Foreign affairs 2016 09-10

The Strategic Costs of Torture done—that it was proof [that] everything they thought bad about the Americans was true.” Without much cooperation from local populations, coalition forces found it difficult to develop the kind of intelligence sources necessary to identify and target insurgents. A PARIAH STATE At the same time that the United States’ use of torture was inspiring extremists in the Middle East, it was also undermining counterterror­ ism cooperation between Washington and its allies. Consider the case of the Netherlands. According to U.S. State Department cables from 2003, the Dutch army’s leadership wanted to contribute troops to the U.S.-led effort in Afghanistan. But intense public opposition to torture led Dutch political leaders to fear they would face domestic backlash if their army helped apprehend al Qaeda or Taliban members who then ended up at Guantánamo Bay. These concerns helped delay parliamentary approval for the deployment of Dutch troops until early 2006. Speaking before the Dutch legislature in November 2005, Foreign Minister Bernard Bot warned that if Washington was not forthcoming about its torture policies, the Dutch might not deploy troops to Afghanistan. It was only after the United States provided additional assurances concerning the treatment of Afghan prisoners that the Dutch parliament voted to deploy troops. Similar concerns impeded cooperation among the coalition forces. In 2005, a U.S. military attorney told one of us (Alberto Mora, then general counsel to the U.S. Navy) that the British army had captured an enemy combatant in Basra, Iraq, but released him because it did not have adequate detention facilities and did not trust U.S. or Iraqi forces to treat him humanely (aiding and abetting torture is a crime under British law). Later, in 2005, Australian, British, Canadian, and New Zealand military lawyers approached Mora at a military conference sponsored by U.S. Pacific Command in Singapore and advised him that their countries’ cooperation with the United States “across the range of military, intelligence, and law enforcement activities in the war on terror would continue to decline” so long as Washington persisted in using torture. The problems went far beyond Afghanistan and Iraq. The Finnish parliament delayed ratifying a U.S.-eu treaty on extradition and legal cooperation from late 2005 until 2007 over concerns that the United States’ use of torture and extraordinary rendition—the government- sponsored practice of abducting and transporting terrorist suspects from September/October 2016 125

Douglas A. Johnson, Alberto Mora, and Averell Schmidt one country to another for detention and interrogation without judicial oversight—might violate Section 7 of Finland’s constitution, which prohibits torture and specifies that the “deprivation of liberty may be imposed only by a court of law.” In 2008, British authorities, fearing that the United States was transporting suspects to secret prisons through British airports, began requiring the U.S. embassy in London to request permission before landing military planes in the United Kingdom. Around the same time, the United States’ use of torture endangered its access to Shannon Airport, in Ireland, a vital stop for transatlantic military flights. “For segments of the Irish public,” a WikiLeaks cable reads, “the visibility of U.S. troops at Shannon . . . made the airport a symbol of Irish complicity in Governments that assisted perceived U.S. wrongdoing in the the CIA’s detention and Gulf/Middle East.” These concerns led interrogation program paid the Irish government to impose new “cumbersome notification require­ments” a legal price. on U.S. military aircraft to prevent tor­ ture victims from crossing Irish ter­ ritory, prohibit the United States from shipping munitions to Israel through Shannon during the 2006 Israeli conflict with Lebanon, and bar U.S. deportations through Shannon, lest there be any confusion over the prisoners’ legal status. The United States’ treatment of detainees also antagonized foreign courts. Overriding the opposition of their countries’ leaders, who did not want to undermine intelligence cooperation with the United States, judges in Canada and the United Kingdom ordered their governm­ ents to release classified information relating to the interrogation of their countries’ citizens in U.S. custody. In 2010, the British government reportedly paid a large (and classified) settlement to several victims of extraordinary rendition rather than risk airing details of British com­ plicity in U.S. torture in court proceedings. Meanwhile, the Spanish Supreme Court annulled a six-year prison sentence of a convicted terrorist, Hamed Abderrahaman Ahmed, because some of the evidence presented by Spanish prosecutors in the case had been obtained while Ahmed was at Guantánamo. That information was inadmissible, the court ruled, because it had been attained under circumstances “impossible to explain, much less justify.” And in 2010, in a demonstration of how the use of torture jeopardizes the prosecution of defendants, Ahmed Khalfan Ghailani was acquitted of 284 out of 285 126 foreign affairs

The Strategic Costs of Torture charges of conspiracy and murder in the 1998 terrorist bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, after a U.S. federal judge barred prosecutors from using a key witness whom the government had learned of during Ghailani’s interrogations while in cia custody—interrogations that Ghailani’s lawyers argued constituted torture. HOW TO LOSE FRIENDS AND ALIENATE PEOPLE Worldwide, the scandals involving Abu Ghraib, cia secret prisons, and Guantánamo Bay also soured attitudes toward the United States more generally, compounding the damage done by the 2003 invasion of Iraq. A 2006 Pew poll found that even after controlling for respondents’ views of the Iraq war, people in Jordan, Pakistan, Spain, and the United Kingdom—all U.S. allies in the war on terrorism—reported less favorable views of the United States if they were aware of U.S. abuses at Abu Ghraib, Guantánamo, and elsewhere. Governments that assisted the cia’s detention and interrogation program paid a legal price. Shortly after the human rights violations at Abu Ghraib became public knowledge, Canadian and European officials launched investigations into the complicity of their governm­ ents in the torture of U.S. detainees. These included public inquiries launched in Canada, Germany, Italy, Spain, and the United Kingdom, as well as by the European Parliament and the Council of Europe. At the European Court of Human Rights, torture victims brought cases against Italy, Lithuania, Macedonia, Poland, and Romania, charging that by hosting cia secret prisons, the governments of those countries had violated Article 3 of the European Convention on Human Rights, which prohibits torture. In 2012, the court ruled against Macedonia, ordering it to pay 60,000 euros in damages to Khalid el-Masri, a German and Lebanese citizen whom the Macedonian police had abducted and handed over to the cia; two years later, it ruled against Poland, which had to pay the suspected terrorists Abu Zubaydah and Abd al-Rahim al-Nashiri, who had been held at cia “black sites” in Poland, 130,000 and 10,000 euros, respectively. And in 2016, the court ruled against Italy, making it pay 115,000 euros to the Egyptian cleric Hassan Mustafa Osama Nasr (also known as Abu Omar) and his wife, Nabila Ghali. The cases against Lithuania and Romania are still pending, but the rulings so far have sent a clear message to U.S. allies: complicity carries consequences. By the end of the Bush administration, Washington’s international credibility had fallen so low that even its closest allies appeared to distrust September/October 2016 127

Douglas A. Johnson, Alberto Mora, and Averell Schmidt the United States. According to leaked cables, for example, in a 2004 meeting with U.S. Republican Senators McCain and Lindsey Graham, Irish Prime Minister Bertie Ahern voiced his fear that the United States was transporting prisoners through Ireland, even though U.S. officials had said they weren’t. He told McCain Even if torture may have and Graham that he did not want to ap­ sometimes produced helpful pear foolish after defending the U.S. military’s use of Ireland as a transit hub intelligence, it also led U.S. to his parliament on the basis of “U.S. assurances that enemy combatants have policymakers astray. not transited Shannon [Airport] en route to Guantánamo or elsewhere.” “Am I all right on this?” he asked them. McCain pledged to relay Ahern’s concerns to the Bush administration and to underscore “how very important it is that the U.S. not ever be caught in a lie to a close friend and ally.” (Al­ though there is no evidence that detainees were onboard flights traveling through Shannon, several flights that stopped there did later pick up detainees and transport them elsewhere.) It was only a matter of time before the United States itself became the target of foreign legal proceedings. In 2005, Swiss prosecutors opened a criminal investigation into the United States’ use of Swiss airspace for extraordinary renditions. Between 2004 and 2009, the Center for Constitutional Rights and the European Center for Constitutional and Human Rights filed cases in France, Germany, and Spain against Donald Rumsfeld, who was U.S. secretary of defense until the end of 2006, and other senior U.S. officials for war crimes committed at Abu Ghraib and Guantánamo Bay. Cases were also filed against Rumsfeld in Argentina in 2005 and in Sweden in 2007. Just this year, a French court summoned Geoffrey Miller, the U.S. general who ran the Guantánamo Bay detention facility, for questioning as part of an investigation into his role in the torture of three French citizens. (Miller did not show up.) Although not every case has led to formal charges, a few have. In 2005, Italy launched an investigation into the cia’s kidnapping and extradition of a Muslim cleric in Milan in 2003. The subsequent criminal proceedings led to the conviction of 23 U.S. officials in absentia. Even though the United States continues to refuse Italy’s extradition requests, the case has restricted the movement of the implicated officials. In 2013, at the request of Italian authorities, police in Panama briefly detained one of them, the former cia station chief in Milan, Robert Seldon Lady. 128 foreign affairs

The Strategic Costs of Torture In April, authorities in Portugal arrested another former cia official charged in the case, Sabrina De Sousa, and are in the process of extraditing her to Italy. Similar legal risks continue to limit the mobility of several former high-ranking U.S. officials, including former President George W. Bush, former Vice President Dick Cheney, Rumsfeld, and JohnYoo, a key legal adviser to the Bush administration. Once in command of the world’s most powerful country, today they cannot travel to states that assert universal jurisdiction for acts of torture, such as France, Germany, Spain, and Switzerland, without risking detention and prose­ cution. Likely due to such concerns, Rumsfeld cut short a trip to France in 2007 and Bush canceled a trip to Switzerland in 2011. Adding insult to injury, Russia has repeatedly imposed travel restrictions on former Bush administration officials for their participation in “medieval torture.” LEADING BY EXAMPLE U.S. foreign policy has long supported the advancement of international law and human rights, since doing so promotes peace, security, and the rule of law overseas; encourages the spread of democracy; and shores up popular support for Americanvalues.The use of torture demonstrably undermined these objectives, making the United States both less influ­ ential and less secure. Even before news of U.S. abuses first broke, other governments began citing U.S. practices to justify their own human rights abuses in the war on terrorism. As early as January 2002, according to cables released on the WikiLeaks website, the State Department received intelligence that Russia was “carefully studying U.S. treatment of detainees in search of useful precedents to justify its treatment of Chechnya prisoners.” In 2003, Colombian President Álvaro Uribe adopted the U.S. concept of “illegal combatants” to suggest that certain Colombian rebels were ineligible for protection under international law. U.S. torture of detainees did more than merely provide other gov­ ernments with a convenient way to justify their own bad behavior: it also presented countries with a specific set of practices to emulate. Our research shows that of the 54 governments that assisted the cia in kidnapping, extraditing, and torturing suspected terrorists, many began to adopt similar policies at home, subjecting their citizens to worsening human rights abuses. In 2008, Human Rights Watch reported that Ethiopia and Kenya had adopted a policy of extraordinary rendition for Somali militants. And following the Abu Ghraib revelations, several September/October 2016 129

Douglas A. Johnson, Alberto Mora, and Averell Schmidt Egyptian human rights groups found that Egyptian police had adopted tactics of sexual humiliation similar to those the United States had used. Gambia provides another case in point. In 2002, the Gambian govern­ ment helped U.S. officials extraordinarily render two suspected terrorists, Bisher al-Rawi and Jamil el-Banna, to a secret cia prison in Afghanistan. Four years later, in the aftermath of an alleged coup attempt, the Gambian government arrested at least 28 people, detaining them in secret prisons and subjecting some to torture. In July 2006, according to leaked State Department cables, Linda Thomas-Greenfield, then the U.S. deputy assistant secretary for African affairs, met with Belinda Bidwell, Speaker of the Gambian National Assembly, and raised objections to Gambia’s human rights record. Bidwell responded that “the world is different since 9/11 and al Qaeda, and when it comes to matters of national security and the safety of the population, extraordinary measures must occasionally be taken.” She then compared those detained in Gambia to the suspects held at Guantánamo Bay, pointing out, according to the cable, that “such things even happen in developed countries.” U.S. interrogation policies also provided an easy pretext for states to disregard multilateral institutions that safeguard human rights, such as the un. Sudanese President Omar al-Bashir cited U.S. behavior in justifying his refusal to allow un peacekeepers into Darfur in 2006: “We don’t want another Abu Ghraib in Darfur; we don’t want our country to go to Guantánamo,” he said. According to European diplomats, the United States’ refusal to grant un special rapporteurs full access to Guantánamo “strengthened the hand” of other countries that sought to deny them access as well. U.S. policies have also allowed chronic human rights abusers, such as China, Cuba, Iran, and North Korea, to dismiss Western condemnations as hypocritical. After the Senate released its torture reports in 2014, for example, China’s state news agency, Xinhua, ran a story headlined “How long can the US pretend to be a human rights champion?” In 2006, when U.S. officials expressed concern over a lack of accountability for Hindu-Muslim riots in the Indian state of Gujarat four years prior, Narendra Modi, then the state’s chief minister, fired back that the United States “was guilty of horrific human rights violations and thus had no moral basis to speak on such matters.” In December 2007, then U.S. Republican Senator Arlen Specter and then Democratic Representative Patrick Kennedy visited Damascus to meet with Syria’s president, Bashar al-Assad, and its foreign minister, 130 foreign affairs

The Strategic Costs of Torture Walid Muallem. In both meetings, Kennedy raised concerns about the Syrian government’s jailing of opposition figures. When Kennedy threatened to issue a public démarche protesting the regime’s political detentions, Muallem responded by suggesting that he would pen one of his own criticizing the United States for its actions in Abu Ghraib and Guantánamo Bay. At a time when U.S. officials were actively courting Assad, who appeared to be more democratic and reform- minded than his father, the torture allegations damaged Washington’s credibility and influence in the region. In China, India, and Syria, accusations of U.S. hypocrisy were not just cheap talk: they signaled the waning influence of U.S. diplomacy. AN UNTENABLE DEFENSE In the years since the details of the cia’s rendition, detention, and interrogation program became public, the agency has vigorously defended its conduct. In its response to the Senate’s torture reports, the cia claimed that “information obtained from cia interrogations produced unique intelligence that helped the [United States] disrupt plots, capture terrorists, better understand the enemy, prevent another mass casualty attack, and save lives.” At the same time, however, the cia took no position on the question of “whether intelligence obtained from detainees subjected to enhanced interrogation techniques could have been obtained through other means or from other individuals. . . . The answer to this question is, and will remain, unknowable.” By insisting on this uncertainty, the cia has obscured the long-standing consensus among interrogation professionals that rapport-building methods are both more humane and more effective, even when dealing with hardened terrorists. This was the experience of former fbi Special Agent Ali Soufan, who successfully used such methods to interrogate the suspected terrorist Zubaydah in Thailand before Zubaydah entered cia custody. These methods are also a chief recommendation of two multiyear studies by the Intelligence Science Board. This emphasis on uncertainty is also a distraction; it draws attention to the tactical effi­ cacy of torture, rather than to its strategic consequences, and places the burden of proof on those who oppose torture, rather than on those who advocate breaking U.S. and international law. And even if torture mayhave sometimes produced helpful intelligence, it also led U.S. policymakers astray. In November 2001, Pakistani authorities captured Ibn al-Shaykh al-Libi, a suspected leader of an September/October 2016 131

Douglas A. Johnson, Alberto Mora, and Averell Schmidt al Qaeda training camp, as he fled Afghanistan. U.S. officials moved him to Egypt, where, after local interrogators tortured him, he claimed that Iraq had trained al Qaeda members to use chemical and biological weapons. Although the cia ultimately renounced Libi’s testimony, the Bush administration cited it as evidence of the link between Saddam Hussein and al Qaeda in the months leading up to the U.S. invasion of Iraq. Trained interrogators often warn that false confessions waste time and resources. In this case, a false confession played a critical role in the disastrous decision to invade Iraq, a choice that cost the United States over $3 trillion and thousands of American and Iraqi lives. “LAZY, STUPID, AND PSEUDO-TOUGH” During crises, leaders often find themselves under incredible pressure to craft policies that will safeguard those they’re tasked to protect. American officials have talked about how, in the terrifying months after 9/11, they greatly feared another attack and felt an enormous responsibility to prevent one from happening. Such fear can easily tempt politicians to put even the most odious options on the table—as it did in this case. Yet it is precisely at such moments that leaders must exercise the greatest restraint. As policymakers decide whether or not to use torture, they should not simply consider whether it will yield helpful intelligence; they should also assess the likely consequences of the policy beyond the interrogation chamber. By all accounts, the Bush administration, the cia, and the Department of Defense failed to think through the costs of abusing detainees and then refused to acknowledge those drawbacks once they began to become manifest. How little we’ve learned since then. In June, after suicide bombers killed 41 people at an airport in Istanbul, Trump reiterated his support for the very methods that got the United States into so much trouble a decade ago. “You have to fight fire with fire,” he said at a rally in Ohio, adding, of waterboarding, “I like it a lot. I don’t think it’s tough enough.” Yet torture is not the answer. Far from being a weapon of strength, it has proved to be a strategic liability, a careless shortcut used by those too hasty to conduct a proper analysis and too shortsighted to anticipate its consequences. In the words of John Hutson, a retired U.S. Navy rear admiral, “Torture is the technique of choice of the lazy, stupid, and pseudo-tough.” We can—we must—do better.∂ 132 f o r e i g n a f fa i r s

Return to Table of Contents Venezuela on the Brink How the State Wrecked the Oil Sector— and How to Save It Lisa Viscidi Venezuela is in the throes of its most tumultuous political and economic period in decades. The collapse of global energy prices has wreaked havoc on the country’s economy. Estimates vary, but oil production has fallen from a peak of around 3.2 million barrels per day in 1997 to somewhere between 2.2 million and 2.5 million barrels per day today. Oil and gas account for more than 95 percent of Venezuela’s revenues from exports, and the country produces few other goods. Without the money it makes from exporting energy products, Venezuela has struggled to import everything else its people need. As a result, Venezuelans are facing widespread shortages of food, medicine, and other basic supplies. Citizens wait in line for hours at supermarkets to buy staples such as rice; many have resorted to sifting through trash to find food. Military forces have been dispatched to oversee food production and distribution. Last year, a group ofVenezuelan researchers estimated that, in contrast to relatively rosy official statistics, more than three-quarters of Venezuelans are living in poverty. And there is no relief in sight: by the end of the year, the economy will probably have contracted by eight percent and the inflation rate will likely reach 720 percent, according to the International Monetary Fund. For a country that boasts the world’s largest proven oil reserves, this is an extraordinary state of affairs. Venezuela’s leaders desperately need to take action to save the country’s sole economic engine. But political instability, bordering on chaos, has stood in the way. The president, Nicolás Maduro, took office in 2013 as the handpicked successor of Hugo Chávez. Maduro is now the head of the United Socialist Party of Venezuela and the standard-bearer of “Chavismo,” which is the LISA VISCIDI is Director of the Energy, Climate Change, and Extractive Industries Program at the Inter-American Dialogue. September/October 2016 133

Lisa Viscidi term Venezuelans use to describe Chávez’s mix of populism, socialism, and cult-of-personality strongman leadership. But Maduro does not enjoy the fierce loyalty that Chávez inspired among working-class and lower-middle-class voters, and he is now fighting for his political survival. For the past two years, anti-Maduro protests and riots have rocked Venezuela’s cities. In response to his slipping support, Maduro has cracked down on dissent, even jailing prominent critics. In July, he reorganized the state bureaucracy, putting the defense minister directly in charge of all economic affairs. Maduro has clung to power only by maneuvering to prevent the opposition from holding a national recall referendum that would remove him from office. With his leadership under assault and his support in doubt, Maduro might not complete his term in office. But if he, or whoever might succeed him, wants to stop the economy’s free fall, there are some relatively simple, modest steps he could take to stabilize the oil sector. Doing so would insulate global oil markets from the shock they would endure if chaos in Venezuela further reduced its ability to produce oil. More important, rescuing the country’s oil industry would spare Venezuelans from even worse deprivations and would help pull the country back from the brink. CRUDE MANAGEMENT Venezuela’s oil production has been steadily declining for years, and its exports are now at historic lows. In recent months, output has begun to drop precipitously. Multiple sources have reported record declines in production this year: according to the International Energy Agency, output fell by 190,000 barrels per day between January and June. As Venezuela’s aging fields produce less light oil, the country has become increasingly dependent on fields producing heavy, less valuable grades of oil and has been forced to import light crude, which it needs to mix with its heavier output in order to make it transportable through pipelines and able to reach the market. These problems stem not just from the drop in global oil prices but also from flawed policies. For years, the Venezuelan government has relied on the state oil company, Petróleos de Venezuela (pdvsa), to finance social programs, such as free housing and health care, which has strained the company’s finances. In 2014, pdvsa spent $26 billion on social programs, more than double its $12 billion profit. In 2015, as the effects of the sustained oil-price collapse began to take hold, social 134 f o r e i g n a f fa i r s

MARCO BELLO / REUTERS Venezuela on the Brink No más: at a drugstore in Caracas, Venezuela, February 2016 spending fell along with oil export revenue but still exceeded pdvsa’s profits by $5.8 billion, according to Venezuela’s oil ministry. Every year for the past decade, except for 2009 and 2010, pdvsa has spent more on social programs than on exploration and production. Making matters worse is a government policy that has frozen do­ mestic gasoline prices at about one cent per liter for almost two dec­ ades, costing pdvsa billions every year. The lower oil price has forced the company to operate some fields at a loss, contributing to a critical lack of cash flow, according to multiple Venezuelan sources and news reports, and pdvsa is reportedly not investing in basic maintenance of its equipment and facilities, such as pipelines and refineries. In a recent sign of pdvsa’s weakness, four tankers destined for Venezuela and carrying more than two million barrels of U.S. light crude were held up at sea for a number of weeks beginning in May, unable to unload at a Caribbean terminal. According to Reuters, the supplier, bp, had halted the delivery because Venezuela had not paid for the cargo. In late June, bp released one shipment after receiving a partial payment, but the other three remain at sea. Having run up massive debts during a global oil boom that lasted from 2010 to 2014, both the Venezuelan government and pdvsa now face challenging payment schedules, with combined payments due in the fourth quarter of this year totaling $4.3 billion. The country will September/October 2016 135

Lisa Viscidi not be out of the woods in 2017, either: a $7.3 billion payment will be due in the second quarter, according to an analysis published by the investment bank hsbc. The cash-strapped government has been issu­ ing bonds through the oil company to Venezuela’s state oil obtain new loans at lower interest rates, company routinely spends but pdvsa has run out of money to pay its debts. Venezuela is also strug­gling more on social programs to pay back billions of dollars in oil- backed loans from China that have than on exploration and helped keep it afloat for the past decade. production. Although China has already extended the repayment deadline for some of those loans, Maduro is seeking additional flexibility. The Chinese government has yet to respond to his request. With less cash to repay these mounting debts, both the Venezuelan government and pdvsa are at risk of defaulting, although the state appears determined to make its payments this year by aggressively drawing down its foreign reserves, delaying vital investments in the energy industry, and cutting back on imports—even as warehouses and store shelves sit empty. If pdvsa defaults, it will not be able to borrow, and unpaid creditors could seize its global assets, including fuel shipments, tankers, and refineries abroad. The company’s ability to sell oil to the United States, its largest export market, would be restricted because bondholders could take possession of shipments in lieu of payment. And Venezuela would struggle to sell leftover oil to other buyers because, in an already oversupplied global crude market, other exporters are fiercely protecting their existing market shares by pumping as much oil as possible and offering discounts to buyers. As pdvsa struggles to maintain its dominant role in the country’s oil industry, private players are increasingly reluctant to fill the gap. The state company has held majority stakes in most oil projects since the industry was nationalized under Chávez in 2007. Pdvsa is not making payments to its private partners or suppliers, focusing instead on meeting its operating expenses in order to simply stay afloat. Controls on foreign exchange in the country also pose a major obstacle to foreign operators. Although the unofficial exchange rate has risen to more than 1,000 Venezuelan bolivars per U.S. dollar, the government forces international oil companies to adhere to the absurdly low official rate of ten bolivars per dollar for some of their oil sales. In Venezuela, 136 f o r e i g n a f fa i r s

Venezuela on the Brink private energy firms pay an average of 70 percent of their project costs in the local currency, so they have seen their expenses soar as inflation has run rampant. Venezuela’s crisis has rattled the Western Hemisphere. As one of the largest economies in South America, Venezuela has long been a major trading partner for a number of countries, especially Colombia. Since 2005, many Central American and Caribbean countries have relied on Venezuelan aid through the Petrocaribe alliance, through which Venezuela provides them with oil on favorable terms, including low interest rates and a long payback period. As a result, many Petrocaribe members have accrued substantial debts with Venezuela, giving the country political leverage over some of its neighbors. But in recent years, Petrocaribe shipments have declined, and they will likely cease completely if Venezuela’s crisis worsens. Venezuela has also tradition­ ally been an important political power in the region, and its economic woes have undermined regional cooperation through the Organization of American States and other international institutions, dividing the region between Venezuelan allies, such as Argentina, Bolivia, and Jamaica, which have declined to denounce the Maduro government’s inaction, and a few critics, such as the United States, which have received little backing from other countries in the area. Beyond the Western Hemisphere, what happens in Venezuela also matters for global oil markets, which have been volatile ever since November 2014, when Saudi Arabia announced that it would no longer curtail its production to keep a floor under prices. Although prices have recovered from the extreme lows they reached earlier this year, supply has continued to outstrip demand. Production disruptions in Venezuela, as well as in Canada, Nigeria, and elsewhere, have helped support an oil-price recovery in recent months and have moved the market toward a supply-demand balance. A more extensive pro­ duction drop in Venezuela could tip the market into a supply deficit, leading prices to rise further. RUNNING ON FUMES Venezuela’s economic collapse is directly linked to its political upheaval; together, the two developments form a damaging feedback loop, each one contributing to the other in a seemingly endless downward spiral of bad news. It seems increasingly unlikely that Maduro will be able to hold on to power—at least not without resorting to extraordinary September/October 2016 137

Lisa Viscidi measures. In national elections held last December, the opposition coalition, the United Democratic Roundtable (mud), won a majority of the seats in the National Assembly, promising to fight inflation, en­ courage private investment, and decentralize the economy by lifting price controls and gradually moving toward a free-floating exchange rate. The opposition has not put forth many specific energy policies, but its leaders have pledged to increase transparency in the oil sector and end the Petrocaribe aid program, which they claim Venezuela can no longer afford. The mud also promised to oust Maduro within six months by pro­ posing a recall referendum. The opposition has gathered almost ten times the number of signatures required to hold a referendum, and recent polls show that around 75 percent of Venezuelans would vote to remove Maduro from office. But the National Electoral Council, which is controlled by Maduro allies, has delayed validating the signa­ tures, stoking fears that Maduro and his supporters will manage to push the referendum off until next year. Under that scenario, a successful recall would replace Maduro with his more moderate but still loyal vice president, Aristóbulo Istúriz, instead of requiring new elections. (By law, when a president has less than two years left in power, as Maduro will next year, the vice president takes over after a successful recall referendum.) As the economic crisis has deepened and threatened Maduro’s grip on power, the president has not seemed willing or able to take the measures necessary to stem the decline in oil production. Maduro relies heavily on a small group of advisers, but his inner circle is itself divided, with some calling for a more pragmatic approach that would boost foreign investment and others taking a harder, nationalist line. The government has made some concessions: for example, agreeing to give more control over oil project operations to some of its private partners. But these changes have either stalled or not gone far enough. Maduro is facing some internal pressure to step down. Many of his fellow Chavistas blame him for failing to “carry on the revolution.” A more competent and decisive Chavista leader could move forward quickly with reforms to stabilize oil production that would not require any legislative changes. But in order to encourage a significant increase, a new leader would need to signal that he intended to improve conditions for private investment, and this is unlikely to happen unless an opposition-led government takes over. 138 f o r e i g n a f fa i r s

Venezuela on the Brink Maduro’s intransigence has a tragic quality to it, because Venezuela’s economic predicament, although difficult, is not irreparable. A set of relatively simple regulatory and macroeconomic reforms could stabi­ lize production within two years. To incentivize private investment in the energy sector, the government could allow oil and gas companies access to a more competitive exchange rate. (The Venezuelan govern­ ment fixes exchange rates for different sectors of the economy.) Ideally, the government would allow companies access to a floating rate. But even the semi-floating dicom rate, which is currently at about 600 bolivars per dollar, would significantly help energy companies. Venezuela charges energy companies one of the highest tax rates in the world: royalties of up to 33.3 percent of the oil they extract, plus an additional income tax of 50 percent of net profits and a host of other taxes. Altogether, the state winds up taking about 90 percent of the total revenues the firms collect from their oil and gas operations. The state could lower these taxes and fees so that the government’s take would be closer to that in most energy-producing countries, where the state typically collects between 50 and 80 percent of energy revenues. A new administration could also opt to give more financial and operational control to pdvsa’s private partners in joint ventures, for example, by allowing them to choose which suppliers to use. Addit­ion­ ally, the government could establish independently managed escrow accounts for oil revenues to ensure that joint venture partners receive their rightful share of earnings. Authorities have already taken this step for Chevron and a few other companies, but they could extend it to other private partners. The government could also gradually raise domestic gasoline prices to shore up pdvsa’s finances. Even Maduro has shown some willingness to do this: in February, his administration announced the first gasoline price increase in 17 years, from around one cent per liter to around ten cents per liter for lower-grade fuel and 60 cents per liter for premium fuel. The move has saved pdvsa about $800 million, but that represents only a small fraction of the yearly cost of maintaining the government’s massive fuel subsidies. Mean­ while, domestic oil consumption remains very high, diverting oil that could be sold at much higher prices on international markets. CLEANING UP MADURO’S MESS Many members of Maduro’s party understand that moderate adjustments would stabilize the oil sector. But none of them would openly advocate September/October 2016 139

Lisa Viscidi a complete reversal of the Chavista approach to socialist economic management. In contrast, the opposition has stated its intention to move toward more market-friendly policies. Influential academics and experts close to the mud have proposed more far-reaching, longer- term reforms of the oil sector, and the opposition would hope to implement such reforms if it succeeds in ousting Maduro. Looking past the immediate crisis, Venezuela will ultimately need to transform its energy sector if it hopes to avoid a repeat of the current disaster. The necessary reforms include creating an independent regulator to oversee the sector and separating the oil ministry and pdvsa: currently, the head of pdvsa negotiates directly with foreign companies rather than structuring competitive bid rounds run by an oil regulator, which is standard industry practice and ensures trans­ parency and stability for investors. Venezuela also must stop relying on pdvsa’s revenues to fund massive social programs. Although the government can continue to use oil revenues for social spending, as all oil-producing countries do, pdvsa would operate more efficiently and profitably if it focused solely on its oil business. Broader economic reforms would also include gradually dismantling foreign exchange controls and eliminating the system of multiple foreign exchange rates. Eventually, the government will have to drastically reduce fuel subsidies, or even eliminate them altogether. Finally, pdvsa will have to improve its human capital, or it will face a critical shortage of skilled labor and management. With the right reforms, oil production could return to pre-crisis levels within five years, allowing Venezuela to begin importing enough basic goods again and ameliorating the country’s intense shortages. In the long term, the Venezuelan government should look to diversify its economy to end its unhealthy reliance on oil and gas. However, none of that will be possible without dramatic political change in the short term. As long as Maduro or his allies remain in office, there will be little progress; someone else will have to step up.∂ 140 f o r e i g n af fai r s

REVIEWS & RESPONSES Can the Islamic world arrive at some form of Muslim democracy by following a path different from Europe’s? —Malise Ruthven AKHTAR SOOMRO / REUTERS Mosque and State Worth the Trip? Malise Ruthven 142 Eric R. Terzuolo; Sanford J. Ungar 162 How to Fix America’s Infrastructure Recent Books 165 Letters to the Editor 191 Aaron Klein 149 Spain’s Foreign Fighters 155 Sebastiaan Faber

Return to Table of Contents Mosque and State Islam, that she disagreed with the organi­ zation’s decision to issue the statement. The Future of Political Islam Like many other mainstream Islamists, she opposed the Paris attack but felt that Malise Ruthven Islamists should refrain from loudly condemning it because few in the West Islamic Exceptionalism had spoken out after Egyptian security BY SHADI HAMID. St. Martin’s Press, forces massacred 800 Brotherhood mem­ 2016, 320 pp. bers who were peacefully protesting in Cairo in August 2013. “Our blood is Islamism: What It Means for the Middle shed day and night and no one pays any East and the World attention,” she said. “Our blood is licit, BY TAREK OSMAN. Yale University but theirs isn’t. . . . The world’s balance Press, 2016, 328 pp. is off.” In January 2015, after jihadists That sense of imbalance pervades attacked the Paris offices of the Islamist organizations of all stripes. satirical magazine Charlie Hebdo, Perceived as aggressors, they see them­ killing 12 people, European leaders linked selves as victims; condemned as intolerant, arms to lead a procession of millions they complain about intolerance of their through the French capital, chanting views. What is indisputable is that even “Je suis Charlie” (I am Charlie) in an after 15 years during which the inter­ expression of solidarity with the victims section of politics and Islam has been a and contempt for their killers. Muslims major theme in world affairs, Islamism all over the world also condemned the remains poorly understood, especially attacks, as did a number of Islamist in the West. Two recent books tackle organizations, including perhaps the the subject, primarily by considering most influential one—the Egypt-based the crises roiling the Middle East and Muslim Brotherhood, which posted a examining Islam’s role in the turmoil. statement on its English-language Both books succeed in explaining the website denouncing the “criminal attack” dilemmas, paradoxes, and confusion and stating that “true Islam does not facing political actors in the world’s most encourage violence.” volatile region, although each author emphasizes different factors. Not all of the group’s adherents approved of that message, however. A Hamid, an Egyptian American who is month after the killings, a Muslim a senior fellow at the Brookings Institution Brother­hood activist in Tunisia told and who served for a number of years as Shadi Hamid, an expert on political the director of the think tank’s center in Qatar, structures Islamic Exceptionalism MALISE RUTHVEN is the author of Islam in around a specific question: In order for the World. the region’s Muslim-majority states to become liberal democracies, must Islam undergo the kind of reformation through which, in the West, Christianity was ultimately subordinated to the principles 142 f o r e i g n af fai r s

Mosque and State of the Enlightenment, such as freedom the context of rising anti-Muslim of speech, religious choice, and the idea sentiment in the United States and that legal governance should issue from Europe. “Islamic exceptionalism,” the popular will? Or can the Islamic world however, is neither good nor bad. It arrive at some form of Muslim democracy just is, and we need to understand it by following a different path whereby and respect it, even if it runs counter Islam would maintain its centrality as a to our own hopes and preferences. private faith and public discourse even though it would remain at odds in many WATCHING CAIRO FROM TUNIS ways with Enlightenment ideals? Hamid argues that the second outcome is more Although both books delve into Islamic likely. In his view, politics is far more history, they are primarily concerned integral to Islam than to Christianity— with recent developments—especially which has traditionally relied on the the failure of the Arab revolts of 2010–11 God/Caesar distinction to separate the to generate what Hamid terms “a legiti­ holy from the worldly—and thus the mate, stable political order.” That failure Muslim world is unlikely to witness a has resulted in the restoration of au­ replay of the West’s journey toward thoritarian structures and at the same liberalism, which depended on separating time has opened up space for more radi­ church and state. cal forms of resistance, such the jihadist violence of the self-proclaimed Islamic In his book, Tarek Osman, an Egyptian State (also known as isis). Hamid is writer and broadcaster known to British particularly interested in the contests radio audiences for his 2013 bbc series that pitted Islamists against secularists The Making of the Modern Arab World, after the revolts in Egypt and Tunisia considers many of the same issues as that led to the fall of the Mubarak and Hamid. But in contrast to Hamid, who Ben Ali regimes, respectively. After takes a comparative historical approach, toppling their tyrannical leaders through Osman views Islamism through a more popular movements, both countries sociological lens, identifying it as the elected governments dominated by site of a “social battle—over identities, Islamists. But at that point, their paths frames of reference, the role of religion, diverged—although not quite as dramat­ the nature of governance, and the mean­ ically as it might appear. ing of being Arab, Turkish, or Persian.” In the summer of 2013, Egypt’s military Although Osman’s account is more ousted the elected Islamist president, nuanced, Hamid’s approach offers greater Mohamed Morsi. General Abdel Fatah clarity. By exploring the provenance of el-Sisi assumed the presidency and ushered Enlightenment ideals and questioning in the return of authoritarian rule. The their claims to universality, Hamid argues military coup was preceded by massive that Islam is fundamentally different demonstrations—perhaps the largest in from Christianity and that this difference Egyptian history—organized by Tamarod has “profound implications for the future.” (Rebellion), a movement spearheaded He adds: by liberals and secularists alarmed by what they saw as Morsi’s plan to Islamize This admittedly is a controversial, Egyptian society. Egyptian media even troubling claim, especially in September/October 2016 143

Malise Ruthven outlets fanned these anxieties, as In Tunisia, a similar contest between Osman relates: Islamists and secular forces emerged after the dictatorial president Zine el-Abidine Dozens of articles by leading journalists Ben Ali was toppled in January 2011. decried “the path towards becoming Educated elites and the upper-middle Afghanistan.” Artists and prominent classes had long benefited from Ben Ali’s women activists accused the Islamists rule and were adamantly opposed to the of a condescending view of women: long-outlawed but suddenly resurgent “seeing us as mere sexual objects,” Islamist party Ennahda, which won the “they think with their lower halves.” largest number of seats in the elections Some swore to fight for the right of held in October 2011 and formed a coali­ Egyptians not to be led by “imams,” tion government with two left-leaning even if those imams had come to parties. Although Tunisia remained calmer power through the ballot box. Irrespec­ than Egypt during the period of Islamist- tive of the change in the Brotherhood’s led government, it experienced the same thinking and rhetoric since the [mid- level of polarization. Confrontations— twentieth century], its dramatic move sometimes violent—erupted between from being an illegal group to the party Islamists and various secular-minded ruling Egypt left many Egyptians, groups, ranging from the youth activists especially in the upper-middle classes, who had started the original protests to disoriented and fearful. remnants of the Ben Ali regime. The Ennahda government faced a series of Alaa Al Aswany, perhaps the best-known general strikes launched by the country’s contemporary novelist in Egypt and the influential, secular-oriented labor unions— Arab world, warned in a series of articles the first time such strikes had happened that the Islamists were using relig­ ious in more than three decades. In 2013, slogans to convince the lower-middle mass protests erupted after the daylight classes and the rural poor—traditional assassinations of two opposition leaders, Brotherhood supporters—that being a Chokri Belaid and Mohamed Brahmi, “good Muslim” meant supporting a which were widely blamed on hard-line conservative agenda that ran counter to Islamists. The ensuing political crisis, Egypt’s “long, beautiful, resplendent, fueled by opposition parties that blamed and plural identity.” Osman sees this Ennahda for being “soft” on Islamist polarization, fanned by “media organiza­ violence, was resolved only when the tions with close links to Mubarak-era Ennahda-led coalition stepped down power groups,” as crucial to the public and was replaced by a caretaker govern­ delegitimization of Morsi’s government, ment in October 2013. which was already reeling from the collapse of foreign investment and tourism. The The main catalyst for Ennahda’s stage was set for the coup after Morsi decision to give up power may have been responded to such challenges by issuing watching the coup unfold in Egypt, a constitutional declaration granting which concentrated Islamist minds hims­ elf unlimited authority to enact greatly in Tunisia. As an Ennahda legislation and investing his presidential deputy told Hamid: decrees with retroactive immunity from executive or judicial review. We’re sorry for what happened in 144 f o r e i g n af fai r s

Egypt, but it led to a result which Not all readers was in a kind of way positive for our are leaders, base. They saw how the Brotherhood’s but all leaders insistence on unilateral acts might are readers. benefit you in the short term, but you lose in the long run. Your existence - Harry S. Truman in the political scene is tied to the guarantee of democracy. SIGN UP for the Foreign Affairs In addition to dissolving its ruling coalition, Ennahda also took an accom­ Books & Reviews modating approach to the process of newsletter drafting a new constitution, which had begun in 2011 and continued under the ForeignAffairs.com/newsletters caretaker government. The Islamists compromised on a number of critical areas, dropping their demands that the new constitution criminalize blasphemy, cite Islamic law as the source of legisla­ tion, give men the right to marry more than one woman, and refer to women as “complementary,” rather than equal, to men. These were major concessions that sacrificed core elements of the Islamist agenda. What is more, there was a good deal of public support in Tunisia for making religion more central to governance, even after the Islamists had stumbled while in power. In 2014, a Pew Research Center poll found that more than half of Tunisians believed that the country’s laws should “follow the values and principles of Islam”; 30 percent of respondents took an even more conservative position, agreeing with the statement that laws should “strictly follow the teachings of the Koran.” Ennahda, however, seems deter­ mined to survive Tunisia’s transition to democracy even if doing so requires adopting a de facto separation between religion and government. At a party congress in May, its members over­ whelmingly supported a motion to 145

Malise Ruthven separate the group’s political affairs that his movement could survive only from its religious and cultural activities, through compromise. while retaining Islam as its primary ideological source. IMMODERATE TIMES Among modern Middle Eastern Ennahda’s pragmatism and gradualist states, Tunisia may be unique in several approach run counter to the religious respects. It experienced a long period fervor of the many Islamists who have of secular government and institutional joined the jihadist droves flooding state building, first under its founder, Iraq and Syria; indeed, it might be no Habib Bourguiba, who negotiated the coincidence that Tunisia is one of the country’s independence from France largest suppliers of foreign jihadists to during the 1950s, and then under his those countries. Ennahda’s accomoda­ successor, Ben Ali. Tunisia also has the tionism is out of sync with the messianic advantage of having an Islamist leader and utopian currents that are coursing of rare intellectual stature in Rached through Islamic thought today, anchored Ghannouchi, co-founder of Ennahda in the belief that the word of God, as and the group’s guiding force. After revealed to the Prophet Muhammad in returning to Tunisia in 2011 follow­ the Koran, is destined to supplant the ing more than 20 years of exile in the flawed or distorted versions of divine United Kingdom, Ghannouchi has locutions preserved in the Jewish and apparently come to see that his move­ Christian Scriptures. The theological ment’s survival—and perhaps that of problem such extreme views pose can Islam itself—depends on some level of be addressed, if not resolved, through separation of mosque and state. As sophisticated discussion between Hamid argues, the basic project of religious specialists. But the social Islamist movements such as Ennahda forces unleashed by religious passions is to “reconcile premodern Islamic law are proving much harder to contain. with the modern nation-state”—a nego­ tiation in which the state usually gets The Sunni Muslim tradition suffers “the better end of the deal,” Hamid from an especially acute problem that writes, because the very process of state stems from what I have referred to building, buttressed by the international elsewhere as “the argument from manifest system of state recognition, is inherently success”—the notion that the absolute secularizing and forces Islamists to limit truth of the Koran and the rectitude of their ambitions. Muhammad’s mission were proved by the success of the Arab conquests in the That, of course, did not happen Middle East that followed the Prophet’s in Egypt. The difference in the two death in 632. That view, which took countries’ outcomes may be attributed, hold during centuries of hegemonic in part, to differences in the qualities Islamic rule in the Middle East and of their Islamist leaders. In Egypt, the North Africa, has been difficult to square increasingly paranoid Morsi tried to use with the unpalatable reality that during the presidency and the state apparatus the nineteenth and twentieth centuries, to face down his liberal opponents. In virtually every part of the Islamic world Tunisia, by contrast, Ghannouchi saw came under the rule of Christians—and, 146 f o r e i g n af fai r s

Mosque and State in one particularly contentious case, of based Egyptian scholar Sheik Yusuf al- Jews—whose beliefs were supposed to Qaradawi. In their analyses of the have been superseded by the finality problems facing Muslims, Qaradawi of Islam. and other hard-liners tend to reduce a century and a half of complex inter­ Osman admirably captures how the actions between Islamists and the state gap between the vision of Islamic to a simple confrontation between supremacy and the reality of Muslim Islam and secularism. Dismissing subjugation has fueled in Islamist circles social polarization, conflicting iden­ a mixture of anger, nostalgia, and disen­ tities, and opposing views of national chantment with pragmatists such as security or economic challenges as Ghannouchi. Although a majority of mere secondary issues, Qaradawi and Islamists may have come to accept the others favor a narrative that sets “the reality of the modern nation-state, Osman Islamists’ rise and fall in a much longer notes that most have not yet abandoned historical context,” in which the abolition of the Ottoman caliphate by Kemal the notion of seyadat al-Islam: Islam’s Ataturk after World War I becomes “an sovereignty and its superiority over affront to God’s rule,” Osman explains. any other religious and man-made framework. This . . . means that The emphasis on victimhood and beneath the acceptance of equal loss—which can be remedied only by citizenry and secular nationality as vindication and restoration—also the basis for an individual’s belong­ defines the vision of violent jihadists, ing to any society lurks the idea that such as the self-styled caliph of isis, any non-Islamic social or political Abu Bakr al-Baghdadi. In a recorded frame­work is threatened by its status sermon released on the Internet last as inferior, if not flawed. year, Baghdadi urged Muslims to leave the “abode of war” (comprising all Ennahda’s “official rhetoric intelligently the “infidel” lands, including those adheres to the vernacular of any party governed by nominally Muslim leaders) functioning in a secular democracy,” he and join isis in the only true “abode writes, but it is not clear how long it of Islam.” “We call upon you so you will succeed in sustaining this posture leave the life of humiliation, disgrace, in the face of “the reality that Salafist degradation, subordination, loss, empti­ jihadist ideas have captured significantly ness, and poverty [for] a life of honor, large areas of the Islamic world.” He respect, leadership, [and] richness,” maintains, however, that considering Baghdadi declared, promising new the persecution that party members recruits “victory from Allah and an had suffered prior to 2011, Ennahda imminent conquest.” had done “the best that could have been achieved in a short space of time.” THE IRAN PROBLEM Still, the group’s quotidian language How can the Muslim world escape the and modest accomplishments pale in dual curse of secular authoritarianism comparison to the soaring rhetoric and and religious extremism? Hamid lofty aspirations of more hard-line persuasively challenges the idea— Islamists, such as the influential Qatar- September/October 2016 147

Malise Ruthven advanced by the activist and writer only the European path toward Ayaan Hirsi Ali, among others—that modernity, by way of reformation, Islam must undergo a reformation akin would be to note that even Europe to the Christian one. As he writes, didn’t really follow that path—at least “lessons learned in Europe” are not as it is often portrayed. The Enlight­ necessarily applicable in the Middle enment was the outcome not only of East. There is a curious absence in the Reformation but also of centuries his book, however: Iran, which for of violent religious conflict, after nearly 40 years has served as the which sensible people concluded that clearest testing ground for political they were not improving their lots by Islam. Hamid claims that Iran falls killing one another in the name of outside the scope of his study because God. That is the grim lesson that the ideas that guided the Iranian Muslims in the contemporary Middle Revolution are relatively recent Shiite East may yet find themselves learning innovations, whereas he is concerned from European history.∂ with only the Sunni world. But he overplays the importance of that distinction, and it is far from certain that his thesis about Islamic excep­ tionalism could survive an analysis of Iran without severe modification. In Iran, which arguably boasts the world’s only Islamist government, clerical governance has led to a steep decline in religious observance; in 2011, the Iranian Ministry of Culture and Islamic Guidance lamented that after more than 30 years of theocratic rule, only three percent of Iranians attended Friday prayers. (Prior to the revolution, the figure was almost 50 percent.) And yet Iranian society and governance have not liberalized in any meaningful ways: the theocracy represses dissent at home and supports militants abroad, such as the Lebanese group Hezbollah. This poses a problem for Hamid’s view: put simply, the argument that political Islam can evolve into Muslim democracy would be more persuasive if the world’s most prominent Islamist country offered more impressive evidence of that possibility. Perhaps a better way to rebut the idea that the Islamic world can follow 148 f o r e i g n af fai r s

Mexico’s RTMHEEVEXEISCATOLRIE’NSNGMGUTSHCLE Transformative Urban Direction in partnership with Mexico’s urban future is being built on bright and luminous accommodation units. a fundamental shift in practice: developers “We are now working towards building and the government are committed to building sustainable, smart, efficient, and inclusive cities that provide the basic benefits interconnected cities under the changing face of agglomeration: lower transportation of housing and urbanism. costs, security, better schools, lower carbon emissions, innovation clusters and proper After more than 50 years of government public services. But above all to rescue the initiatives to fulfill much-needed social housing, citizens’ dignity by tackling overcrowding and coupled with the effects from the US crisis, violence caused by families living in one same incoming President Enrique Peña Nieto was room.” prompted to immediately enforce a National Housing & Urban Development Policy in 2013. For this highly urbanized country – three Its objective was to shift the government’s out of four Mexicans live in cities, of which focus from single-family to vertical housing. almost 60% live in 59 Metropolitan areas – Rosario Robles, Minister of the newly created the urban reform is committed to the United Ministry of Agrarian, Territorial and Urban Nation’s HABITAT III New Urban Agenda for Development, claims its impact is aligned the 21st century. with more urban development. “This housing policy devises housing as an organizational It is a tall order indeed, Robles agrees, instrument, as an axis to build cities and not “Habitat III puts human rights to the forefront only houses.” and we believe it’s a new generational need to be incorporated in our Magna Carta.” Moreover the policy establishes contention perimeters for new and existing housing, Leaders agree the turning point in urbanism including services and facilities linked to was the creation of the Ministry, which provides attractive subsidies aimed at re-densifying the coherence, structure and development to the metropolitan zones. sector. What is underway remains the total recovery of state rectory, centralizing compact, Indeed, it was a far cry from the social sustainable and resilient housing commitments, housing options provided some decades ago and adhering to the creation of one million when most of the population couldn’t afford homes in the most impoverished regions. homes, and the prospect of a home in the suburbs led to millions of city residents to The immediate challenge is to resolve flee to remote urbanizations. With housing the metropolitan management and planning, agencies doling out subsidized mortgages and which currently cannot be undertaken healthy relocation packages, social housing individually by municipalities as the laws that construction made a much-needed transition. apply are from the ‘70s and happened prior to the urban sprawl. “Progress towards diminishing the housing deficit was achieved, but the model was “Metropolitan planning will allow us unsustainable. People moved away from the to reorganize the land equipped with pick of the jobs and services, increasing traffic, infrastructure, contribute to sustainability, reducing productivity and, in all, quality of and avoid the occupancy of risk zones,” living. Urban stains were created and we now explains Robles. need to fix the scars of abandoned properties and social segregation,” says Robles. Blatant strides are being taken towards the Smart City concept in line with the creation of Grey hills swamped by precarious self-built a long-term holistic 2030 Vision. shacks, where entire families live in one single room, now aim to be replaced with better, “For many years planning was overlooked. Now we are working towards compact cities – and some progress has been made - we need to instill this way of thinking in mayors Sponsored Section

and governors. This will definitely be the RECOVERED TRUST, Reinvigorating hardest part.” Housing Prosperity Paloma Silva, General Director of the Robles’ staunch commitment to the recently National Housing Commission, explains that promulgated “Special Economic Zones” (SEZ) the positive data is a result of a concerted Law aimed to foster economic development effort between the private and public sector. in four lagging regions in the south of Mexico “We have applied resources responsibly is to address the gap between the north and in an efficient and transparent manner, the south of the country. The transversal, enabling to overcome housing deficit, ensuring institutional project includes the deployment decent housing, in line with the Mexicans’ of important investments in infrastructure needs, helping them consolidate their heritage and the establishment of special labor, fiscal and to prosper. and trade conditions to firms establishing in Mexico is exemplary proof of how emerging those Zones, with the objective of attracting nations can drastically overturn direction industrial investments in those regions. with the right reforms in place. Since President SEDATU will be investing $537 million dollars Enrique Peña’s appointment in 2012, he in the SEE and 59 metropolitan areas. has partnered with Congress to approve a total of 11 key structural reforms, each aimed “We will be working along with the Ministry at uplifting productivity, expanding citizen of Finance towards the urban development rights, and essentially consolidating into a component - demand for homes, schools, more efficient democracy. services - which we want to anticipate and “The federal government has shown a plan in order for them to be forward-planned strong commitment with this sector. At the and avoid errors committed in the past. beginning of 2015, President Peña announced fiscal and financial measures supporting “We will help to overcome lags, promote housing financing and development with aims legal certainty and attract investments.” to provide 1.1 million new housing solutions with an expected investment of $19.85 billion. Housing Macroeconomics By the end of year the figure increased to Macroeconomic stability has certainly $22.75 billion, resulting in the creation of 1.3 contributed to housing and urban development million housing solutions, a 14.6% increase to market stability. Mexico has achieved the announced investment,” says Silva. significant progress in macroeconomic stability Housing market problems are not easily over the last decade, with relatively the low fixed; the ruling administration’s well-intended inflation rates around four percent (+/-1), low structural reforms should boost both the interest rates, healthy public finances, and a country’s productivity and competitiveness, solid banking system that stimulates business and it should also generate sustainable investment and supports consumer sentiment economic growth in the region of five percent and spending. It should come as no surprise and upwards by 2018. that this year’s expected GDP growth will Having braved the US housing crisis most likely not surpass 2.6 percent. Experts relatively well due to the fact there was no from international financial institutions and price bubble in Mexico, the sector fought hard major world economies under the Financial to keep pace with lending both to mitigate Stability Board Program (FSB) have recognized the decline in housing supply and to secure its the strength of the Mexican financial system, affiliates’ access to housing. which can be explained by recent years’ efforts The market today is a complete to improve financial regulation and supervision. transformation from the crisis-stricken Among all of the G20 countries, Mexico is climate of 2008-2013. Bolstered by its fair one of the best placed by the IMF regarding share of macroeconomic stability, Mexico economic overheating indicators, showing no has solid economic fundamentals that should internal nor external financial risk factors. allow the country to cope with any global The housing sector represents 14% of adversities. The federal government has also the GDP in goods and services with a more demonstrated sound financial responsibility in prominent participation than agriculture, the face of crisis and managed to adjust public education and mining. It employs close to three million people, directly or indirectly, or 7.3% of the nation’s workforce. Sponsored Section

expenditures accordingly in an enduring low was founded in 1972 as an autonomous oil price environment. organization. Its institutional governance consists of the equal representation of workers, “Due to Mexico’s macroeconomic stability, employers and government. David Penchyna, both commercial banks and governmental its new Director General, explains that the institutions are increasingly becoming credit organization allows Mexico’s workforce to lending for the housing sector. On the one boast one of the largest mortgage lenders in hand, commercial banks are lending more the world and the largest in Latin America.The money for the high-end market. On the other, institution, which started operations in 1972 governmental institutions are fostering credit has granted 88,000 credits. Forty-four years for developers and both subsidies and more later, Infonavit has consolidated its existence credit for low-income households,” says Silva. following the granting of its nine millionth credit. The government is also expanding its “Housing is the basic axis for social inclusion solutions to build better and more sustainable and the first item on the agenda of policies housing closer to city centers, where jobs aimed at improving family welfare. To this end, are more readily available and transportation Infonavit has become the most solid financial costs are lower. It is leading the way in institution of the social security system promoting better coordination from all the based on the government’s efficient austerity relevant stakeholders, which will ultimately scheme. It provides for Mexican workers’ bring people to consider formal jobs, improve current housing needs through cheaper loans the sector’s productivity and overall quality with installments that better meet their of life for the average citizen. payment facilities. Consequently, the Institute’s consolidation is based on the implementation The vertical housing segment, in parallel, has of actions that respond to the workers’ housing received an impressive push - its share in the demands and not the supply.” Unique Register of Housing has increased from SHF: The private sector trigger. Mexico’s eight percent during the 2007-2010 period to Housing Development Bank (SHF) has become 27 percent from 2013-2016. the sector’s leading bank, in line with its General Director’s well-defined objectives Since not all investment can come from the for 2018. Jesus Alberto Cano says, “It is a government, the sector is actively seeking to structured, well-capitalized bank in tune with attract private investment from the US and its legal mandate: to boost the housing sector.” Europe. Real estate companies operate with After the crisis in 2008, SHF received a non- shares and other companies with emission performing loans ratio of above 50%. When trading. The REITs (Real Estate Investment Cano assumed the management of SHF, the Trusts) market has been triggered, and there bank’s role – apart from managing its loan is also a big opportunity for investors willing portfolio – was not all that clear. to promote the development of sustainable “We realized we had to make our products housing through green bonds that housing more flexible and go out to find our clients developers will start submitting very soon. and help the private players in housing.” As a result, direct or induced credit granting has FINANCING UNIQUE HOUSING & grown fast. Last year, SHF placed more than URBAN DEVELOPMENT $5 billion more than the nine times placed in Long-term financing and mortgages are 2012. SHF’s performance has mostly been felt the catalysts for the entire housing process. in the housing construction sector. The financial system is undergoing constant FOVISSSTE’s mission: home shortage development, including the saving and pension eradication The National Housing Fund for fund schemes. In 2016, it shows optimistic State Workers (FOVISSSTE) has committed trends with resources flowing from banks to itself to eradicate the housing deficit in the national housing organizations’ loans. country with 120,000 loans destined to The transformation of the urban housing policy promote housing actions for both new and is thanks to well-oiled teamwork between the used houses. national housing organizations. Luis Antonio Godina, General Director of the The directors of these organizations share their optimism below. INFONAVIT: The Institute of National Housing Fund for private sector Workers Sponsored Section

Fund, will meet objectives with an investment market leaders who have embraced the overall of more than 40 billion Mexican pesos ($2.11 new direction of the sector, shifting from sorely billion) in the form of 80,000 loans per annum building homes to building fully integrated which is valued in 110 billion pesos ($ 5.8 communities and/or small smart cities. billion) Since President Peña Nieto has been in power, Carlos Medina, President of the National $5.81 billion worth of loans have been granted Chamber for Housing Development & to this end – approximately 80,000 loans per Promotion, justifies their success thanks to annum. the flexibility in joint decisions being taken between the public and private sectors. He REAL ESTATE BUOYANCY says, “The sector has enjoyed ongoing growth Mexico´s real estate market has been during the past 24 months. It is therefore buoyed by a return in strong demand in resort essential for us to continue working together communities in 2015 from American and to boost housing in a fashion that contributes Canadian buyers after a several-year slump, to the creation of sustainable cities in line with thanks to low oil prices and the strong US government incentives which will motivate dollar, pushing home values up. the private sector to keep on creating worthy American buyers are very important homes for Mexican families.” consumers as they are owners of beachfront properties, which were badly affected by the Carlos Medina, President of the National slump of 2009-10 in areas like Baja California Chamber for Housing Development & Sur, Baja California, Guerrero, Nayarit and Promotion, justifies their success thanks to Sinaloa. the flexibility in joint decisions being taken However, there is a huge domestic market between the public and private sectors. He that is steadily aided by the government says, “The sector has enjoyed ongoing growth investing in housing and tax reform; these are during the past 24 months. It is therefore forecasted to continue enjoying double-digit essential for us to continue working together growth figures this year. to boost housing in a fashion that contributes Ara, Sadasi, Javer, Cadu,Vinte and to the creation of sustainable cities in line with Construkom are just a few of the competitive government incentives which will motivate the private sector to keep on creating worthy Thanks to our sponsors homes for Mexican families.” For full interviews and report please see: https://www.foreignaffairs.com/country-focus/mexico-s-urban-future Information: [email protected]

Return to Table of Contents How to Fix deficient or obsolete. Bridges are carrying America’s more traffic, with heavier vehicles, than Infrastructure they were originally designed to handle, and in 2013, the average bridge was Build, Baby, Build 42 years old. Aaron Klein The problem with the United States’ infrastructure is much broader than faili­ng The Road Taken: The History and Future bridges. The nation’s roads are congested of America’s Infrastructure and full of potholes. In 2014, the typical BY HENRY PETROSKI. Bloomsbury, urban commuter spent 42 hours stuck 2016, 336 pp. in traffic, up from 20 hours in 1984. Americans consumed over three billion Just after 6 pm on August 1, 2007, at gallons of gas as they sat in gridl­ock for the peak of rush hour, 111 vehicles almost seven billion hours, at a cost of were driving across the I-35W bridge $160 billion in wasted fuel and time. over the Mississippi River in downtown Minneapolis when a thin metal plate In March, meanwhile, the entire in the bridge’s central span ripped. The subway system of Washington, D.C.— bridge collapsed, plunging vehicles and the second-largest in the country—was passengers into the river more than 60 completely shut down for a day for emer­ feet below. Thirteen people died, and gency safety inspections. The inves­ 145 were injured. tigation exposed so many problems that officials have warned that they may This was not an isolated incident. In have to close large parts of the system May 2013, a bridge on the I-5 north of for as long as six months for repairs. Seattle collapsed, injuring three people, when a truck carrying an oversize load The root of the crisis is clear: the crashed into it. And in February 2015, United States has underinvested in its a chunk of concrete fell from the bottom infrastructure. The federal gas tax is the of the I-495 overpass in Maryland, crush­ main source of federal funding for roads, ing a car. bridges, and subways. But Washington has not increased that tax, of 18.4 cents These incidents should not have come per gallon, since 1993; in real terms, its as a surprise: according to the American value has thus fallen by over 40 percent. Society of Civil Engineers, a quarter of Expert groups such as the American the United States’ bridges are structurally Society of Civil Engineers, business associations such as the U.S. Chamber AARON KLEIN is a Fellow in Economic of Commerce, and unions such as the Studies and Policy Director of the Initiative on afl-cio have all called for trillions of Business and Public Policy at the Brookings dollars of new investment. But Wash­ Institution. ington has failed to act. The Road Taken, a timely and insight­ ful book by Henry Petroski, a professor of civil engineering and history at Duke University, helps explain why Washington has been unable to solve this problem. September/October 2016 149

Aaron Klein In part a history of infrastructure, in part them might be exercised an appeal for greater investment, Petroski’s with signal advantage to book offers a rare engineer’s perspective the general prosperity.” on a debate too often dominated by Still, five years later, economists and politicians. Yet engineers Monroe vetoed a bill can do only so much on their own. A that sought to repair a healthy national infrastructure requires road running from Cum­ not just competent engineers but also a berland, Maryland, to government—and a public—willing to Wheeling, in what was pay for it. then western Virginia, arguing that the states LICENSE TO BUILD through which the road passed should pay for it In the years after independence, the because Congress lacked Founding Fathers debated whether the authority to do so. His the Constitution allowed the federal veto helped end the Era government to play a role in funding of Good Feelings, when what were then referred to as “internal the country was united improvements.” In 1791, Treasury behind one party, the Secretary Alexander Hamilton delivered Democratic-Republicans, the famous Report on the Subject of Manu­ and contributed to the factures to Congress, in which he argued revival of partisan politics. that “many internal improvements of primary magnitude might be promoted From that point all by an authority operating throughout the way up to the early the Union, which cannot be effected as twentieth century, Wash­ well, if at all, by an authority confirmed ington provided little within the limits of a single State.” funding for roads and bridges. Yet with the growth in automo­ Hamilton’s view was rejected by biles, the building of the Panama Canal, President James Madison and his and, in 1907, a favorable ruling from the successor, James Monroe, who both Supreme Court in Wilson v. Shaw on vetoed major infrastructure legislation the constitutionality of federal spend­ passed by Congress. They believed ing for infrastructure, public support that the Constitution did not grant grew for federal action. In 1916, U.S. the federal government the authority President Woodrow Wilson signed the to fund infrastructure and that it would landmark Federal Aid Road Act, the take a constitutional amendment to nation’s first federal highway funding establish that authority. Yet as he vetoed legislation. Five years later, the Federal the legislation in 1817, Madison acknowl­ Highway Act of 1921 mandated a national edged the need for infrastructure invest­ highway system. ment, writing, “I am not unaware of the great importance of roads and But the real heyday of federal action canals and the improved navigation of came with the presidency of Dwight water courses, and that a power in the Eisenhower. In 1919, as Petroski writes, National Legislature to provide for Eisenhower had traveled in a military 150 f o r e ig n af fai r s

convoy from Washington, D.C., to defense, the name of such system is San Francisco and was dismayed by hereby changed to the National System what he saw. Later, during World War II, of Interstate and Defense Highways.” he encountered firsthand Germany’s superior Autobahn. After the war, as Eisenhower’s highways were part of a president, he made infrastructure series of great infrastructure projects that spending a priority. In 1956, he signed helped usher in unprecedented prosperity. a law that established the interstate Government investment and private highways that still traverse the United entrepreneurship laid railroads across States. Eisenhower saw infrastructure the continent; built huge power plants, as both an economic and a national such as the Hoover Dam; and provided security priority. On the campaign universal phone coverage. Those projects trail, he had argued that “a network of generated economic growth and united modern roads is as necessary to defense the nation. as it is to our national economy and personal safety.” The law itself made a But they required public investment, similar point, reading, “Because of its and in recent years, that has been lacking. primary importance to the national Since Eisenhower launched the inter­ state highway system, and President Ronald Reagan expanded it, the national September/October 2016 151

Aaron Klein gas tax has served as the main source of at the state level to decide which federal funding for highways, bridges, projects to fund. and public transit. The gas tax used to generate substantial revenue, and it Congress did occasionally pick could still raise significant funds now projects itself, through a process known to upgrade the country’s roads, fix its as “earmarking.” Although earmarking bridges, and expand its transit systems. always made up a relatively small portion Gasoline sales are at an all-time high. of overall government spending, well Although electric cars may one day under five percent, it grew dramatically: dominate the roads, today they make there were six earmarks in a 1980s high­ up less than one out of every 1,000 cars, way bill and over 6,000 in a similar bill and suv sales are at record levels. Yet in 2005. The most famous earmark was Congress has not raised the tax in more the “bridge to nowhere,” a proposed than 20 years. Since the tax is not $400 million project in Alaska, which indexed to inflation, the rate actually prompted so much outrage that Congress declines in real terms every year. In ultimately banned the practice of earmark­ 1993, it made up almost 20 percent of ing. This has shifted even more control the price paid at the pump; today, it over infrastructure spending to the makes up around seven percent. federal executive branch and to elected officials at the state and local levels. In 2009, U.S. President Barack Obama signed an $800 billion stimulus At those levels, Petroski demonstrates, bill. It provided some additional infra­ vocal minorities wield great influence structure funding, but, as Petroski points over infrastructure choices, often in out, only four percent of the bill’s total undesirable ways. Take speed bumps on went to transportation projects, roughly local roads. Small groups of committed the same amount of federal investment in citizens who want to discourage speed­ a non-stimulus year. Instead, Washington ing in their neighborhoods often push used most of the stimulus for temporary for municipalities to install such obstacles. tax cuts for individuals and businesses, But as Petroski points out, the money amorphous “aid to the states,” and a host spent on them could be better used to of other initiatives unrelated to infra­ fill potholes. Speed bumps, he writes, structure investment. The United States create “a classic infrastructural dilemma is still waiting for a genuine infrastruc­ of choice: to spend money deliberately ture stimulus. raising for a complaining individual or small group an otherwise undesirable BRIDGE TO NOWHERE bump in the road—or to spend it for the good of all by filling unwanted holes Even when Washington has invested in the pavement.” in public infrastructure, the results have sometimes been disappointing. Given these problems with the Historically, the federal government political processes that shape infra­ has funded infrastructure projects by structure, it’s worth considering whether distributing money to the states, thus engineers ought to have more influence empowering state legislatures and on decisions about what to build and how bureaucrats in the executive branch to pay for it. After all, a 2013 Pew Research Center poll found that 63 percent of 152 f o r e ig n af fai r s

Americans believe that engineers con­ Deforestation tribute “a lot” to society, a figure that in the Amazon far exceeds that for public trust in government, which has hovered at A CFR INFOGUIDE PRESENTATION around 20 percent for several years. Go on an immersive journey through Yet left to their own devices, Brazil’s Amazon rainforest to explore engineers often overshoot their budgets, the country’s challenges in controlling creating “signature projects” that priv­ and reversing deforestation. ilege aesthetic choices over the cost of www.cfr.org/amazon construction and maintenance. Petroski never resolves how to balance these 153 competing incentives. Policymakers should give engineers free rein to innovate within a constrained budget. Both should ensure that decisions made at the beginning of a project, which have an outsize impact on its success or failure, are not just cost effective in the short run but likely to yield low operating and maintenance costs in the long run. ON THE ROAD AGAIN The problems that plague American infrastructure are deep­seated and complex. Yet there is a way out. Washington and the public must recognize that world­class infrastruc­ ture does not come cheap. High­ quality infrastructure is vital to global economic competitiveness, and the United States is falling behind. The United States invests less than two percent of its gdp in infrastructure; Europe, by contrast, invests five per­ cent. Furthermore, the bureaucratic system that oversees public infra­ structure spending has become hope­ lessly “siloed,” with separate agencies at each level of government dedicated to different modes of transport. Each has its own stakeholders, champions, and opponents. It’s a wasteful, inef­ ficient system; reforming it will require several steps.

Aaron Klein First, governments should eliminate would later have to repay. Eisenhower, silos. A unified department should merge thinking it necessary to make his pro­ the federal highway, transit, aviation, posal politically palatable, proposed maritime, and railroad administrations; relying on bonds. Yet Congress instead the Army Corps of Engineers, which chose the former, asking Americans to controls investment in ports; and the pay more than their fair share to lay Environmental Protection Agency’s water the groundwork for the prosperity of programs, which provide federal fund­ future generations. Presidents from ing for sewer systems and drinking both parties—Eisenhower, Reagan, water. This unified depart­ment of infra­ George H. W. Bush, and Bill Clinton— structure should incentivize state and have raised the federal gas tax and local authorities to make smarter choices increased infrastructure investment. with federal funding. For instance, it The public is much more willing to could coordinate the timing of different support user fees that are dedicated to projects, such as a sewer-line expansion infrastructure projects than amorphous and a road repair, so that the govern­ tax-and-spend proposals. So today’s ment has to dig only once. It should Republicans need to exempt user fees, also consider instituting a so-called such as the gas tax, from their broader corridor-based approach, similar to “no taxes” mantra. And Democrats need the one the United Kingdom uses, in to accept that the gas tax is meant which the government evaluates a set solely for infrastructure and not for of projects designed to solve a particu­ other purp­ oses (in 1993, Clinton raised lar problem and chooses the most cost the gas tax for deficit reduction). effective among them. For example, to improve the flow of people between Finally, policymakers should not fear Washington, D.C., and New York City, the private sector. Good ideas frequently policymakers should comp­ are the costs come from sources outside the govern­ and benefits of investing in highways, ment. Cities and states should allow high-speed rail, increased airport capac­ both the public and the private sectors ity, and more efficient freight rail and to submit unsolicited proposals for shipping to decide how best to solve the innovative infrastructure projects. Of problem, rather than doling out funds course, these projects would have to be to each of the various trans­portation rigorously and publicly evaluated. But agencies without coordination. the fact that private companies are moti­ vated by profit is no reason for the Perhaps most crucial, however, is the government to ignore them. need for the United States to invest more. For some time now, it has been The United States has reached a fork depreciating its capital stock, free-riding in the road. It can let its infrastructure on the efforts of past generations. When crumble, its bridges collapse, and its previous generations built the interstate roads grow ever more congested. Or it highway system, they faced a choice: can raise the gas tax, allow people to pay for it themselves with a large gas travel faster and more safely, and grow tax and bequeath it to their children, or its economy. Which path Washington issue bonds that they and their children chooses will make all the difference.∂ 154 f o r e ig n af fai r s

Return to Table of Contents Spain’s Ibárruri. At the unveiling, Mayor Gavin Foreign Fighters Newsom addressed the crowd. “The spirit of the Abraham Lincoln Brigade,” The Lincoln Brigade and he declared, is “a legacy that we have the Legacy of the Spanish inherited.” The microphone was later Civil War passed to one of the 11 surviving American veterans of the war in attendance. At Sebastiaan Faber the age of 21, Abe Osheroff had traveled from his home in Brooklyn to fight in Spain in Our Hearts: Americans in the Spain. In his speech, the 92-year-old Spanish Civil War, 1936–1939 left no doubt that his view of the world BY ADAM HOCHSCHILD. Houghton hadn’t changed. “The bastards will never Mifflin Harcourt, 2016, 464 pp. cease their evil,” he growled from his wheelchair in a heavy New York accent, On March 30, 2008, several “and the decent human beings will never hundred people gathered at the stop their struggle.” waterfront in San Francisco. They had come to witness the unveiling Not long after San Francisco put up of a monument to the Abraham Lincoln its monument, the Spanish port city of Brigade: 2,800 Americans who joined Santander took one down: an equestrian some 35,000 other volunteers from more statue of Franco, who ruled Spain with than 50 countries to defend the Spanish an iron fist from the end of the war until Republic against fascist forces during his death in 1975. That his likeness had Spain’s civil war. The conflict, which remained standing for more than three raged from 1936 until 1939, led to the decades after his demise suggested that deaths of around half a million people, not everyone in Spain shared Osheroff ’s including at least 750 Americans, and ideas about good and evil. Indeed, to this ended with the victory of General day, many Spaniards continue to look back Francisco Franco’s Nationalist faction. on the Franco era—and on the dictator himself—with some fondness. In 2006, The monument, a 40-foot-long steel the Spanish newspaper El Mundo reported structure, contains rows of translucent that, according to a poll it had conducted, onyx blocks encased with written texts a third of the Spanish public believed and photographs. “It’s better to die on that Franco was right to over­throw the your feet than to live on your knees,” republic. No surprise, then, that not reads one, with the words attributed to everyone in Santander was happy to see the Spanish Communist icon Dolores the statue of Franco torn down: as workers readied their torches and drills, a group SEBASTIAAN FABER is Professor of Hispanic of protesters laid flowers in memory Studies at Oberlin College. of their beloved caudillo. Even the city’s government was less than thrilled; it had decided to remove the statue only after prodding from Spain’s parliament. Such ambivalence might seem strange given the well-documented ills September/October 2016 155

Sebastiaan Faber of Franco’s tenure. But avoiding a direct government would provide some assis­ confrontation with the recent past had tance to family members seeking the been a crucial ingredient in Spain’s remains of loved ones who had perished transition from fascism to democracy. in the civil war or at the hands of Franco’s While in power, Franco had arranged regime. And it made it easier for foreign for King Juan Carlos I to succeed him, volunteers who had helped defend the and after Franco’s death, Juan Carlos republic, such as Osheroff, to obtain ascended a throne that had been vacant Spanish citizenship. since 1931. As soon as the monarchy was restored, however, the king turned Despite growing public sentiment around and negotiated an agreement in favor of such a shift, legislators from with Spain’s opposition parties to ensure the country’s center-right opposition a peaceful three-year transition to democ­ party, the Partido Popular (pp)—which racy. Among the pact’s key elements was founded by a former Franco-era was a general amnesty for representatives minister—voted against the bulk of the of the regime and for members of the law’s provisions. During the debate in anti-Franco opposition. This amnesty parliament, a pp senator condemned enjoyed broad popular support: having the law as “unnecessary,” “useless,” and finally been freed from Franco’s rule, “senseless” and said that by “break[ing] few Spaniards at the time were interested the constitutional pact,” it would inspire in settling accounts, correcting the record, “dissention and discord.” The legislation or providing justice for the regime’s many passed anyway, but Osheroff never got victims. As a result, most preexisting a chance to file for Spanish citizenship: institutions and sitting officials were he died shortly after the inauguration left in place. So, too, were the thousands in San Francisco, before the law was of unmarked mass graves of the Spaniards fully implemented. who had been summarily executed during the war and whose remains the Franco Today, all 2,800 members of the regime never bothered to exhume—a Lincoln Brigade are dead. Their stories task that citizen groups began to take live on, however, in Adam Hochschild’s on around the turn of the millennium, riveting new book, Spain in Our Hearts, without state support. which narrates the fates of a dozen English-speaking participants in the Things really started to change only conflict. Rigorously researched and in 2007, when civic groups successfully masterfully narrated, Hochschild’s book pressured the Socialist-led government will become the standard account of the to pass the Historical Memory Law. Spanish Civil War for the next genera­ The measure called for the elimination tion of Americans. Hochschild makes of many public traces of the Franco clear why the story that U.S. progressives regime: for example, streets named for continue to tell about the Spanish Civil Nationalist generals, plaques commem­ War—a tale of idealistic rebellion and orating the “martyrs” who fell “for God heroism followed by tragic defeat—is and Fatherland,” and statues of the former quite unlike the stories about the war dictator such as the one in Santander. that are told in Spain. It’s one thing to The law also stipulated that the Spanish recall a time when a deeply felt political commitment drove thousands of 156 f o r e ig n af fai r s

Spain’s Foreign Fighters The good fight? American prisoners of war released in Spain, 1938 G O O G L E C U LT U R AL I N ST I T U T E Americans to risk their lives in a foreign he writes in the prologue. “I remember war. It’s quite another to make sense asking one of them . . . how he looked of a violent political conflict that tore back on the war. Over the clatter of through a national community, divided manual typewriters and teletype machines families and friends, left hundreds of and the whoosh of pneumatic tubes that thousands dead or exiled, and led to four carried our stories to the typesetters, decades of repression. Different stories he said with great feeling, so unlike the are called for when victims, perpetrators, usual banter of the newsroom, ‘I wish and their descendants have to find a way we’d won.’” to continue to live together in a demo­ cratic country. Hochschild’s emotional attachment to the Lincoln veterans in his orbit was “I WISH WE’D WON” typical of his generation. In the 1960s and 1970s, older leftists and younger The author of a number of best-selling, activists didn’t see eye to eye on every­ prize-winning books, including histories thing, but the war in Spain was an of World War I (To End All Wars) and unquestioned touchstone. To this day, the colonization of the Congo (King it still stands as a fundamental chapter Leopold’s Ghost), Hochschild first became in the history of the American left. interested in the Spanish Civil War in the mid-1960s, when he was a young The Spanish Civil War began in reporter at the San Francisco Chronicle. the summer of 1936 after an attempted “Two older journalists at the paper were military coup failed to overthrow the veterans of the Abraham Lincoln Brigade,” recently elected government of the republic, led by the left-wing Popular September/October 2016 157

Sebastiaan Faber Front. The Nationalist military rebels, writer named Eric Blair, who joined a allied with the powerful Catholic Church Republican militia and was severely and the immensely wealthy landowning wounded in 1937—and later became class, saw the modernizing, secular Popular famous under the pen name George Front as a threat to their economic and Orwell. The other cast members are political interests and to the tradi­ less celebrated but no less fascinating. tional religious values that in their Robert Merriman was a tall, charismatic view embodied Spain’s greatness. Nazi son of a lumberjack who grew up to Germany and fascist Italy supported the become an economist at the University Nationalist cause. But rather than stand of California, Berkeley. A committed with a fellow democracy and come to the leftist, he traveled to Moscow in 1935 republic’s aid, the major Western powers, to conduct research on Soviet farming, including the United States, stayed out of but the outbreak of the Spanish Civil the conflict. Still, the war drew massive War interrupted his research. In 1937, attention—The New York Times ran more he arrived in Spain, where he became than 1,000 front-page headlines about commander of the Lincoln Battalion— it—and it sharply divided public opinion. which, along with other English-speaking Hundreds of thousands of Americans, battalions, made up the republic’s XV including many celebrities, supported International Brigade. Merriman died the republic in various ways. In many a year later, in enigmatic circumstances. cases, their involvement would leave Conflicting accounts exist, but it seems indelible marks on their lives and work. that his unit stumbled into enemy forces The writer Ernest Hemingway filed war during a chaotic retreat. Most likely, he dispatches, collaborated on a documentary was executed on the spot, but his body about the conflict, and wrote a best-selling was never recovered. Merriman served novel, For Whom the Bell Tolls, set in war­ as the inspiration for the hero of For time Spain. His partner, Martha Gellhorn, Whom the Bell Tolls, and Hochschild covered the war for Collier’s magazine and shares Hemingway’s admiration for the other outlets, launching her career as one economist whom history turned into an of the best-known female war correspon­ effective military commander. dents in the United States. And the African American poet and playwright Hochschild also tells the story of the Langston Hughes wrote about Spain for American journalist Louis Fischer, who the Baltimore Afro-American, focusing had reported from the Soviet Union in on black volunteers from the United the years following the Russian Revolu­ States who saw the fight against Franco tion and written sympathetically about as an extension of the struggle against the Bolsheviks. Fischer covered the war racist oppression at home. (In Spain, for in Spain for the left-wing magazine The the first time in U.S. military history, a Nation while also serving as an informal black officer, Oliver Law, commanded a adviser to the Republican leadership, unit that included white soldiers.) after a brief stint as a quartermaster in the XV International Brigade. (These Hochschild mostly eschews such shifting roles were not unusual; as the well-known figures, although one of his historian Paul Preston has shown, many main characters is a young British of the foreign correspondents in Spain 158 f o r e ig n af fai r s

Spain’s Foreign Fighters couldn’t help getting involved in one way workers’ organizations took over the or another.) Fischer was drawn to leftist economy and “Spaniards briefly wrote causes, Hochschild writes, not just by a new chapter in Europe’s centuries-old youthful idealism but also by “the hunger battle between classes.” for recognition and closeness to power of someone who had grown up with neither.” Hochschild also shares an explosive In the wake of Stalin’s purges, however, scoop that never made it into the main­ Fischer’s enchantment with communism stream media during the war: the story gave way to disillusionment; he later of how Torkild Rieber, the Norwegian- contributed an essay to The God That born chief executive of Texaco, who was Failed, a 1949 collection of testimonials fond of a number of fascist dictators, from former Communists that became helped Franco win the war. Rieber offered a classic of Cold War anticommunism. Franco some 380 tankers’ worth of fuel on credit, an arrangement that constituted The issue of Soviet involvement in a clear violation of U.S. neutrality laws. the Spanish Civil War remains almost But Rieber went ever further: by tapping as controversial today as it was in the his global network for detailed infor­ 1930s. Soviet support increased the mation on shipping routes and times, Communist Party’s influence within Rieber helped Franco and his Nazi the republic, and Soviet agents worked German allies sink oil tankers headed with the Republican authorities to for the republic. suppress dissidents, echoing the purges going on at the same time in Moscow. MORE QUESTIONS THAN ANSWERS Still, as Hochschild points out, Soviet power in Spain had clear limits and The international brigades served as has frequently been overstated. He also shock troops for the Republican forces at debunks the notion, prevalent among major battles, but many of the volunteers some conservative historians, that a were inexperienced soldiers, and their Republican victory would have turned equipment was less than adequate. As Spain into a Soviet satellite state—an Hochschild points out, the American illusion that bolstered Franco’s Cold War volunteers suffered the highest death image as the anticommunist “sentinel rate of any U.S. military force during of the West.” the twentieth century. Many of those who did survive went on to fight during A journalist at heart, Hochschild is World War II and to lead long, politically especially interested in how reporters active lives. By the late 1960s, many of covered the war, how they balanced them had achieved mythical status. “I saw their political commitments with their Lincoln Brigade veterans enthusiastically professional duties, and how editors and cheered when they appeared in demon­ newspaper owners shaped the coverage. strations for civil rights or against the He finds that many journalists were prone Vietnam War, or against U.S. interven­ to “herd behavior” and missed important tion in Central America in the 1980s,” stories, including the extent and signifi­ Hochschild writes. “All of us who care cance of the social revolution that took about social justice feel a need for politi­ place in Catalonia and elsewhere during cal ancestors,” he notes. In the Lincoln the first months of the war, when Brigade volunteers, the postwar September/October 2016 159

Sebastiaan Faber American left found just that. But it dominated among the Lincoln veterans also inherited their sometimes narrow, (most of whom were members of the highly partisan view of the conflict. (When Communist Party or socialist fellow one Lincoln commander, Milton Wolff, travelers), which stressed the legal legit­ returned to Spain in 2006, he visited a imacy of the republic, the cruelty of war cemetery near Gandesa. “These are Franco’s fascism, and the wisdom of the fascists?” he asked with disdain after accepting Soviet support. stumbling accidentally onto the tomb­ stones of pro-Franco soldiers. “There Hochschild navigates these nar­ratives aren’t enough of them!”) with skill and sensitivity. Although he does not hide his admiration for those, In the United States and the United such as Merriman, who gave their lives Kingdom, lasting disagreements over the for progressive ideals, he doesn’t shy war’s meaning and legacy stem from a away from the less admirable qualities number of factors. For one thing, the of the era’s leftist politics. Above all, conflict was incredibly complex: a wide Hochschild makes clear that the story range of outside powers intervened in of the Spanish Civil War offers more it, and both sides included mem­bers of questions than answers, especially when many different political movements: it comes to issues in international affairs anar­chists, socialists, and various forms of that remain pressing today, such as the communists all fought for the republic, wisdom of great powers intervening in while both fascists and Catholics backed faraway conflicts. the Nationalists. For another thing, nar­r­atives about the conflict were shaped THE PAST IS NEVER DEAD by the Cold War, when the United States entered into a formal alliance with Franco’s In Spain itself, of course, the debate over Spain. As a result, most accounts of the the civil war has its own unique contours. war have inevitably been colored by Franco justified the 1936 rebellion as a ideology. The conservative-religious “crusade” to save Spain from communism, account maintains that Franco had no republicanism, Marxism, Judaism, Free­ choice but to rebel in order to save Spain masonry, and other nefarious creeds. from communism. The center-right Following the defeat of Franco’s fascist version emphasizes the republic’s revo­ allies in World War II, Spain was initially lutionary nature and argues that the shunned by the international community. Republicans and their international But a treaty with the United States in supporters were hijacked by a global the early 1950s and admittance to the communist movement subject to Stalin’s un in 1955 helped normalize its inter­ devious designs. The anti-Stalinist left, national status. By the 1960s, as the meanwhile, blames the Communist- Spanish economy boomed and the dominated Republican authorities for Franco regime presented itself as a losing the war by ruthlessly squashing guarantor of order and peace, the anarchist-led efforts to collectivize dominant narrative of the war shifted; factories and estates and by persecuting many Spaniards came to accept the anyone who dissented from the party Francoist view that the chaos of the line. And finally, there’s the account that Republican years had given way to three years of collective madness. By the time 160 f o r e i g n af fai r s

Spain’s Foreign Fighters Franco died, the widespread fear of a The uneasiness with the democratic new civil conflict helped cement broad transition’s reliance on amnesty that was support for the brokered solution between first expressed by the historical-memory the regime and the opposition, in which movement has evolved into more wide­ both sides made significant concessions. spread discontent with the functioning of the post-Franco political system. In For many years, Spain’s democratic the spring of 2011, thousands of Spaniards transition was considered a model of took to the streets, rallying around the moderation and common sense and served slogan “¡Democracia real ya!” (Real democ­ as a significant source of national pride. racy now!); that movement has coalesced By the late 1990s, however, a growing around the anti-austerity party Podemos number of Spaniards began wondering (We Can), which draws inspiration why no one had ever been held account­ from the republic and favors ending able for the thousands of human rights amnesty. Even some conservatives have abuses committed during and after the begun to acknowledge that revisiting war. In the subsequent decade, a series the past is not tantamount to opening of culture wars broke out over issues old wounds. In 2015, Madrid elected a such as abortion, gay marriage, the Iraq progressive-leaning city government war, and the unity of the Spanish state. headed by a retired judge and former In a suddenly more polarized political Communist activist, Manuela Carmena, environment, consensus about the recent who has pledged to implement the past—or at least an unwillingness to 2007 Historical Memory Law, which argue about it—began to slip away. The her predecessors had ignored. left lost its shyness about linking the conservative pp (which ruled from 1996 To be sure, dozens of Madrid streets until 2004) with the Franco legacy, and today are still named for Franco and right-wingers accused the Socialist his generals. But last November, the government that held office from 2004 Spanish capital chose a location for a until 2011 of repeating the confronta­ square dedicated to the foreign volun­ tional politics of the republic. Meanwhile, teers who fought against them; the site an expanding network of citizen organi­ will be called la Plaza de las Brigadas zations, denouncing Spain’s “pact of Internacionales.∂ silence,” began exhuming the bodies of the Nationalists’ victims from unmarked mass graves. Pressure from such groups led to the 2007 Historical Memory Law and, a year later, to an (ultimately unsuccessful) attempt by a high-profile Spanish judge to open a criminal investigation into more than 100,000 murders and forced disappearances perpetrated from the mid-1930s until the 1950s. Today, Spain’s political landscape is undergoing its biggest changes in 35 years. September/October 2016 161

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Return to Table of Contents Worth the Trip? new ideas, stronger personalities, and a better sense of who they were,” after Debating the Value of “transformative adventures that allowed Study Abroad them to see their own country . . . more clearly” and having observed things Don’t Believe the Hype abroad “that the United States might be able to learn from.” Alas, having taught in Eric R. Terzuolo two study-abroad programs in Europe between 2007 and 2010, I could provide In “The Study-Abroad Solution” anecdotes that would paint a very dif­ (March/April 2016), Sanford Ungar ferent picture of study abroad’s outcomes. argues that a lack of overseas edu­cation among American college and But it’s not necessary to rely solely uni­v­ ersity students “hinders the creation on competing impressions. In recent and implementation of a rational, con­ years, researchers—including some sistent, and nuanced foreign policy that affiliated with the Forum on Education reflects American values.” Ungar contends Abroad, which is recognized by the that only a major commitment of govern­ U.S. government as a standard-setting ment and private-sector resources to “a body, and some at ies Abroad, a major dramatic long-term expansion” of study study-abroad provider—have applied abroad will allow the United States to sophisticated research tools to analyze begin building “a more healthy relation­ the effect of overseas education. Their ship with the rest of the planet.” findings paint a complex and contradic­ tory picture. Participants in study abroad Ungar’s belief in the value of know­ do not necessarily come back changed ing and understanding others better is in the expected or desired ways, and the undeniably sincere, and in 20-plus years changes that do occur are mostly incre­ as a U.S. diplomat, I learned that inter­ mental. It does not appear that study national understanding is always in abroad’s benefits reliably accrue to all short supply. But the specific benefits participants, nor are they equally dis­ of study abroad that Ungar mentions— tributed. My own research on study higher four-year graduation rates for abroad’s impact suggests that, on average, study-abroad participants and increased participants shift toward a more inter­ earning potential—do not seem terribly cultural (as opposed to monocultural) relevant to improving U.S. foreign policy. worldview compared with students who What is more, Ungar treats study abroad remain on their home campuses in the as unquestionably beneficial for all and, United States. However, the effect is like many of its advocates, argues ane­ c­ relatively minor. Perhaps more signifi­ dot­ally, referring to the stories of students cant, I have found that three student who returned from study abroad “with characteristics are closely linked to the development of a more intercultural outlook while studying abroad: being female, identifying as a member of more than one national culture, and having a grandparent who was born and 162 f o r e i g n af fai r s

Worth the Trip? raised outside the United States. On the massive, state-engineered subsidies for other hand, according to my research, study abroad would mostly benefit the the characteristics of the study-abroad private good, and Ungar presents no programs in which students participate clear evidence for his assertion that do not seem to influence the outcomes. expanding study abroad would contrib­ In other words, it appears that changes ute to the public good by somehow in the ways that study-abroad partici­ leading to better U.S. foreign policies. pants understand and address cultural Ungar presents an appealing picture differences are more a function of their of young Americans going abroad as preexisting personal characteristics than cultural ambassadors, showing a sensi­ of their experiences abroad. tive understanding of what others see as wrong in U.S. society and policies, These findings pose a challenge for and returning energized to change the efforts to make study abroad reliably United States for the better. But he beneficial for all participants and call into seems to be looking at study abroad question whether it should be mandated through rose-colored glasses. The for all undergraduates, even if it were United States’ objective weight on the possible to do so. Given the expense of international stage inevitably generates study abroad for participants and their criticism and antagonism, even apart families, it is worth exploring more from anger at specific U.S. policies. In cost-effective approaches to fostering my experience, when American students students’ intercultural skills, methods abroad interact with their foreign counter­ that would be more readily accessible parts, they spend much of the time to students outside the group of elite distinguishing their views from those and aspiring elite institutions that con­ of the U.S. government and from those tribute a disproportionate share of U.S. of other Americans. Perhaps some come study-abroad participants. A recent, back with a positive drive to change U.S. large-scale study by education researchers policies, in one direction or another. But at Augustana College and the University many others come back weary of such of Iowa suggests that on-campus expe­ conversations, saying, “I’m glad that’s riences with diversity may be the single over with.” most important factor in determining whether students increase their inter­ I favor more modest objectives for cultural competence during their under­ study abroad. It would be a major graduate years. It would be relatively achievement if study-abroad programs inexpensive to maximize such experiences, could reliably provide participating drawing on resources already present at students with enriching experiences colleges and universities and in their that demonstrably improved their surrounding communities. intercultural skills. Such programs are not there yet, by any means. It’s true that employers like to see study-abroad experiences on students’ ERIC R. TERZUOLO was a U.S. Foreign Service resumés, and colleges and universities would no doubt welcome additional Officer from 1982 to 2003. public and private subsidies to bolster their students’ career prospects. But September/October 2016 163

Ungar and His Critic Ungar Replies students who spent an intense semester in Brazil, China, Rwanda, or South Eric Terzuolo provides an inter­ Africa. He also misses a broader point: esting perspective on his and if Americans are to understand and others’ research into the effect cope more satisfactorily with events of overseas education and on his own around the globe, they will have to see disappointing experience teaching in with their own eyes and absorb with study-abroad programs in Europe. It their own minds the challenges their is true, of course, that “participants in country faces. Several generations have study abroad do not necessarily come already experienced the dangers of back changed in the expected or desired allowing foreign policy to be designed ways,” as he writes, just as not all college only by experts and carried out primarily or university students, enrolled in every by official representatives, many of whom manner of institution, get as much out have had limited exposure to the rest of their overall education as they might of the world.∂ hope. But unlike Terzuolo, I’ve never met a student who was glad the experience was over. I don’t argue that study abroad should be mandated for all undergradu­ ates everywhere, even though we found that doing so at Goucher College, where I served as president, had a profound and demonstrably positive effect. What I propose is that within a decade, at least a third of all American undergraduates should have access to an affordable study- abroad program, with a goal of univer­ sal access (but not necessarily required participation) by midcentury. And surely, any increase would be an improvement over the current, frankly pathetic study- abroad participation rate of 1.5 percent of U.S. college and university students. Terzuolo’s direct personal experience is apparently limited to study-abroad programs in Europe, some of which may well be in need of improvement, including greater academic rigor and less clustering of students from a single institution. He might feel differently if he were to visit some of the Goucher programs I did in Cuba, Honduras, and India, or if he were to talk with 164 f o r e i g n af fai r s

Return to Table of Contents Recent Books for geopolitical purposes often backfire. And crucially, U.S. support for a rules- Political and Legal based system is itself a profoundly geoeconomic strategy that has paid dividends for decades. G. John Ikenberry Shaper Nations: Strategies for a Changing World War by Other Means: Geoeconomics and Statecraft EDITED BY WILLIAM I. BY ROBERT D. BLACKWILL AND HITCHCOCK, MELVYN P. LEF FLER, JENNIF ER M. HARRIS. Harvard AND JEF F REY W. LEGRO. Harvard University Press, 2016, 384 pp. University Press, 2016, 224 pp. Geoeconomics, the use of economic Accommodating Rising Powers: Past, instruments to advance foreign Present, and Future policy goals, has long been a EDITED BY T. V. PAUL. Cambridge staple of great-power politics. In this University Press, 2016, 335 pp. impressive policy manifesto, Blackwill and Harris argue that in recent decades, Two recent books offer insights into the United States has tended to neglect how the world might change in the this form of statecraft, while China, coming decades as U.S. hegemony fades Russia, and other illiberal states have and the world becomes increasingly increasingly employed it to Washington’s defined by multipolarity. Shaper Nations disadvantage. China looms especially represents one of the best snapshots yet large in the book, which details Beijing’s of this emerging era, focusing on count­ries reliance on economic carrots and sticks whose economic and military capa­ bilities to bring smaller and weaker countries make them increasingly signifi­cant in into its political orbit—for example, their regions and beyond: Brazil, China, launching a new development organi­ Germany, India, Israel, Russia, Turkey, zation to rival the World Bank and and the United States. None of the laying the groundwork for a new Silk contributors considers any of these states, Road across Eurasia. Blackwill and including China, to be a “revisionist” Harris worry that economic statecraft power, one that seeks to upend the rules has become a “lost art” in post–Cold and institutions of the existing order. War U.S. foreign policy and that the Rather, shaper nations are themselves American penchant for separating shaped and constrained by domestic economics from politics and Washington’s politics, regional rivalries, and historical commitment to a rules-based inter­ memories and grievances—a fact that national order have constrained U.S. will make world politics increasingly policymakers. But as the authors ac­ messy and dysfunctional as such countries knowledge, Chinese and Russian become more influential. Paradoxically, attempts to use trade and investment today’s rising states combine greater international influence with profound September/October 2016 165

Recent Books domestic weaknesses and unsettled The Fix: How Nations Survive and national identities. Legro speculates Thrive in a World in Decline that shaper nations will create a global BY JONATHAN TEPPERMAN. Tim order that is less global and less order­ly: Duggan, 2016, 320 pp. as rising powers focus on their own development and neighborhoods, they It is easy to look at the world today will deliver fewer public goods. and see nothing but a spiral of disorder, dysfunction, and decline. In this wonder­ A multipolar world might also fully engaging book, Tepperman—the prove to be a dangerous place: many of managing editor of this magazine—tours history’s bloodiest wars have been con­ the world looking for political success flicts between ambitious rising powers stories that cut against this gloomy seeking greater sway in the world and outl­ook. The book identifies ten com­ declining leading states struggling to mon but particularly difficult problems, hold on. In his impressive collection, including inequality, immig­ ration, civil Paul leads an interdisciplinary group of war, corruption, and political gridlock, scholars in exploring how rising powers and argues that they are “fixable” when and more established rivals have dealt leaders act boldly. For each problem, with this dilemma in the past. The best Tepperman finds a free-thinking and example of peaceful accommodation is experimental leader (or leaders) who the United Kingdom’s acceptance of a defied the odds and achieved success. rising United States in the late nine­ In the early years of this century, for teenth century. In contrast, Europe’s example, President Luiz Inácio Lula da inability to integrate post-Bismarck Silva of Brazil developed a ground­ Germany in the early twentieth century breaking poverty-fighting program, stands out as the most disastrous case Bolsa Família, that gave small monthly of failed accommodation. The book also grants to mothers to feed and educate surveys the contemporary efforts of Brazil, their families. And for the past two China, and India to find their way in decades, the democratic leaders of the U.S.-led global order. Interestingly, post-Suharto Indonesia have steered that order has made it easier for rising their country toward a moderate form states to join and assume leadership of politics that has undercut Islamist roles, but prevailing norms of sovereignty, radicalism. From his fascinating trave­ territorial rights, and the rule of law logue, Tepperman offers lessons for a have made it harder for the great powers world in trouble: leaders need to think to cut deals with smaller rivals over outside the box, embrace the possibil­ spheres of influence. The book makes ities that crises present, and respect clear that long-term shifts in power systems of checks and balances. The among states do foment insecurity pragmatic reform tradition that the and conflict, but diplomacy and steady book illuminates is apparently still alive. strategies of reciprocity and self-restraint can bring countries back from the brink of war. 166 f o r e i g n af fai r s

Recent Books The Four Freedoms: Franklin D. Roosevelt Economic, Social, and and the Evolution of an American Idea Environmental EDITED BY JEFFREY A. ENGEL. Richard N. Cooper Oxford University Press, 2015, 248 pp. The Power of a Single Number: A Political History of GDP U.S. President Franklin Roosevelt’s BY PHILIPP LEPENIES. Columbia “Four Freedoms” speech, delivered in University Press, 2016, 208 pp. January 1941, is widely seen as a land­ mark statement of American foreign The Great Invention: The Story of GDP policy. Roosevelt’s purpose was to rally and the Making (and Unmaking) of the a skeptical U.S. Congress and public Modern World to the coming war against the Axis BY EHSAN MASOOD. Pegasus Books, powers and their “new order of tyranny” 2016, 352 pp. by offering a lofty vision of a liberal order that would protect American In recent decades, the acronym interests and ideals. This thoughtful “gdp”—short for “gross domestic book of essays attempts to recover the product”—has entered popular and historical moment—what the historian political discourse as a measurement Arthur Schlesinger, Jr., called “those of economic activity; gdp per capita, angry days”—surrounding Roosevelt’s meanwhile, has emerged as a rough speech and assess its long-term legacies. measure of overall well-being. In his Chapters look at each of the four great informative book, Lepenies describes rights and protections: freedom of the tortuous path by which gdp became speech and religion and freedom from so crucial, beginning with the conceptual fear and want. One theme of the book work on economic measurement carried is that very prosaic circumstances out by the English economist William and instrumental purposes lay behind Petty in the mid-seventeenth century, Roosevelt’s soaring rhetoric: he was to the consolidation of gdp’s role in under pressure to convince a reluctant assessing and managing the British and Congress to approve military spending U.S. economies during World War II, and aid for countries aligned against to Washington’s postwar insistence that Nazi Germany and its allies. But another European recipients of Marshall Plan aid theme is that ideas have consequences. adopt gdp as a metric and collect the Whatever his immediate goals, Roosevelt data needed to calculate it. ushered in an expansive new conception of international order. As the historian The subsequent Western embrace of Elizabeth Borgwardt has put it elsewhere, gdp ultimately led countries around Roosevelt was offering “a New Deal for the world to adopt it as a benchmark the world.” measurement. In recent decades, Masood argues in his interesting book, that September/October 2016 167

Recent Books process has gone too far. Masood decries occur from time to time owing to what the increasing use of gdp for purposes King calls the “radical uncertainty” of it was never intended for, such as esti­ modern, dynamic economies. In addition mating overall economic performance to serving up fascinating tidbits of and strength. Such concerns are not banking history, King proposes a radical new, as Masood shows by recounting transformation of the contemporary the vigorous debates among economists banking system. Under his plan, central in the 1930s who disagreed over gdp’s banks would agree to make loans to utility. In the view of Masood and cover a bank’s short-term liabilities others, gdp’s main flaw is its exclusion during a time of crisis as long as the of most nonmarket activities and its bank had offered acceptable collateral ina­ bility to factor in some negative ahead of time. This would greatly consequences of growth, such as air bolster the safety of banks but would pollution and climate change. But also require a major revision of how Masood doesn’t merely criticize the they function. overreliance on gdp: he also explores ongoing efforts to develop a satisfac­ Prisoners of Reason: Game Theory and tory substitute or supplement that Neoliberal Political Economy would yield a more accurate picture of BY S. M. AMADAE. Cambridge economic activity and its effects. University Press, 2016, 360 pp. The End of Alchemy: Money, Banking, and Amadae argues that neoliberal thought the Future of the Global Economy derives in great part from elements of BY MERVYN KING. Norton, 2016, game theory, particularly the so-called 448 pp. prisoner’s dilemma, which emphasizes how final payoffs affect the strategies King, who served as the United Kingdom’s of potential adversaries. American and top central bank official from 2003 until Soviet strategists used game theory to 2013, reflects on what the financial crisis develop their countries’ nuclear postures of 2008 and its aftermath revealed about during the Cold War. Since then, the modern economies. It is not a pretty rise of pro-market, pro-globalization picture. He concludes that the existing neoliberalism—which favors decision- business model followed by banks is no making based on rational choice and longer viable; soon enough, it will once narrow self-interest—has encouraged again present political leaders with the the spread of game theory into many dilemma of having to choose between other aspects of life and society, partic­ massive bank bailouts and economic ularly the realms of business and finance. catastrophe. There are two fundamental The author draws an unfavorable contrast problems: banks are still overleveraged, between neoliberalism and classical and they suffer from a mismatch between liberal thought, which emphasizes respect the liquidity and maturity of their assets for individuals and procedural fairness, and those of their liabilities during counsels decision-makers to do no harm, times of stress—which will inevitably and considers outcomes other than final 168 f o r e i g n af fai r s