 46 percent of the total seats. This would make it, to judge by this vote at least, the most popular political party in Chile. This was a true earthquake, given the party had emerged recently, and it raised the prospect of a conservative renaissance.

It is worth noting that in both the first constitutional referendum and the election of the delegates to the second constitutional convention, voting was mandatory (it is not in the regular congressional and presidential elections.)  This new element of the electorate, which skews towards older voters, came down decisively on the political Right and had a key role in the final result in both cases.

This outcome, on top of the rejection of the previous draft constitution, has meant that any new constitution is not likely to differ vastly from the existing one. But beyond that, it means Boric, who is in office until 2026, is obliged to trim back his legislative ambitions while keeping his own coalition together. Even before the most recent debacle, he gave senior positions to figures from the old center-left parties while nonetheless claiming to stay true to his radical election platform.

The decline in support for Boric, as evidenced both in polling and in the results of the two votes regarding constitutional reform, has several causes. Certainly, the disastrous management of the first convention had an impact. But also, during his first year in office, other issues came to the forefront of national life: namely urban crime, especially in Santiago; the unprecedented flow of immigrants into Chile from Haiti and Venezuela; and the violence generated by radical indigenous groups in southern Chile.

The Boric administration, which ran on a platform of diversity and social inclusion, was ill-equipped and slow to address these issues. Eventually, it took reluctant steps, such as deploying the military to support the police in the south. It had to swallow hard and accept legislation passed over its objections which limited the liability of the police and army when faced with brutality charges. But at the same time, in what proved to be a highly unpopular step, it reached out to its far left base by pardoning several protesters convicted of violent acts during the social explosion.

Who Will Win the Center?

Faced with low popularity and lacking a solid working majority in Congress, Boric has lowered his sights while still proclaiming fealty to the radical program on which he ran. He has scored some successes—a law increasing royalties on Chile’s crucial mining industry has passed after a downward adjustment. The work week has been reduced from 45 to 40 hours, and the minimum wage raised.

But other elements of his platform, such as a large general tax increase, massive increases in the state’s role in the health and pension systems, and a proposed state-run lithium mining enterprise, will face considerable modification in Congress if they are to have any chance of passing in face of emboldened moderates and conservatives.

Boric, however, should not be written off completely. He retains his appealing, youthful persona. While his fundamental views remain radical, he has taken steps to moderate his message and frustrate his Communist and independent leftist base. Old center-left establishment figures remain in key cabinet positions, and Boric’s legislative agenda is limited to his top priorities.

If he gets some legislation passed, even if it is watered down, and the economy picks up, he may see improvement in his standing. Indeed, his recent address to Congress, which struck a conciliatory tone, has given him a momentary uptick in the polls.

Chile’s center-right and center-left governments had real achievements, making the country a poster child for economic development and poverty reduction over the last thirty years. However, they became complacent, with the same faces cycling through key positions over the years. At the same time, there was a failure of nerve, particularly among the center-left, which seemingly felt guilty about defending the merits of gradualism in the face of the public’s rising expectations.

This opened the way for Boric and the far left. But they erred in assuming that the center’s collapse meant that Chilean public opinion had shifted to the point where they had free rein to implement their vision. This overreaching, in turn, opened the door to Kast and the hard right.

But Chile’s disillusioned centrist voters remain the key battleground. Kast’s Republicans will try hard to permanently capture them and will likely give special attention to those older Chileans who came out for the recent votes on constitutional issues. At the same time, the centrist parties will seek to reconstitute themselves and regain their lost support.

But it is also possible that Boric—now rebranded as a more moderate social democrat—will find a way to once more reclaim the center while retaining much of his hard left support. He is down, but not out, and Chile’s center remains up for grabs.

Richard M. Sanders is Senior Fellow, Western Hemisphere at the Center for the National Interest. He is also a Global Fellow at the Woodrow Wilson International Center for Scholars. A former member of the Senior Foreign Service of the U.S. Department of State, he has served as Director of the Office of Brazilian and Southern Cone Affairs and at embassies throughout Latin America.

Image: Shutterstock

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