The Future of U.S. National Security
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This event took place on Friday, October 5, 2018
NIKOLAS GVOSDEV: Good morning, everyone. Welcome to the Carnegie Council for Ethics in International Affairs. I'm Nickolas Gvosdev. I'm wearing my Senior Fellow hat for this event being here at the Council, but I also teach at the Naval War College, and it's my pleasure to welcome my friend and colleague Derek Reveron, also of the Naval War College and chair of the National Security Affairs Department, to join us in this conversation about the future of U.S. national security.
For those of you who were here or were able to watch two weeks ago our roundtable with Asha Castleberry and Ali Wyne, they were speaking on this theme of making foreign policy relevant again. That is, how do we connect the broad set of foreign policy and national security issues with the doorstep issues of voters, the pocketbook issues of voters. It was about connecting foreign policy to the citizenry. That assumes, though, that we understand what foreign policy is and what the requirements of national security are likely to be.
One of the things that we are having in this conversation is that many, particularly in Washington, are still operating from a late 20th-century view of what national security is and are not adapting to the ways that the international order is evolving, both because of the designs of governments and corporations but also due to factors such as technological change, climate change, and other such factors which are changing the very basis of what we consider to be national security.
To connect the conversation we had about making foreign policy relevant to this issue, we've invited Derek to join us to talk about what's the future for U.S. national security. What are going to be some of the drivers and the issues, and how may what we think of as national security coming out of the Cold War change as we move into the mid-21st century and what those issues will be?
Derek and I had the opportunity to co-edit and contribute to The Oxford Handbook of U.S. National Security, which was just published earlier this year, where we were able to assemble a top-flight collection of both practitioners and scholars to debate a number of these issues. So we're able to have this conversation with you not only reflecting what we have been thinking about it but in some ways channeling the 40-some contributors to this volume as to how they see national security evolving as we move forward.
Certainly for Derek's sake as well as reminding everyone who is watching and is here, even though I said I'm wearing my Carnegie hat, but since I still have my affiliation with the Naval War College as well, I stress that in the course of this conversation neither of us will be speaking in any official capacity, and all of the opinions that we will provide to you in the context of this conversation will be our own personal opinion and do not reflect any official position necessarily of the Navy, the Department of Defense, or of the U.S. government as a whole.
As I mentioned, Derek is of course the chair of the National Security Affairs Department at the Naval War College. He has been a longtime scholar, particularly one of the innovators in the field of human security, so looking at national security through the lens of human security, but he's also a practitioner in that he is an officer in the Naval Reserves and therefore has toggled back between observing national security and then executing national security in the field, most notably several years ago in a deployment to Afghanistan. So he is able to bring both sides of that experience to this discussion.
With that, Derek, let me turn the floor over to you for opening remarks and comments, and then we'll have our conversation.
DEREK REVERON: Thank you, Nick, and thanks to the Council.
As Nick said, I'm expressing my own personal views. We've worked together I think probably at least 10 years. We've co-written a book together, we've co-edited a big book together, we've written probably half a dozen articles together. The one thing that I've learned about Nick is that he has a much better memory than I do, so if I'm looking at my phone, I'm not tweeting, but I did jot down some notes because I know I can't match Nick's memory and preparation.
Maybe one first thought before we start is to say something about the Naval War College because it might sound foreign to everybody. I've come to think of it a little differently. It's more than Navy, it's more than war, and it's more than a college.
It's more than Navy in the sense that the Navy pays for the Naval War College, but we have officers from all military services—Army, Marine Corps, Air Force, Coast Guard, and Navy—and about 60 countries also send officers. One of the remarkable things to me is that at any one time about 20 percent of the world's chiefs of navy are U.S. Naval War College graduates. This becomes I think an important theme from what Nick and I have been working on, the role the United States plays in the international system. One of that is educating the world's leaders, so we look at it and work on it directly with military leaders, but if you thought about the Fulbright program on civilian leaders, similar sort of efforts.
Much more than war. We were founded in 1884, when "war" is what you described and how you thought about national security because very little is written in the Constitution about national security. I often joke with my students. We go down to the National Archives in DC. You can see the Constitution, you can see the Declaration. There is no display which lists the national interests of the United States. If you look in the Constitution, what we think very much what national security is, the context, institutions, and processes to "ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty." So as I think about why did we get the Department of Homeland Security, to "ensure domestic tranquility," "provide for the common defense," we have a standing military where 240 years ago that was viewed as an anathema to freedom.
If you look again at the Constitution—I apologize to my Army friends and colleagues, but the Constitution is very specific. It says, "Congress shall raise armies but maintain a navy," so the idea that the Navy would always be standing because of international commerce and the role navies play in ensuring that we can drink coffee freely from around the world, bring in clothing and cars, and that's important. At the Naval War College, that's the "more than war" part. We very much spend our time thinking about how do governments, how do militaries act during non-major wartime.
To Nick's earlier point, I think in the past we conceptualized war simply as one country invading another country, and that's still true. In all fairness I take many criticisms that I have a broader conception of war, but as I think about back to our Constitution in terms of "ensure domestic tranquility," that applies equally around the world. While one country invading another country is pretty rare, and we can see it—United States-Iraq-Afghanistan-Syria, Russia-Ukraine, Israel-Lebanon occasionally, Saudi Arabia-Yemen. That's pretty rare, but there are about 50 active internal conflicts or civil wars in the world.
That's what intrigued me during my military career. It has been only about that, thankfully, and we can debate on whether we've returned to great-power competition or not, but at least I can say that today there are U.S. military personnel in dozens of countries around the world at the invitation of these other governments who are attempting to solve what I call "security deficits," when a government can't manage either the internal threats due to terrorism, organized crime, or disease, or external threats. When North Korea threatens Japan, for example, the United States and Japan are treaty allies, and how the United States supports the Japanese. That's my "more than war" part in terms of what we do.
Then, "more than a college." Yes, we have students; yes, we have great professors like Nick. But we also support the wider U.S. government in terms of strategic thinking. We support the wider U.S. government in terms of doing tabletop exercises, walking through the if/then challenges that national security leaders face, and then we also provide ready support to the U.S. Navy and also foreign navies, whether that is helping them develop maritime strategy, helping them understand what types of ships they might buy, how they might cooperate together, because one of the remarkable things to me going back to my broad view is there are only about 10 countries in the world that the United States does not have some sort of security relationship with, and this becomes important when we start thinking about the future.
I understand the concerns about the rise of China or the return of China, and my colleague Graham Allison has written a fantastic book, Destined for War: Can America and China Escape Thucydides's Trap?. [Editor's note: For more from Allison, check out his 2017 Carnegie Council talk on this book.] Nick and a couple of other colleagues work on Russia, and certainly Russia has been extremely aggressive, assertive, and invasive without a doubt. But what Russia and China lack are allies and partners. Even during the Trump administration which came into office skeptical of allies, the North Atlantic Treaty Organization (NATO) expanded from 28 to 29 last year and the U.S. government, the Trump administration, is supporting expansion again up to 30.
At least by treaty the United States has at least 36 treaty allies. Then there are dozens of other countries where we don't have a treaty alliance where the United States would defend. Israel is the most prominent example because the United States and Israel have an important linkage not enshrined in treaty. That's one of the unique things as you think about the future is will these things continue.
Let me switch over to notes unless you want to jump in and direct me.
This is something intriguing both for Nick and me, this idea of even talking about national security, because prior to World War II it was done largely in the United States on an ad hoc basis. The United States is very blessed in terms of natural resources. Today we're the largest natural gas producer in the world. We'll be the largest oil producer in the next year or two. Great natural resources.
Population. The United States has the third largest population in the world. Size and geography, third largest in the world. We've got great peaceful neighbors, Canada in the north and Mexico in the south. Canada is the only binational military command the United States has where you have U.S. and Canadian officers interchangeable in terms of command structure around air defense because Russian bombers still routinely fly down across the Bering Sea, Alaska, Canada, to the West Coast, and the United States and Canada are extremely close at the military level. Mexico, deep cooperation on the military space as well.
But after World War II I think it was a reflection on how ad hoc World War II was done. If you think of your history, this is the 100th anniversary of World War I. World War I starts in 1914. The United States doesn't get involved until three years later, in 1917, and then the war ends. The United States was reluctant to get into World War I. The same with World War II. It starts in 1939-ish. The United States doesn't get involved militarily until 1942, so again about three years late.
There was a sense after World War II that we needed to be more engaged in the world. Out of the ashes of World War II—no fighting was done in North America. Yes, there were German submarines and German infiltrators I'm sure coming into New York. I know some German submarines were sunk off where we live in Rhode Island. But largely the United States was free from the bombing that happened in Europe, free from the bombing that happened in Northeast Asia, and really emerged with a strong economic country. It shared and prospered with where we are today I think.
The other thing to help explain—I don't think I'll talk about current events because it's too hard, it's too current. I don't think we can say much about what's going to happen today or tomorrow. But probably a year from now, I think we're better at doing that because there is a lot of continuity in U.S. foreign policy in certain things. I understand the noise associated with these continuities, but one continuity is that generally the United States plays an important role in the world, and that has been true whether you're a Democrat or a Republican, whether we're in recession or a boom. The United States has always positioned itself to play an important role in the world. I think that has something to do with U.S. political culture, forward looking, the connections because we are a country of immigrants, but it also has something to do with something that we look at deeply, the role other governments place on the United States. Other governments look to the United States to help solve problems.
When I first started thinking about this it was built around the civil wars in Bosnia and Kosovo, and it was that the Europeans attempted to solve the Balkan crises and could not, and then eventually the United States again came in, and Richard Holbrooke, one of the stalwart diplomats of the United States, was able to bring the Europeans and Balkan leaders together in Dayton, Ohio, of all places, to be able to get a peace treaty. There is still tension in Bosnia, but there's no more fighting, there's no more genocide. I can go glass half-empty or half-full when we get into Q&A, but it's a holiday weekend, so we should probably be positive.
Another important principal characteristic whether you're a Democrat or a Republican is preventing catastrophic attacks on the United States, and we do that by pushing our security perimeter to the Middle East, to Europe, and to Asia. That's where you do see a large forward presence. The largest foreign presence of the U.S. military is in Japan, the second is Germany, third is Korea, fourth is Italy. It's not Syria, it's not Iraq, it's not Afghanistan, although there are significant presences there. This forward presence idea, working with partners to make the United States more secure by working with others, is critical.
A global system marked by open lines of communication and trade. Again, I appreciate the administration's efforts to renegotiate trade deals, some of which are decades old, and I can't debate the details of those, but the notion at least that it wasn't a withdrawal from the international trading system, it was a renegotiation. Any time there is change, that makes people uncomfortable because the rules change, and the rules are changing, so we have to acknowledge that. But it wasn't a withdrawal, it wasn't the isolationism that we saw in previous periods of U.S. history.
You might ask—I think it's a fair question, I asked myself this on the train ride: Is it still fair to say there are continuities in foreign policy two years into the Trump administration? I'm going to say yes, and I'll offer some evidence. First, as I already said, yes, NATO partners have taken a beating on spending more on defense, but NATO partners have been taking a beating on spending more on defense for decades. It's just not new. The United States has been criticizing our European and Canadian allies to spend more on defense. That's not new. And we've supported NATO expansion once last year and it looks like again, depending on how the vote in Macedonia is interpreted, which is interesting, in spite of Russian objections.
Second, the United States is at war. We're going to enter the 17th year of war in Afghanistan, and we have 14,000 uniformed people in Afghanistan, probably 40,000 U.S. contractors, U.S. citizens who are there. Seventeen years, beginning with President Bush, accelerating through President Obama because President Obama brought us up to about 100,000 troops. I got to go in 2010 and 2011 for a year. I was a part of the Afghan "surge." The numbers fell a bit, and President Trump brought us back up to about 14,000. Again, across administrations, across time, a lot of continuity.
The fight against the Islamic State of Iraq and Syria (ISIS), that certainly begins at the end of the Obama years. In fact, the coordinator for the counter-ISIS campaign for the United States, Brett McGurk, an Obama appointee, continued two years into the Trump administration, and the fight against ISIS continues.
Counterterrorism strikes. The United States regularly conducts counterterrorism strikes beginning in the Bush years. It accelerates during the Obama years and then continues today in Somalia, Yemen, and Pakistan, just to name a few.
This emphasis on China that you see. I would point back to Secretary of State Hillary Clinton, who wrote an important piece in Foreign Affairs in 2014-ish, so this effort to think more about the rise of China, Northeast Asia, starts during the Obama years and I would say continues and accelerates.
My colleague Graham Allison, I'll attribute. He says the mistake people tend to make, to include professors, when thinking about the president, is we take him literally but not seriously, and what Graham often advises us is to take him seriously but not literally. I'll let you decide how you approach that, but I thought that was good advice, and then look at how things have changed or not.
Maybe the last thing I'll say and then we can open it up a bit is that there is no predetermined blueprint for how the U.S. government operates for national security. As I said, if you look in the Constitution it's open and vague.
The U.S. government has been expanding. We overcame or moved away from U.S. history where we did have the tradition of the military, this boom-and-bust cycle, a small standing military, then World War I starts, grow it tremendously, the war ends, demobilize; World War II starts, grow it, the war ends, demobilize. We ended up with a large standing military. We're about half the size that we were in 1993. When President Clinton came in I think it was 2.1 million or so active-duty, today it's about 1.2 million.
That decline has led also to reinforce the partnership that when the United States does go to war, so in Afghanistan, today I think there are about 40 other countries with us. When I was there we had 50, to include Bosnia, which was always the one that made me feel this is possible because when my military career started Bosnia was in civil war and genocide occurred, and now they are a partner for the United States trying to bring similar stability in Afghanistan.
But there is no predetermined blueprint for any of this. It is subject to U.S. politics. It is subject to U.S. bureaucracy. Nick and some colleagues wrote a great article about the role subgovernments play. There are about 3 million or so people who work for the federal government. Most are in defense, before you get too alarmed. I think defense active is 1.2 million, civilians like 700,000, so about 2 million of that is defense. They reinforce some of these themes that I've been talking about.
Again, there is no shortage of countries that want to partner with the United States, want to host the U.S. military, and want to look at ways to either reduce the spread of disease as the United States helped countries in West Africa in 2014, attempt to bring stability to the Middle East. I won't say we've brought it because it's not true, but there is an attempt to help bring some stability and an attempt—going back to the World War II theme—to help the world recover from war. You look at where Germany and Japan are economically as the number three and four largest economies. That was possible through the United States shouldering a large percentage of the defense burden as the Soviet Union was surging.
I think any criticism or comments when the United States asks allies to do more, it really is a sense of: "We've been carrying the burden for a very long time. We would like four weeks of vacation, too. We would like lower taxes, and so if others would spend more, then maybe we can spend a little less." But again, all subject to—like I said, I can't really say what's going to happen tomorrow, but maybe a year or two from now we can try to talk.
NIKOLAS GVOSDEV: Derek, I thought I would press you a bit further on a few things and refer back to a paradigm that you developed, a good shorthand of a way of thinking about when the United States, or any country for that matter, is faced with issues in the international system. You have to decide what you're willing to die for, what you're willing to kill for, and what you're willing to pay for. Some things may not rise to the level that you're willing to put yourself at risk, but maybe you're willing to give some resources.
At the end here, I wanted to ask you about two trends that we're seeing. One is that increasingly as we move into the mid-21st century the ability to kill others without having to risk being killed yourself, whether this is through the use of autonomous weapons systems, drones, shifting to battlefields like cyberspace rather than, as you said, in World War II if you wanted to take a power plant out, you had to send bombers, you risked being people shot down, and it was expensive. Now what you try to do is introduce malicious code that would cause an accident, that's different, and to what extent that makes it easier or harder.
Then the question about payment. You've talked a bit about continuity, but I think we are in a mood right now where the expansiveness of the American public to be writing checks for lots of things is now coming under doubt, so to say, "Well, why are we funding African Union peacekeeping efforts?" and "Why is the United States still having so much of the NATO burden?" and the like.
Moving forward, looking at the changes in the way that we can deliver lethal force and also the willingness to pay for things, any thoughts you might have.
DEREK REVERON: Tough questions. We've written a book about this.
I'll defend this for a moment. Since World War II the United States has launched a new military operation about every three years. I know that's startling on the surface. Some were large-scale duration, Vietnam War, Afghanistan War; some short-term regime change, Panama in 1989, Libya in ; long-term military operations, Iraq, still today.
The United States, where we live, has been relatively immune. Of course, there were the 9/11 attacks. Certainly that impacted New York tremendously and the country spiritually, but largely the United States itself has been immune from conflict. You have to reach back. In spite of all of those wars from World War II until about 2001, the United States hasn't been attacked.
I think that changes, to try to get to the short approach to the answer, through technology. Terrorism gives other groups and governments the opportunity to conduct attacks against the United States in retaliation. Because right now the United States has conducted these attacks with no concern of being counterattacked.
With the big states, nuclear deterrence is still up, and we have a good friend who spent most of his adult life sitting 100 meters underground ready to launch intercontinental ballistic missiles (ICBMs), and that's what keeps—again, one of the ironies of modern life is everybody being held hostage to being destroyed in 15 minutes. We won't do it.
That continues to keep that out, but what I worry and think about is that groups and governments can retaliate through terrorism. Certainly from Israel's perspective they worry about not Iran—Iran can't invade Israel, it's too far to walk; but Iran can activate Hezbollah groups to target Israel through terrorism, and they do. Again fortunately we're far enough away from that, but technology changes that.
We've seen a few examples. The way cybersecurity is talked about today, I would put it more in an intelligence/economic espionage sort of context, but we do have examples. Russian hackers shut down a Ukrainian power plant in December of 2015 for a few hours. The United States, because we're such an extremely wired society, is incredibly vulnerable.
Then you add the U.S. approach to the economy is largely laissez-faire. Businesses don't like regulation. Software companies in particular abhor regulation, and they can rightly point—I'd much rather be using my Apple device than if I were trying to rely on a U.S. government device. Apple is great. But this creates this dilemma within cybersecurity: When does it become national security to get a little closer to what you're thinking about. And that's unclear because we've got some structural reasons, business doesn't want to be regulated.
But at some point we've stopped talking about going shopping and e-shopping. We just shop. We've stopped talking about banking online and going into a branch. We just bank. In the same way I think we're going to stop at some point talking about cyberwar and just talk about war.
But these cybertools give governments and groups the means to attack the United States which they didn't have in the past. The U.S. government has been struggling with this for a couple of decades. The White House just released a new strategy, but if you look at the strategy on cybersecurity, again it largely relies on industry to solve these problems, which fits with our political culture on how an economy should work. So this Facebook data compromise of 50 million users is Facebook's problem to figure out.
I don't think we've seen any class-action lawsuits or anything yet that would go after this. Microsoft hasn't been held accountable for data compromises or anything along those lines. But at some point they might, and the information technology (IT) industry might have to behave like other industries in the United States, where auto companies have to live up to certain safety standards before they're allowed to sell cars, states regulate emissions. At some point, IT companies might have to be regulated along those lines.
They're doing their best to resist and work with government along those lines. Microsoft has been promoting global norms of behavior because they look at governments—not just the United States, but the Russian, the Chinese, the Iranian, the Saudi, the French, the Israelis—and want them out of the cybersecurity field, so they've been promoting norms. That way at least Microsoft can just deal with organized crime and terrorism and individuals and not with governments.
But it's in its infancy in terms of thinking about this problem. Hopefully, it doesn't take a major attack or power outage or loss of banking to get somewhere.
QUESTION: You mentioned that we have the benefit of natural resources. We have a number of other benefits. One of them at the top of the list would be that for years people have admired our values, the whole concept of "soft power." It's hard to envision what that would mean outside the context of what the United States did after World War II.
Recently Pew Research did a survey of this. They looked at 40-some countries and asked them if they trusted the American president to do the right thing. There was a drop of at least 50 percentage points from Obama to Trump. In fact, there were only two countries that saw any kind of improvement, which were Israel and Russia, and I'm not even sure you'd have Russia if we took that poll right now, not that we would want it.
My question is, what is the impact of that fact? Does it matter in the scheme of things for U.S. national security? And what does it mean if it continues, say, for another six years? Will this have a long-term deleterious effect?
DEREK REVERON: Great question. I saw the same poll. To quote another friend, Admiral Jim Stavridis, he once described, the United States wants to be that nice, happy golden retriever, this nice, happy dog. Just pet me, rub me behind my ear, and that's how the United States sees itself, as this nice happy dog, play with me. But the rest of the world views us as a pit bull, an abused animal. Pit bulls aren't necessarily vicious, they're abused, and they're big animals.
This is that conundrum. My initial reaction too was to point back. We saw this before in 2003, the United States invades Iraq against global opinion. It recovered. So that gives me a little optimism.
The other thing that I would look at is, so people are unhappy with the United States and its behavior, start looking to see is investment in the United States falling? Is tourism to the United States falling? The behind the scenes? Even back in the mid-2000s when we had the whole "freedom fries" thing, the public-facing parts of governments were saying one thing, but behind the scenes the governments were still cooperating. Even the United States and France continued cooperation during that period.
Again, I'm in that camp of I want to be that golden retriever and be liked and played with and all that, but we'll have to watch and see. Is there a lack of demand of countries wanting to partner with the United States?
You saw this press conference a couple of weeks ago [with] Poland. I'd want to look at the Polish numbers, where Poland is offering to build for Trump and pull the United States in deeper, and Poland isn't a treaty ally for the United States.
Those are the things I would look at. Is cooperation slowing? Is investment—we're in New York, you should be able to watch the markets better than anybody. Is that foreign money still coming in? Are people still wanting to invest in the United States or not?
I think we're going to experience a hyperinflation equivalent of some of these issues that have been pent-up for decades. Like I said, the United States has been wanting more European countries to spend on defense. President Trump brought it to a head. To quote the president, I guess we'll see.
NIKOLAS GVOSDEV: I think on this point, too, a good thing to stress is the initial polling reactions and then does that create long-term interruptions, and I think it's probably too early to say.
My read also is that this administration I think is very consciously gambling that: "You don't like us? You can deal with Xi Jinping then. Would you prefer to deal with him? If you do, lots of luck, gentlemen." We could say it's a very risky strategy because certainly Russia and some other countries are saying, "I guess we're going to Beijing instead and partnering there."
The question also of the values, of the attractiveness. What happens when the United States becomes just another country in the world, if it's, "Well, the Americans are no better or no worse and their values don't matter" I think is a longer-term question.
But I think you're right. I think it's too early, and so far there can be the public set of complaints and in private the linkages are still there.
DEREK REVERON: I'm an American. We have a great system. That's the amazing thing. The federal government is only part of our story. It's state government, it's city government, it's local communities. That's where I think oftentimes other countries that don't have the system that we have, they confuse it.
If you look at the British system or the French system, really strong federal national governments. But I think one of the things that makes the United States the largest economy in the world, the third most populous, no shortage of people wanting to emigrate here, investment strong. That's where I think there is no shortage of that. Again, it's because people can see, "Yeah, I don't like how Washington exists and behaves, but New York is great."
QUESTION: Susan Gitelson.
Let's go back to your naval background. How do you evaluate the evolution of naval power, which seems to be more important now? Of course, all the talk about the South China Sea, but also the Indian Ocean, and protecting the routes for trade. Trade is so essential. Tell us more about the evolution of the Navy.
One of the reasons that the largest concentration of the U.S. Navy is in Northeast Asia and Japan, forward deployed, is to make sure that trade routes stay open. We're a global country. A lot of our economy, though, is internal, but we trade globally. Like I said, my number-one import is coffee. I guess we could all drink Kona coffee from Hawaii, which isn't a horrible thing.
Navies are expensive, and so one of the important roles the U.S. Navy plays in the world is that it has a global reputation in global action because other governments don't spend money on navies. Navies are expensive.
But there is a tremendous amount of cooperation through navies. As I said, the U.S. Naval War College is lucky to educate future leaders of other countries and navies, so we have great partnerships where it's not unusual to have a Japanese ship giving fuel to a U.S. ship at sea.
In the Middle East, in Bahrain, the United States provides the admiral a good communications system for about 20 countries to operate together to protect. There is that important shipping lane in the Gulf of Aden where the Middle Eastern oil comes out, past Somalia, through the Suez Canal, the Mediterranean, and up into Europe. The United States gets tremendous value by providing leadership and some logistics capability and fueling for countries that couldn't go to protect their oil in the Middle East along those lines.
A lot of cooperation. Two or three weeks ago at the Naval War College, the U.S. chief of Navy hosted his counterparts from over 100 countries at the International Seapower Symposium. It occurs every two years. The head of the Chinese Navy came.
There is tension, absolutely, but the United States conducts in the South China Sea—to preserve it as an international waterway you have to contest it. We do the same thing with Canada because we have maritime boundary disputes with Canada. So it doesn't have to escalate.
I think navies are expensive but essential for trade not only for the United States but I think globally, and it gives us a little more leverage in the world, too.
QUESTIONER [Ms. Gitelson]: You haven't mentioned the Panama Canal.
DEREK REVERON: Without a doubt. It's a bad joke, so I'll disclaim it as such. There wouldn't be a Panama Canal without the United States. In a sense it should be the Colombia Canal because the United States facilitated what we call Panama today, its independence from Colombia on that isthmus, setting aside the building that actually happened by French and then U.S. engineers.
U.S. military doctrine says we should be prepared to defend the Panama Canal. Today it really has to do more against terrorism, but the way the defense is done it is done in a multinational way, where every August there is a large maritime exercise. I think for at least the five years the United States hasn't headed it. We provide the support. Either Chile or Brazil did the last one.
The United States has this great role. We don't have permanent enemies, so the United States can be friends with Greece and Turkey, the United States can be friends with South Korea and Japan, we can be friends with some tension between Colombia and Ecuador. Back to the soft power, again it's something I think about a lot and is concerning, but the United States has this ability to balance and mitigate concerns that other countries have.
QUESTION: David Musher.
You talked about the paucity since World War II of military intervention. We certainly had the great Cold War which was fought by deterrence.
Economic warfare has been employed extensively and I think successfully. Do you think there is more of a future of that? Do you think it has peaked? Could it be used more effectively? Would you comment generally on that?
DEREK REVERON: Let me start, and then I'm going to turn it to Nick, because this is something he thinks about.
When we say "economic warfare," my first question is: Well, who does it? Is it the U.S. government? The Treasury Department? Or is it businesses?
Up until a little bit into World War II and then probably a little afterward, the U.S. government did have an Office of Economic Warfare. But I think the way economics developed in the latter half of the 20th century is back to this laissez-faire idea, government doesn't get involved in the economy. That's why I think it's largely absent from U.S. national security today.
Could it come back? I think there would be huge resistance from U.S. businesses and markets if the U.S. government, if the Treasury Department said: "Hey, Coca-Cola, you must go build a plant in Somalia." Considerable risk there. The U.S. government lets businesses decide where to invest their money. We don't have state-owned enterprises like China does or Russia does or Norway does, so the U.S. government can't direct businesses in that sort of way. But I don't know. How do you answer that question? Do we need an Office of Economic Warfare again?
NIKOLAS GVOSDEV: It's interesting that you bring this up because the administration is moving a proposal through Congress which has passed the Senate to begin reconceptualizing how the United States deploys aid money in more of a Chinese direction, which is to take the Overseas Private Investment Corporation (OPIC), the various investment funds, and to actually make the U.S. government become an investor in projects around the world, not to be a permanent investor, but to bridge—to take Derek's example, in the past we would try to cajole Coca-Cola: "Build a plant in Somalia."
If this proposal moves through and it is adequately funded—both of which are very big ifs at this point—you would have the U.S. government through one of these funds, a government fund, building the plant and assuring the security, and then selling the asset to private business to run at some point in the future. So you may see the U.S. government begin to go more toe-to-toe with China because we're very aware now of how China uses a debt-equity trap. We've just seen this in Sri Lanka, where China has taken control of a port that the Sri Lankan government borrowed to build and then was not able to pay back to China, and now China has facilities.
The other question—and we are now seeing the first stages of this—is at what point does the United States use its dollar hegemony and access to its financial system as a stick so much that it's the straw that breaks the camel's back to finally say: "The dollar is a great currency. America is a great economy to do business with, but if they keep imposing sanctions, let's find an alternative."
The dollar is the most attractive currency in the world for people to use. It's the easiest currency to use for purposes of international trade and finance. Access to the markets in New York, access to the U.S. economy, and by extension the ability of the United States to use that access for partners, to say to partners: "You can do business with us or you can do business with a sanctioned country." But with the European—Mogherini on the sidelines in the UN General Assembly said that Europe is hitting a point with regard to Iran and preserving the Iran deal that simply because the United States is going to reimpose sanctions that Europe is now looking for ways to get around those sanctions.
If this special payments vehicle proposal gets off the ground—and again, very big if—who would run it, how would it be collateralized, all of those are important technical questions, but this would be the first chink in the armor of allies and partners saying maybe having an alternative to the dollar isn't a bad thing, maybe having an international trade and financial regime whose sinews don't run through the United States isn't a bad thing. This goes back to the conversation we had here two weeks ago, which is that we as Americans take for granted all the benefits we enjoy from the dollar and the status of the dollar. When Americans say, "What do I care about the dollar?" I'm sure everyone cares about the low mortgages that they pay and low interest rates and the fact that oil is denominated in dollars and therefore there is a demand for people to have dollars.
If we move to where the euro and yuan become currencies in which oil is denominated, then people say, "Well, I don't need to hold as many dollars now because I can use these other currencies." It's in both directions. One is we may move in a direction which we haven't in the past to the U.S. government becoming much more of an economic player as the U.S. government in the way that China has been. On the other hand, we also are running the risk of if we keep using sanctions the way we have, at some point countries will say, "Yes, using another payments vehicle is inefficient and is more expensive, but we have no choice."
What the Europeans do in the next six months is going to be quite interesting. If this is a point where European firms say and you have Europeans that say, "Keeping the Iran deal is more important than implementing U.S. sanctions." Then we say: "All right. We're going to sanction you for doing that." We've always had this choice. "You'll always prefer to do business with us."
This actually goes back to your soft power question in a different way. We have not contemplated what happens when someone says, "Yes, I prefer someone else over you, the United States," because so much of what we do in the world assumes that we are the partner of choice for security, for business, for economics, and what happens.
DEREK REVERON: Because it's not a benign security environment, and that's where I think economically there's a lot of frustration. I have to imagine that's what is driving the decline in numbers of U.S. approval on the approach to trade.
But then on the security front, Russia is incredibly threatening to Central and Eastern Europe. China is terrifying to countries in Northeast Asia and throughout. I was engaged in a track 1.5 diplomacy discussion. One of the Australians commented about China's South China Sea policy. He's like: "Look, we're 2,000 miles away, and you scare the heck out of us on these issues." That's where I think countries might want to go their own way, but they recognize if you undermine the United States in the economic space, in the security space you can't afford to do that.
I would hope, too—I guess I would be a little frustrated with these numbers. We've had 70 years of a good relationship, and the last two change all that? I guess my personal reaction would be a little more visceral in like, "Okay, the relationship was that deep that we can't deviate from how you think we should behave?" I guess that's where I would personally push back a little bit.
One of the things the United States has been doing is global interests have become national interests. Not only this administration but the previous one talked about nation-building at home, too. Go back to the 2000 campaign. President Bush as a candidate talked about nation-building at home. President Clinton talked about the "peace dividend," and we saw a dramatic decline because we used to have about 400,000 troops in Europe; today it's 50,000 or so. That all occurred during the 1990s.
That's where I would try to unpack a little of this and get beyond—but we might be living in a different age, too, this age of quick reactions and the social media platform that uses a bird and so on.
QUESTION: I would feel a lot better if I could figure out what U.S. grand strategy is. In preparation for today I re-read the latest version of our National Security Strategy, and I don't see one there. It's 55 pages of glittering generalities addressing all problems in all ways with all states. There's no sign of what the Naval War College called "practicing the economy of enemies." Of course, they use Bismarck as a classic example, but not necessarily war. He was containment policy, we knew what it was.
Everybody didn't know about National Security Council-68 (NSC-68) and Project Solarium, but we knew we're going to draw this perimeter and hold it until the Soviet Union collapses. Even countries like India or Yugoslavia, which weren't favorable to the United States, could play their role inadvertently. I'm glad Ms. Gitelson raised the question of the South China Sea because it seems to me our policy there is to become the ducks in the shooting gallery, ducks that can shoot back but not adequately.
Admiral Stavridis spoke here last year. He said we could win a war with the Chinese, though it would be very bloody, if we had a 350-ship Navy. The trouble is, we had a 280-ship Navy. The Chinese are just going to seize more islets, more rocks.
DEREK REVERON: That's a great point, and I think the specter of nuclear apocalypse prevents any low-level pushback. That's where I think diplomacy is the only tool. We've seen this before during the Soviet Union, uprisings the United States encouraged if you look at Budapest in 1956 or Prague in 1968. You're not going to intervene because you're not willing to risk nuclear war with the Soviet Union.
I think the same thing with China. We forget that. So the United States is looking at diplomatic and legal means to push back. It's dissatisfying and ineffective, but I think we also have to come to the terms with the fact that China is the largest trading partner with the United States. This isn't a cold war. You could fight your war with the Soviets and it wouldn't impact your economy directly. But with China things are different.
To your point about grand strategy, it's often a search. I don't even know if this is true, but it is remarkable that the United States in spite of all its problems, its inability to articulate a coherent strategy and stick to it, still has a large economy, largest debt in the world, still low interest rates. There are some remarkable things, and I'm just going to default back on the old Cold War thing that "Americans play poker, Russians play chess." Chinese now play go. We don't do strategy. And yet, maybe life is just one big poker game, and we do pretty well at it.
Again, I've thought about this for decades. I can't explain it.
QUESTIONER [unidentified]: In the journals, like the one from the Naval War College, one from Leavenworth, there are people who write in and say, for several years now: "We have to accept that Red China is going to control the Far East. Japan will make a deal. South Korea will make a deal. Taiwan will be observed, and we just have to accept it." If that's not going to happen, we have to figure out what we're going to do about it.
DEREK REVERON: I don't think war is the approach that will happen because war is simply too costly for both sides. I think this is that Thucydides' trap that Graham Allison describes that you're driving us down. Graham said, "If we don't change our approach, then we will go to war, and no one will win."
So we have to find a way to recognize China's return to the international system. If you do Purchasing Power Parity (PPP), China is the number one economy in the world, the United States is still by gross domestic product (GDP), so you have to accept this in some way.
This is the earlier point Nick brought up. I would say it was baked into the international system. If you stop and think why in  when they did the UN treaty in San Francisco why they said the Permanent Members of the Security Council would be the United States, the Soviet Union, Nationalist China, and then the United Kingdom and France. From our history and understanding I can get to why we want France and the United Kingdom on there with us as Permanent Members. But the original plan for the international system and FDR's approach to the "Four Policemen" idea is that the Soviet Union would play an important role in international security and so would China.
We're going to have to somehow reconcile that the United States is the indispensable nation but that there are other indispensable countries, too. I think that's where it can become a challenge.
We have little case studies playing out. If North Korea normalizes, China is a part of that because they don't want the headaches of North Korea and nuclear war on the Korean peninsula. So we'll see. That's one way to normalize it.
QUESTION: Rita Hauser.
I want to come to the point you raised at the beginning about will Americans be willing to die, etc. You also said to pay for. By latest estimates, we will have shortly a larger debt payment per year—over $1 trillion—than we pay for the military, which will be the first time in our history, coupled with a very aging population which needs and must have medical care and all the rest of it, so there's virtually nothing left for the rest, infrastructure, whatever you want.
How can you foresee a future with ever-increasing expenses for the military given rising interest rates, greater costs of interest payments, domestic needs? Where does this pie go?
DEREK REVERON: Great point, and I think the big defense budgets that we had last year, this year, and maybe next year are going to reset the force, but I think where the Trump administration is driving, allies need to pay more.
QUESTIONER [Ms. Hauser]: There's a limit.
DEREK REVERON: The United States is opening up its defense industrial base. Last year Italy was the largest buyer of U.S. weapons. We're starting to see that flip around. I think in the top five, four were European countries. That's how you get it.
We could say the U.S. defense budget is big. It's expensive. I'll put it in a bigger context saying that other countries don't spend enough. Everything we do militarily in the world is done with other countries, but the United States subsidizes those countries, and they're rich countries. So the United States is offering, you can buy U.S. aircraft and ships and training to help offset that because I think there is recognition that we've been on this course that defense spending is unsustainable where it is.
You could do two things: You could do less, or you can have more partners. If you look at the U.S. defense strategy, there are three big things. The second thing is promote international partnership and get that. We have foreign military officers embedded in U.S. commands in the United States, so we're trying to integrate more in that way. They're getting paid by their governments. And opening up our most sophisticated weapons systems to our foreign partners, which had not really happened beyond a few in the past, as a way to get that.
NIKOLAS GVOSDEV: I think that speaks both to a shift toward greater burden sharing, but then also we will have to begin deciding again things that we can't do, and I think maybe this is a part of the hangover from the end of the Cold War where we thought we could do a lot and that no problem was beyond reach, perhaps returning to a greater era of prioritization where some things are not going to get done, and if the United States doesn't do it and other countries don't do it, then it doesn't happen.
With that, we're going to bring the formal program to a close, but please join me in giving our vote of thanks to Derek.
DEREK REVERON: Thank you, Nick.