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The
Bubble of American Supremacy: Correcting the Misuse of American Power by
George Soros Rating: •• (Mildly Recommended) |
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title or picture to buy from amazon.com |
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Bursting Attentive observers already know that George Soros is trying hard to
defeat George W. Bush. One small aspect of that campaign involved publishing
Soros’ latest book, The
Bubble of American Supremacy, which contains little new information, and
not much that will persuade anyone undecided in the 2004 presidential
campaign. What Soros does in this book is assemble and organize his past
writing and thinking, and apply it to what he believes has gone wrong under
Bush’s leadership. Soros refutes the neocon philosophy that guides the Bush
administration’s policies and tactics. Here’s an excerpt, all of Chapter 11,
pp. 176-188: It may be surmised from the closing
remarks of the last chapter that I have become rather rabid in my political
views. This is a novel experience for me. I used to be rather balanced between
the two main parties, seeing some good and some bad in each and leaning only
slightly toward the Democrats. Even today, I remain rather evenhanded by
finding much to criticize in the leadership of the Democratic Party.
Certainly I did not use to consider it a matter of life and death which party
won the elections. I do now. I attribute this change not to some
sudden quirk in my character but to a qualitative shift in the role that the To explain what I mean by this
statement, I must invoke a theory I developed in connection with the stock
market. I believe something akin to a boom-bust process, or bubble, is
occurring now in connection with the Bush administration’s pursuit of
American supremacy. I realize that comparing the present situation to a stock
market bubble is a flight of fancy, a fertile fallacy, but it is worth
pursuing because it casts new light on the predicament in which we find
ourselves. We are caught in a quagmire in The important thing to understand about
stock market bubbles is that they do not grow out of thin air. They have a
solid basis in reality, but reality is distorted in the participants’ minds
by a misconception. As I explain at greater length in the appendix, there is
an inherent discrepancy between what people think and the actual state of
affairs. Normally the discrepancy is kept within bounds by a self-correcting
process: People notice that outcomes fail to correspond to expectations and
adjust their expectations accordingly. These are what I call near-equilibrium
conditions. There are occasions, however, when a trend that manifests itself
in reality is reinforced by a bias or misconception prevailing in the
market, or vice versa. A boombust process gets under way in which both the
prevailing interpretation and reality itself are propelled into far-from-equilibrium
territory. Eventually the gap between reality and
its false interpretation becomes unsustainable and the bubble bursts. That
is what happened in the case of information technology. The technological
advances were real, but their importance was exaggerated. Initially, the
exaggeration accelerated the innovations, but eventually, the self-reinforcing
process became unsustainable. In that instance, the boom was sustained longer
and the reversal came later than I and many other so-called experts
anticipated. The bust was correspondingly more severe. Exactly when the boom-bust process
transgresses normalcy and enters far-from-equilibrium territory can be established
only in retrospect. During the self-reinforcing phase, market participants are
carried away by the prevailing bias and fail to notice a growing discrepancy
between their beliefs and reality. The misconceptions may be tested, and if
the trend survives the test, the misconceptions are reinforced. This widens
the gap and sets the stage for an eventual reversal. Although this course of
events seems to have an inexorable quality about it, a boom-bust process can
be aborted at any stage and the adverse effects reduced or avoided
altogether. Few bubbles reach the extremes of the information technology
boom that ended in 2000. The sooner the process is aborted, the better. In my view, the Bush administration’s
quest for American supremacy qualifies as a bubble. There is an underlying
reality: The United States does occupy a dominant role in the world. There is
also a prevailing bias, a misinterpretation of the underlying reality. I
have described it as a crude form of social Darwinism that regards life as a
struggle for survival in which the survival of the fittest is determined by
competition, not cooperation. In the economy, the competition is between
enterprises; in international relations, between states. To date, It is one thing to give commercial
enterprise free play, but quite another to unleash military power. There has
always been a connection between business and the military, and it has
always been suspect. President Eisenhower spoke of the military-industrial
complex. The nexus between big business and the military can corrupt both.
Historically the As discussed previously, the neocons
behind the Project for the New American Century advocated greater military
spending, and many of them were associated with the defense and oil
industries. For instance, Richard Perle, who received no salary as head of
the Defense Policy Board, made a lot of money as a corporate consultant. Dick
Cheney was president of Halliburton before he became vice president, and
Halliburton’s lucrative contracts in Until recently the reflexive connection
stayed well within the bounds of normalcy, as demonstrated by the lack of
progress in implementing the neoconservative agenda prior to September 11. In
spite of a determination to introduce discontinuity into American foreign
policy— anything but Then came the tragedy of September 11,
and that is when the process entered far-from-equilibrium territory. As I
hope to have shown, it was not so much the terrorist attacks themselves that
created an abnormal situation but the Bush administration’s response to them.
President Bush declared war on terrorism, and by linking terrorism with
weapons of mass destruction, he gained a mandate for invading The public did not realize that
declaring war on terrorism and attacking We have fallen into a trap. Traps work
by getting people or animals enmeshed in them; cool heads are needed to
extricate oneself. The motivation of the suicide bombers seemed
incomprehensible at the time of the attack; as we look back now, a light
begins to dawn: They wanted us to react the way we did. Perhaps they
understood us better than we understand ourselves. As a proponent of radical fallibility,
I am reluctant to ascribe too much foresight to anyone; yet in retrospect I
can discern the vague outlines of an imaginary master plan conceived by an
evil genius called Bin Laden. From his perspective our civilization is
degenerate. It is rich and powerful but devoid of true faith. It needs to be
destroyed ftir the faith to prevail. The only way to destroy it is by exploiting
its weakness: the fear of death. It will respond to a terrorist attack by
lashing out against an unseen enemy. Since the perpetrators remain invisible,
the instinctive reaction will claim innocent victims. The victims will be
Muslim, and Islam will be radicalized, provoking a general confrontation
between Islam and the West. Although the West enjoys material superiority,
Islam will prevail because it has a major competitive advantage: It is not
afraid of death. Events so far have lived up to this
putative Bin Laden’s wildest expectations. The twin towers of the I have been arguing that while the
public has reacted instinctively, the promoters of American supremacy surrounding
President Bush had a master plan of their own. They brought the plan with
them when they came into office, and they adapted it to the circumstances
when the terrorists struck. In effect they exploited the instinctive reaction
of the public for their own purposes. But they did not anticipate the
untoward results. Judged by its own criteria, the Bush administration’s
pursuit of American supremacy has been a dismal failure. The two master plans have something in
common with each other and with a stock market bubble: They are initially
self-reinforcing, but eventually are bound to be self-defeating because they
are built on a misinterpretation of reality. This is borne out by a closer
consideration of the master plans themselves. We have no difficulty in seeing
the absurdity of al Qaeda’s master plan of preserving the purity of Islam
through terrorism, although we are more inclined to call it evil rather than
just false. And rightly so. What can be worse than killing innocent people in
the name of religion? We may have more difficulty in
perceiving the absurdity of pursuing American supremacy through military
means, because we have learned to rely on military power and we feel the need
for it particularly strongly when our very existence is threatened. We do not
think of ourselves as being guided by an ideology; we consider ourselves much
too pragmatic for that. Yet ideology has come to play an abnormally large
part in deciding government policy, and the discrepancy between perceptions
and the actual state of affairs has also grown abnormally wide. This could
have happened only by a self-reinforcing process that gathered strength
gradually over the years. Indeed, that is what happened. Once
market fundamentalism allied itself with religious fundamentalism it managed
to capture the Republican Party. The social Darwinist ideology was reinforced
first by the success of globalization, then by the collapse of the Soviet
system. It is only with the election of George W. Bush that the pragmatism
of geopolitical realists yielded to the revolutionary zeal of the advocates
of American supremacy, and it is only after September 11 that the
supremacists gained the upper hand. We should not push the analogy with a
stock market bubble too far. Comparing the pursuit of American supremacy to
a stock market bubble is an imperfect fit. If we treat it as a fertile
fallacy, however, it can provide some valuable insights. In the early stages of the process, the
participants in a bubble do not see the absurdity of their convictions; on
the contrary, reality seems to confirm their perceptions. Only at a later
stage does the divergence between expectations and the actual course of
events become apparent. Then there is a moment of truth followed by a
reversal. When the reversal occurs, it becomes self-reinforcing in the
opposite direction, and depending on how far the bubble was inflated, it can
cause a lot of damage. The important thing to remember about a
bubble is that there is nothing preordained about it. Boom-bust processes can
be aborted at any time, and the sooner it happens the less harm they do.
There are random fluctuations in stock prices every day, and they do no
harm. It is only when critical thinking is suspended or suppressed that the
reflexive interaction between reality and its interpretation can get out of
hand. That is what happened in the aftermath of September 11. Where are we in this reflexive process?
We stand either at the moment of truth or at a testing point that, if it is
successfully overcome, will reinforce the trend. We shall not know which of
these alternative applies until the presidential election. The quagmire in Unfortunately, al Qaeda has not yet
reached the moment of truth. As a result of our reaction to September 11,
its master plan is still in the self-reinforcing phase. Far from reducing the
terrorist threat, the war on terrorism has actually increased it. We find
ourselves trapped in Where do we go from here? As I keep
insisting, history is not predetermined. I can see a number of scenarios. One
is that the Bush administration toughs it out and actually manages to
stabilize the situation in I do not think this scenario is
realistic. We have moved too deeply into far-from-equilibrium territory to
return to the status quo.
I favor a third scenario, namely, a profound reconsideration of *For a cogent analysis, see Wesley
Clark, Winning Modern Wiry: Soros’
opinions are thoughtful, and his presentation is clear and direct. Readers
who agree with him will enjoy turning the pages of The
Bubble of American Supremacy. Readers who disagree are unlikely to bother
reading this book. One more takeaway that I think summarizes his opinion: “Our
nation must concern itself with the well-being of the world. We will be the
greatest beneficiaries if we do so.” (p. 30). Steve
Hopkins, September 25, 2004 |
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ã 2004 Hopkins and Company, LLC The recommendation rating for
this book appeared in the October 2004
issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/The
Bubble of American Supremacy.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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