Diplomacy & Crisis News

U.S. Treasury official Harry Dexter White is best known as one of the leading architects of the Bretton Woods system that shaped the global economy after World War II. But he was also a spy for the Soviet Union, providing secret information and giving advice on economic issues. Why did he do it? Newly uncovered documents show that this champion of postwar global capitalism was actually a passionate believer in the success of the Soviet experiment with socialism.

It’s easy to be pessimistic about the Arab Spring, given the post-revolutionary turmoil the Middle East is now experiencing. But critics forget that it takes time for new democracies to transcend their authoritarian pasts. As the history of political development elsewhere shows, things get better.

Compared with other developed countries, the United States has very low taxes, little income redistribution, and an extraordinarily complex tax code. If it wanted to, the government could raise taxes without crippling growth or productivity. Tax reform is ultimately a political choice, not an economic one—a statement about what sort of society Americans want.

By George Friedman

For centuries, the dilemma facing Iran (and before it, Persia) has been guaranteeing national survival and autonomy in the face of stronger regional powers like Ottoman Turkey and the Russian Empire. Though always weaker than these larger empires, Iran survived for three reasons: geography, resources and diplomacy. Iran's size and mountainous terrain made military forays into the country difficult and dangerous. Iran also was able to field sufficient force to deter attacks while permitting occasional assertions of power. At the same time, Tehran engaged in clever diplomatic efforts, playing threatening powers off against each other.

The intrusion of European imperial powers into the region compounded Iran's difficulties in the 19th century, along with the lodging of British power to Iran's west in Iraq and the Arabian Peninsula following the end of World War I. This coincided with a transformation of the global economy to an oil-based system. Then as now, the region was a major source of global oil. Where the British once had interests in the region, the emergence of oil as the foundation of industrial and military power made these interests urgent. Following World War II, the Americans and the Soviets became the outside powers with the ability and desire to influence the region, but Tehran's basic strategic reality persisted. Iran faced both regional and global threats that it had to deflect or align with. And because of oil, the global power could not lose interest while the regional powers did not have the option of losing interest.

Whether ruled by shah or ayatollah, Iran's strategy remained the same: deter by geography, protect with defensive forces, and engage in complex diplomatic maneuvers. But underneath this reality, another vision of Iran's role always lurked.
Iran as Regional Power

Possessing an essentially defensive posture, a vision of Iran as a regional power remained. The shah competed with Saudi Arabia over Oman and dreamed of nuclear weapons. Ahmadinejad duels with Saudi Arabia over Bahrain, and also dreams of nuclear weapons. When we look beyond the rhetoric -- something we always should do when studying foreign policy, since the rhetoric is intended to intimidate, seduce and confuse foreign powers and the public -- we see substantial continuity in Iran's strategy since World War II. Iran dreams of achieving regional dominance by breaking free from its constraints and the threats posed by nearby powers.

Since World War II, Iran has had to deal with regional dangers like Iraq, with which it fought a brutal war lasting nearly a decade and costing Iran about 1 million casualties. It also has had to deal with the United States, whose power ultimately defined patterns in the region. So long as the United States had an overriding interest in the region, Iran had no choice but to define its policies in terms of the United States. For the shah, that meant submitting to the United States while subtly trying to control American actions. For the Islamic republic, it meant opposing the United States while trying to manipulate it into taking actions in the interests of Iran. Both acted within the traditions of Iranian strategic subtlety.

The Islamic republic proved more successful than the shah. It conducted a sophisticated disinformation campaign prior to the 2003 Iraq war to convince the United States that invading Iraq would be militarily easy and that Iraqis would welcome the Americans with open arms. This fed the existing U.S. desire to invade Iraq, becoming one factor among many that made the invasion seem doable. In a second phase, the Iranians helped many factions in Iraq resist the Americans, turning the occupation -- and plans for reconstructing Iraq according to American blueprints -- into a nightmare. In a third and final phase, Iran used its influence in Iraq to divide and paralyze the country after the Americans withdrew.

As a result of this maneuvering, Iran achieved two goals. First, the Americans disposed of Iran's archenemy, Saddam Hussein, turning Iraq into a strategic cripple. Second, Iran helped force the United States out of Iraq, creating a vacuum in Iraq and undermining U.S. credibility in the region -- and sapping any U.S. appetite for further military adventures in the Middle East. I want to emphasize that all of this was not an Iranian plot: Many other factors contributed to this sequence of events. At the same time, Iranian maneuvering was no minor factor in the process; Iran skillfully exploited events that it helped shape.

There was a defensive point to this. Iran had seen the United States invade the countries surrounding it, Iraq to its west and Afghanistan to its east. It viewed the United States as extremely powerful and unpredictable to the point of irrationality, though also able to be manipulated. Tehran therefore could not dismiss the possibility that the United States would choose war with Iran. Expelling the United States from Iraq, however, limited American military options in the region.

This strategy also had an offensive dimension. The U.S. withdrawal from Iraq positioned Iran to fill the vacuum. Critically, the geopolitics of the region had created an opening for Iran probably for the first time in centuries. First, the collapse of the Soviet Union released pressure from the north. Coming on top of the Ottoman collapse after World War I, Iran now no longer faced a regional power that could challenge it. Second, with the drawdown of U.S. forces in the Persian Gulf and Afghanistan, the global power had limited military options and even more limited political options for acting against Iran.
Iran's Opportunity

Iran now had the opportunity to consider emerging as a regional power rather than solely pursuing complex maneuvers to protect Iranian autonomy and the regime. The Iranians understood that the moods of global powers shifted unpredictably, the United States more than most. Therefore it knew that the more aggressive it became, the more the United States may militarily commit itself to containing Iran. At the same time, the United States might do so even without Iranian action. Accordingly, Iran searched for a strategy that might solidify its regional influence while not triggering U.S. retaliation.

Anyone studying the United States understands its concern with nuclear weapons. Throughout the Cold War it lived in the shadow of a Soviet first strike. The Bush administration used the possibility of an Iraqi nuclear program to rally domestic support for the invasion. When the Soviets and the Chinese attained nuclear weapons, the American response bordered on panic. The United States simultaneously became more cautious in its approach to those countries.

In looking at North Korea, the Iranians recognized a pattern they could use to their advantage. Regime survival in North Korea, a country of little consequence, was uncertain in the 1990s. When it undertook a nuclear program, however, the United States focused heavily on North Korea, simultaneously becoming more cautious in its approach to the north. Tremendous diplomatic activity and periodic aid was brought to bear to limit North Korea's program. From the North Korean point of view, actually acquiring deliverable nuclear weapons was not the point; North Korea was not a major power like China and Russia, and a miscalculation on Pyongyang's part could lead to more U.S. aggression. Rather, the process of developing nuclear weapons itself inflated North Korea's importance while inducing the United States to offer incentives or impose relatively ineffective economic sanctions (and thereby avoiding more dangerous military action). North Korea became a centerpiece of U.S. concern while the United States avoided actions that might destabilize North Korea and shake loose the weapons the north might have.

The North Koreans knew that having a deliverable weapon would prove dangerous, but that having a weapons program gave them leverage -- a lesson the Iranians learned well. From the Iranians' point of view, a nuclear program causes the United States simultaneously to take them more seriously and to increase its caution while dealing with them. At present, the United States leads a group of countries with varying degrees of enthusiasm for imposing sanctions that might cause some economic pain to Iran, but give the United States a pretext not to undertake the military action Iran really fears and that the United States does not want to take.

Israel, however, must take a different view of Iran's weapons program. While not a threat to the United States, the program may threaten Israel. The Israelis' problem is that they must trust their intelligence on the level of development of Iran's weapons. The United States can afford a miscalculation; Israel might not be able to afford it. This lack of certainty makes Israel unpredictable. From the Iranian point of view, however, an Israeli attack might be welcome.

Iran does not have nuclear weapons and may be following the North Korean strategy of never developing deliverable weapons. If they did, however, and the Israelis attacked and destroyed them, the Iranians would be as they were before acquiring nuclear weapons. But if the Israelis attacked and failed to destroy them, the Iranians would emerge stronger. The Iranians could retaliate by taking action in the Strait of Hormuz. The United States, which ultimately is the guarantor of the global maritime flow of oil, might engage Iran militarily. Or it might enter into negotiations with Iran to guarantee the flow. An Israeli attack, whether successful or unsuccessful, would set the stage for Iranian actions that would threaten the global economy, paint Israel as the villain, and result in the United States being forced by European and Asian powers to guarantee the flow of oil with diplomatic concessions rather than military action. An attack by Israel, successful or unsuccessful, would cost Iran little and create substantial opportunities. In my view, the Iranians want a program, not a weapon, but having the Israelis attack the program would suit Iran's interests quite nicely.

The nuclear option falls into the category of Iranian manipulation of regional and global powers, long a historic necessity for the Iranians. But another, and more significant event is under way in Syria.
Syria's Importance to Iran

As we have written, if the Syrian regime survives, this in part would be due to Iranian support. Isolated from the rest of the world, Syria would become dependent on Iran. If that were to happen, an Iranian sphere of influence would stretch from western Afghanistan to Beirut. This in turn would fundamentally shift the balance of power in the Middle East, fulfilling Iran's dream of becoming a dominant regional power in the Persian Gulf and beyond. This was the shah's and the ayatollah's dream. And this is why the United States is currently obsessing over Syria.

What would such a sphere of influence give the Iranians? Three things. First, it would force the global power, the United States, to abandon ideas of destroying Iran, as the breadth of its influence would produce dangerously unpredictable results. Second, it would legitimize the regime inside Iran and in the region beyond any legitimacy it currently has. Third, with proxies along Saudi Arabia's northern border in Iraq and Shia along the western coast of the Persian Gulf, Iran could force shifts in the financial distribution of revenues from oil. Faced with regime preservation, Saudi Arabia and other Gulf states would have to be flexible on Iranian demands, to say the least. Diverting that money to Iran would strengthen it greatly.

Iran has applied its strategy under regimes of various ideologies. The shah, whom many considered psychologically unstable and megalomaniacal, pursued this strategy with restraint and care. The current regime, also considered ideologically and psychologically unstable, has been equally restrained in its actions. Rhetoric and ideology can mislead, and usually are intended to do just that.

This long-term strategy, pursued since the 16th century after Persia became Islamic, now sees a window of opportunity opening, engineered in some measure by Iran itself. Tehran's goal is to extend the American paralysis while it exploits the opportunities that the U.S. withdrawal from Iraq has created. Simultaneously, it wants to create a coherent sphere of influence that the United States will have to accommodate itself to in order to satisfy the demand of its coalition for a stable supply of oil and limited conflict in the region.

Iran is pursuing a two-pronged strategy toward this end. The first is to avoid any sudden moves, to allow processes to run their course. The second is to create a diversion through its nuclear program, causing the United States to replicate its North Korea policy in Iran. If its program causes an Israeli airstrike, Iran can turn that to its advantage as well. The Iranians understand that having nuclear weapons is dangerous but that having a weapons program is advantageous. But the key is not the nuclear program. That is merely a tool to divert attention from what is actually happening -- a shift in the balance of power in the Middle East.

www.stratfor.com

In 64 BC, the great Roman lawyer and orator Marcus Tullius Cicero ran for consul. His younger brother, Quintus, thought Marcus had a chance -- as long as he ran a good campaign. So Quintus wrote a detailed strategy memo laying out just what Marcus needed to do to win. It’s the best guide to electioneering you’ll ever read, presented here with a commentary by the legendary political consultant James Carville.

Most experts think the global recession was caused by a collapse in demand -- and so, in good Keynesian fashion, they want governments to ramp up spending to compensate. But the West’s recent growth was dependent on borrowing. Going even further into debt now won’t help; instead, countries need to address the underlying flaws in their economies.

Unions underwrote the affluence of U.S. workers in the last century. They ensured that manual work paid white-collar wages and gave laborers a voice in politics. But now, unions are declining, and the working and middle classes are paying the price. Reviving labor won’t be easy -- but doing so is critical to preserving America’s economic and social health.

Global health programs now teeter on the edge of disaster. The world economic crisis and the politics of debt reduction are threatening everything from malaria control and AIDS treatment to well-baby programs and health-care worker training efforts. And even if the existing global public health architecture survives this time of parsimony and austerity, it will have been remodeled along the way.

Terrible rulers, sullen populations, a terrorist fringe—the Arabs' exceptionalism was becoming not just a human disaster but a moral one. Then, a frustrated Tunisian fruit vendor summoned his fellows to a new history, and millions heeded his call. The third Arab awakening came in the nick of time, and it may still usher in freedom.

Success in Afghanistan would not be as difficult or expensive as it was for the United States to win wars in Europe or counter the communist threat. Given the risks and the opportunities ahead, an investment in South Asia is worth making.

Over the last three decades, public funding for global health organizations has dried up. Private companies are writing checks to fill the gap, and, accordingly, they are bending the agenda toward their interests. Realigning priorities, however, will mean getting more private firms involved, not less.

Deterrence is not automatic. While feasible, it will be much harder to achieve in the 1960s than is generally believed.

THE present tacit moratorium on the Formosan problem does not give hope that the question will simply resolve itself by the passage of time; it does provide an opportunity to ponder a solution of one of the major foreign policy dilemmas facing the United States. Before pressure to admit Communist China to the United Nations becomes irresistible, the United States should relieve itself of the anomaly of supporting a government which is held to be sovereign where it exerts no authority and which lacks sovereignty where it does. For it must be remembered that the United States holds the legal status of Formosa to be in abeyance. It maintains that neither the Cairo Declaration nor the Peace Treaty with Japan has operated to make Formosa and the Pescadores formally part of China. To endorse the Chinese claim of sovereignty over Formosa was thought unwise, presumably because to do so would automatically link the question with that of representation of the two rival Chinese régimes, and thereby give legitimate title to whichever régime was victorious in the civil strife.

FORMOSA—symbol of the struggle between freedom and Communism in the Orient—poses a test of how far United States foreign policy can combine the ideals of freedom with the flexible realism required by the harsh facts of world politics. Our friend and long-time ally, Chiang Kai-shek, presently holds Formosa (Taiwan); the Communists hold the mainland. We are unhappy that a great nation with the cultural traditions of China should be under the control of a totalitarian régime which does not share our belief in freedom. But for the present, at least, unless we wish to risk an all-out war, our desire to see the return of freedom to continental China cannot overcome the stark fact of the possession and control of the mainland by the Communists.

The notion that world government is a fairly simple possibility is the final and most absurd form of the "social contract" conception of government which has confused modern political thought since Hobbes.

Note: Where the period of republication of particular items for mass consumption is relevant to the discussion, this information is supplied in parentheses in the footnotes. Thus (1925-1939) means "originally published in 1925, republished until 1939," and (1925 to present) means "originally published in 1925, republished up to the present time." THE stress laid by Stalin on the importance of theory is so foreign to American habits of mind that we are prone to underestimate the influence which theory plays in determining his action. Any such tendency would lead us into especially grave error when we come to estimating the importance of his theoretical conception of the nature of revolution; for on this he has been amazingly consistent.

GOVERNMENT," said Alexander Hamilton, "ought to contain an active principle." Political institutions which advance the welfare of their human constituents achieve an internal state which is cohesive and dynamic and produce an external environment which is sympathetic and receptive. Those are the conditions needed for survival and growth. The United Nations Organization is charged with positive tasks. That at least gives it a chance to be potent in the world. Whether the chance is realized will depend primarily upon the General Assembly. The rôle of the Security Council is predominantly negative. Its task is to stop the nations from public brawling. But it has no mandate to change the conditions which make brawls likely.