Foreign affairs 2016 07-08

/ • •• THE TRUTH ABOUT TRADE AND JOBS JULY/AUGUST 2016 The Struggle for Israel F O R E I G NAF FAI R S .C O M



Volume 95, Number 4 THE STRUGGLE FOR ISRAEL 2 Ministering Justice A Conversation With Ayelet Shaked Anger and Hope 10 A Conversation With Tzipi Livni The End of the Old Israel 16 How Netanyahu Has Transformed the Nation Aluf Benn Israel Among the Nations 28 How to Make the Most o Uncertain Times Robert M. Danin Israel’s Second-Class Citizens 37 Arabs in Israel and the Struggle for Equal Rights As’ad Ghanem Israel’s Evolving Military 43 COVE R: STAVROS PAVLI D ES The IDF Adapts to New Threats Amos Harel Israel and the Post-American Middle East 51 Why the Status Quo Is Sustainable Martin Kramer July/August 2016

STUDY WITH PURPOSE “In a world where problems of growth, poverty, governance, inequality, and vulnerability persist as central questions of global a airs, the demand for advanced study in international relations has never been higher. Johns Hopkins SAIS graduates play key roles solving critical global problems.” — DEBORAH BRÄUTIGAM, PhD Director of the International Development program and the China-Africa Research Initiative LEARN HOW YOU CAN ADVANCE YOUR CAREER WITH GRADUATE DEGREES AND CERTIFICATE PROGRAMS IN INTERNATIONAL RELATIONS, ECONOMICS, AND MORE sais-jhu.edu/purpose • •EUROPE WASHINGTON CHINA

ESSAYS 58 70 American Political Decay or Renewal? 84 96 The Meaning o the 2016 Election 106 Francis Fukuyama 114 127 The Case for O shore Balancing A Superior U.S. Grand Strategy John J. Mearsheimer and Stephen M. Walt The Truth About Trade What Critics Get Wrong About the Global Economy Douglas A. Irwin NATO’s Next Act How to Handle Russia and Other Threats Philip M. Breedlove Germany’s New Global Role Berlin Steps Up Frank-Walter Steinmeier The Future of U.S.-Saudi Relations The Kingdom and the Power F. Gregory Gause III The Truth About American Unemployment How to Grow the Country’s Labor Force Jason Furman ON FOREIGNAFFAIRS.COM Stathis Kalyvas on Eric Li on watching Marina Ottaway on Greece’s next bailout American democracy in the Sykes-Picot Agree- battle. China. ment at 100. July/August 2016

SHED SOME LIGHT ON FUTURE GROWTH PHOTO BY: RAY LARSON MASTER OF DEVELOPMENT PRACTICE DEVELOP YOUR CAREER. DEVELOP THE WORLD. Learn More regis.edu/development LOOK OUTWARD. INQUIRE WITHIN.

Human Work in the Robotic Future 139 151 Policy for the Age o Automation 161 Andrew McAfee and Erik Brynjolfsson 172 Democracy in Decline 180 187 How Washington Can Reverse the Tide Larry Diamond The Innovative Finance Revolution Private Capital for the Public Good Georgia Levenson Keohane and Saadia Madsbjerg REVIEWS & RESPONSES Capitalism in Crisis What Went Wrong and What Comes Next Mark Blyth The Many Africas Beyond Continental Caricatures Ian H. Solomon Having It All A History o Global Consumption Victoria de Grazia “Foreign A airs . . . will tolerate wide di erences of opinion. Its articles will not represent any consensus of beliefs. What is demanded of them is that they shall be competent and well informed, representing honest opinions seriously held and convincingly expressed. . . . It does not accept responsibility for the views in any articles, signed or unsigned, which appear in its pages. What it does accept is the responsibility for giving them a chance to appear.” Archibald Cary Coolidge, Founding Editor Volume 1, Number 1 • September 1922 July/August 2016

July/August 2016 · Volume 95, Number 4 Published by the Council on Foreign Relations Editor, Peter G. Peterson Chair Managing Editor ,, Deputy Managing Editors ,’ Deputy Web Editors Sta Editor , - Assistant Editors Copy Chie Production Manager Contributing Artist Business Administrator Editorial Assistant Book Reviewers , , . ,. , , . , , , ., Publisher Marketing Director Senior Product Manager Business Operations Manager Marketing Manager Advertising Director Senior Manager, Advertising Accounts and Operations Senior Manager, Events and Business Development Events and Marketing Associate Special Assistant to the Publisher Director, Web Management and Development Website and Mobile Operations Circulation Services ,, Media Relations Board of Advisers ., . , ,. , Chair . ,, , ., , ,. ., , . , , . ,. ., ., : Foreign A airs ForeignA airs.com/services 58 E. 68th Street, New York, NY 10065 : : Call Edward Walsh at 212-434-9527 or visit 800-829-5539 U.S./Canada www.foreigna airs.com/advertising 813-910-3608 All other countries : ForeignA airs.com : service@ForeignA airs.customersvc.com : ForeignA airs.com/newsletters : P.O. Box 60001, Tampa, FL, 33662-0001 : ForeignA airs.com/video : Facebook.com/ForeignA airs : The contents o Foreign A airs are copyrighted. No part o the magazine may be reproduced, hosted or distributed in any form or by any means without prior written permission from Foreign A airs. To obtain permission, visit ForeignA airs.com/about-us Foreign A airs is a member o the Alliance for Audited Media and the Association o Magazine Media. GST Number 127686483RT Canada Post Customer #4015177 Publication #40035310