the talks with foreign affairs editor james hoge at new york university's center for global affairs for just over an hour. >> thank you. thank you. welcome. nice to have you back. michael is also a repeat offender. he has been on this program before because he is always writing the book. i think we are up to 12 now. it is in that range. he is a good friend. he is also someone that i admire greatly. he is not only a wonderful analyst and the global affairs, but a beautiful writer. i was telling him earlier today when we chatted that the book just got all sorts of wonderful ways of

director of the american foreign policy programs at the johns hopkins university school of advanced international studies which is based in washington. a former faculty member at harvard and columbia university and the u.s. naval academy. the author of 11 previous books. the current one, which we are going to discuss tonight is called the frugal superpower -- "the frugal superpower". let's start with the first part of this title because it tells us two things. one is that we will not be without power altogether. we will have a pretty important role. but then the front part of it does not normally go with

superpower, at least not in our history, as michael points out in his book. we get very used to spending whatever money it took to have the position that we had in the liabilities, the debt that we are all carrying out and the wars that we have fought and so on. but there are also some new liabilities coming forth. what caught my eye to a great extent was the retiring baby boomers place of a not insignificant role in your

analysis. >> that is right, jim. thanks for having me on the stage with you again. it is always a pleasure. thanks to nyu for playing host to this event. the government already has a very substantial obligations. we borrowed a lot of money between 2001 and 2007, and then we borrow even more to deal with the financial meltdown of the recession of the last few years. the amount of money that we borrowed and that we there for zero will be torn. that is america is born between 1946 and 1964. those retirements are going to break the bank that cost for social security and medicare will skyrocket because there are so many, 78 million. the largest age cohort in american history. now, we have gotten into the

habit as a country of not raising as much in revenue as the payout at the government and bridged the gap with borrowing increasingly from foreign government to the chinese. the boomers are going to be so expensive in retirement that we are not going to be able to bar of the money we need to even from the chinese. that means that despite what politicians promised, especially in this election season benefits are going to be cut and taxes are going to go up. that is going to change the political climate. that will mean that all of the familiar signposts of politics of the last generation are going to come into question. one of the things that will come into question is the american role in the world. i think the american public is going to feel much less generous but supporting the far-flung and in my view on the whole extremely constructive international activity they face

when their social security is being cut and they're having to pay more in taxes. so the united states is going to have to be frugal in its foreign policy. relief for the first time since the beginning of world war two. we have gone seven decades without really looking at the price tag in a way that we are going to have to. that is the first part. we will have to be for will. the public will stand for it something else. i also believe the united states will remain the world's only superpower. i don't think anybody else will take our place. lots of things in the world that if we don't do them, they will get done. if they don't get done, and i discuss these various things that the united states does, the world will be a worse place. all of us, not just americans will be poor and less secure. >> getting into some of the things that we are going to give up. that is where i would like to start which is one of the ways when you start using cost as a

way of deciding what policies we should follow are not rather than what the threat is out there, something you're not going to do anymore. what are some examples? >> when the start my eye was the humanitarian intervention and the democratic ids. >> i think there will go by the wayside. since the end of the cold war in the last two decades the united states has engaged in military interventions in somalia, bosnia, haiti, kosovo, iraq and afghanistan. these military interventions had varying motives, but they all ended with the united states spending a lot of time and effort trying to build a working governmental institutions in these countries to use the familiar term. we have got ourselves involved in nation-building all over the

world. whenever you think of those particular missions with you are for or against him we really come to the end of them. there are just too expensive. none of them have been all that popular with the public. they came about in response to an attack on the u.s. states. now that in the nation-building has become unpopular. although i think members of the foreign policy community and members of the government see this kind of activity as the wave of the future. a lot of talk about reorganizing the defense department and converting the state department so that its officials will be better at doing the things of we have done in these countries. i think the public will permit it, and it's tough going to happen. >> on that last point, hillary clinton's big quadrennial report

is out. it seems to me she is stating exactly the thing pier sank the public will put up with. the public's publicity and deployment. the bill suggests that we are going to try to do the same thing we have been dealing with the military. >> she has said that, her predecessor said that. people in washington are very enthusiastic about these kinds of missions and about retraining our foreign service personnel for doing them. i just don't think it's going to happen. the end of the date the american public is simply going to vote thumbs down. at the end of the day the american public gets to decide what we do and don't do. there is much to be said for these humanitarian missions. we have done a lot of good around the world, and so arm as well i suspect. for better or worse i think that the economic pinch that all americans, especially american

taxpayers, and especially american voters are going to feel in the decades ahead because of all of these obligations that the government has and the weight of the government is going to have to respond to them, that pitch is going to make people very, very stingy when it comes to these kinds of humanitarian missions. i know that officials in washington think that this is the future, but i think they're wrong. >> i have to tell you, michael has developed a this line of thinking, skepticism for a long time. and i was just beginning as head of foreign affairs and the clinton years he wrote a piece called foreign policy. i have to tell you that people in the clinton administration were damn serious. all these things which are not first concerns from the point of view of our own prosperity and

security. >> it did happen and the public has never been very happy, but they have been relatively permissive. these missions seem to be things that we could afford. they come to it be things that people believe they cannot afford and then the public will call a halt. >> now, the other area of where you still some real retrenchment is the station or in the democracy around the world. but a great deal about this has been written by you. i don't suspect you mean give it up altogether. it is not only basic value, but it has always been part of making the room more stable and secure for us. what do you see going forward? what are some of the limitations put in now? what we plan to do with or about democracy in the world beyond our own shores? >> the united states has always

favored the spread of democracy and always will. i trust that we will never give up our commitment to democracy and our commitment to democracy around the world grows out of our basic commitment to democracy at home, and that is not going to change. the question is, what do you do about it? we have always talked the talk, and in recent years we have walked the walk. we spend lots of money, hundreds of billions of dollars and over 4,000 lives in trying to bring democracy to iraq. the verdict is not yet in. hardly a functioning democracy, but it has made real progress. to the extent it makes progress, that is justifying the investment that the united states has made, but we are simply not going to be able to afford that kind of investment. so while we will continue, while we will continue to make speeches, while we will continue to cheer from the sidelines in

favor of democratic forces everywhere, spend much money promoting democracy in the future. >> of cape. a couple of things we may have to give up or cut back on, but you also are quite clear on some of the things that we have to sustain commitments on. for example, stability and security in europe. east asia. non-proliferation of nuclear weapons as best we can. last but not least, in fact most you say the protection of free flow. and i want to not depart from that because this is one of the simple parts of this book which is that oil and our dependence on it is that its biggest single foreign policy affair of the last several decades and the biggest challenge we face going forward of anything else. why? why isn't that big a deal?

>> that is the message of the frugal superpower. i would say -- i wouldn't say it has fallen on deaf ears in washington because most people agree with me. they're just not going to do anything about it because they think it is politically suicidal to do what needs to be done which is raise the price of gasoline considerably. gasoline tax, which i favor on the order of the one that the europeans and japanese pay, to a half-3 times as much for a gallon of gasoline as we do, probably the least popular public policy proposal and the entire united states. nonetheless i do think, as you rightly say that it is the most important foreign policy measure that the united states can take. the reason is this. if you look around the world and you look at the countries that make trouble for us, all of them depend on oil revenues and all of them use the revenues that they get from the sale of oil to make trouble for the united

states. there is a wrong which uses oil revenue to try to get nuclear weapons to try to evict the united states from the middle east and threaten to destroy israel. there is russia whose leader, mr. proven, uses the oil revenues that he gets to try to up toward the united states and europe. there is venezuela where it its leader is the leading anti american ports in the western hemisphere. last but certainly not least there is saudi arabia. saudi arabia is a little different. saudi arabia is nominal and in some ways an ally of the that the states, but it is also true that some of the revenues from oil that accrue to saudi arabia find their way into the hands of terrorist groups, including the group that attacked the united states on september 11th 2001. all of the money that we pay to saudi arabia and other countries pay to saudi arabia for its auto

in the to united states is waging a war against terrorism and funding. so if you think, as i say, about the major problems we have in the world they are all fueled by oil revenue and therefore the most important thing we can do to further our interest in the world and reduce the major threat that we face is to deprive some of our adversaries of the resources that they used to oppose us, and the way to do that is to consume less loyal. tickets in less will globally, to be sure, but consuming less will globally it begins with the united states because we are the largest consumer. the way to consume less oil is to have a much higher gasoline tax. if we all pay more for gasoline that will produce conservation. we will all use less, and it will also produce substitution. alternative sources of energy will become commercially viable. over time the world can been

itself from oil. if we get the price of gasoline high in of an electrical power cars become commercially attractive and when they become commercially attractive lots of private money will flow and the development of ever more powerful batteries which is what is needed to make electric cars good enough to substitute for gasoline powered cars. so that is a roundabout way of saying that the most important thing that we could do to further american interest in the world and in the long run lower the cost of foreign policy by weakening our adversaries is to start winning the world from oil with the higher gasoline tax. now, as you have pointed out to me in the past, jim, this is politically a nonstarter. i am well aware of that. i don't think that there is any elected official in the united states of america who actually has come out publicly and supported this measure. but i am modestly optimistic that we will get a higher

gasoline tax within the last life span or i would say everyone in this room. some of us are not spring chickens. so let me explain briefly how i think this is going to come back. i think it will come about for economic rather than environmental or foreign policy reasons. because of the enormous obligations of the united states facing we will come to a point where we will all realize that we have got to get serious about reducing the deficit. and if and when we get serious about reducing the deficit that will mean two things. mean cutting benefits, but it will also mean raising taxes. raising taxes is going to find its way onto the national agenda whenever politicians say. and if and when the question before the country is not whether we should raise taxes because the answer to that that everyone gives is no, but rather

what taxes we should raise, then a gasoline tax and even a broad energy tax, a carpet tacks begins to look not exactly attractive, but less attractive than the of the taxes we could raise. i believe, i certainly hope that a gasoline tax is going to come in as it would through the back door. >> in the meantime i suppose we have just got to get more energetic about conservation efforts that could be done without the gas tax. it's going to be a while. but get the current political campaign going on. a diversity through taxation is a high water mark. >> it is, indeed. yet in this campaign some people, notably the celebrated tea party are saying that the size of government is to bake. we have to reduce the size. that proposition seems to me is unarguable true if you define

the appropriate size of government as that size for which the american public is willing to pay because clearly we have a bigger government and what we are willing to pay for. well, if we elect next month lots of people who go to washington saying government is too big, if they are serious about doing something about it and they're going to have to look at a range of programs. once you start cutting programs, especially programs that are important to lots of people like social security and medicare you really cannot avoid cutting social security and medicare. that is where most of the money is. once that is on the table tax increases have to be on the table as well. then you get into the process of negotiation and bargaining and compromise in which everybody is going to have told his or her nose and accept something that he or she does not like. one of the things that i think is likely to be accepted is a

gasoline tax. if you follow the campaign today you don't even get a whiff of that. you don't hear anybody talking about that. the logic of what a lot of people are saying the ads that point. >> okay. >> there is going to be a faction of u.s. what is going to be taking its place. one answer would be there will be somebody from one singular pleasure to take their place. the one that might come closest as china. it will have to have more cooperation and partnerships at a time in which we have rising powers who even when they wanted to be cooperative have different priorities, different names and we do predicting it more

difficult rather than less difficult in getting cooperation from the partners? >> i think we are looking at a morgue difficult time. i very much agree with you that, no individual power or group of powers is going to take the place of the united states. china is certainly becoming richer and more powerful and playing a larger role in its own region. china has no vision of playing a global role, and in any event it is important to keep in mind that for the foreseeable future china will be home to hundreds of millions of very poor people. the first priority of any chinese government will be trying to lift those hundreds of millions of people of property. i don't see the european union playing the role of a global superpower. they cannot get their act together to act as a unit in security and political affairs, although they do a little bit better in economic affairs. the eu is the natural partner.

these are our traditional allies. these countries are all democracies. a lot of experience working with them. they share our values. there are differences between the two sides, to be sure, but the kind of world that we want is basically the kind of the europeans want. from my point of view the starter and more active europe foreign policy the better it is for us because that leighton's our load. i don't think that is going to happen. the kind of economic burden that we face in the future will be even heavier for the europeans. their societies are aging even more rapidly. their social programs are even more generous. they are going to struggle to take their version of social security and medical care. the united states is actually in a better position going forward of the european countries. our population is growing. our part force is not to and billing. the population of every major european country is going to

shrink. they're not going to be in the mood to pitch in and give us more help than they do now. we are likely to get less help. that does not bode well because, as i argue, the united states for all of our faults and shortcomings that is important and constructive things. i argue that the united states is the world's defector government. some, although not all of the citizens that governments provide for the societies. if and as the united states does less that means that the world will get less governance which is not a good thing. >> well, on two things, one is the economic. perhaps europe and still be looked upon as a crucial partner for us. on the maintenance and security and instability in the world they are not even up to self-defense and the more. they have cut their defense budget so much.

so as we look out word and look around for partners and ways to stabilize or keep stability where it is we can look to europe. what is your opinion? >> i must regretfully agree with that. the europeans are doing very little now to help us maintain global security, and i fear that it will do even less in the future. the american government is reaching out to rising powers such as india and countries in southeast asia and east asia that are concerned about china. our traditional allies, japan and korea and vietnam. and i think in east asia other countries are sufficiently concerned about the possibility that the rise in china may impinge on their interest. they are willing, passively, to cooperate with the united states. if china becomes a threat at think they would join. i don't think they're willing to be active and certainly not

willing to give us up in any other part of the world including the part of the world where i think we faced the largest and most serious immediate threat. >> of going to ask you one more question. if there is a vacuum, at least a partial vacuum because of our entrenchment history would say there are players who will be sensitive to take advantage of that to be the two big ones you would have to worry about are china and russia. the classic realist by john would say there is no real argument here. we never solve these problems without a first-class power conflict. what is your view on how likely it is that we are going to be heading if not tomorrow in the foreseeable future into a much higher level of conflict in the world? >> russia and china, as you know, are the major potential troublemakers in the world, and i devote a chapter in the "the frugal superpower" to them. neither of them is altogether

satisfied with the status quo, especially in their respective regions. each of them has grievances, changes that it would like to make. neither of them is about to become a larger version of denmark. there is a potential threat from both of those countries. my best guess is that neither one of them is going to act in no way that would threaten the status quo so severely that the united states and other countries would have to respond in military fashion. i don't think on balance that we are going to have to return to the kind of policy of containing china and the soviet union that we practiced during the cold war. for china the most important thing is sustained economic growth. economic growth depends upon a stable and economic order.

and for china to challenge the political status quo in east asia would, i think, risk disrupting the global economy and thereby inflicting damage. i think the chinese will be relatively prudent about what they do. as for russia, the russians, i think, are a little less burdened. of course, they depend on the global economy to sell the one product that the world wants to buy, mainly energy. russia is a one proper economy. they have that facilitating against making trouble in europe. there is another reason that i am cautiously optimistic that russia won't make a huge amount of trouble in the years and decades ahead. the reason that does not apply to china, and that is that whereas china is becoming stronger russia is becoming weaker. the russian population is shrinking. the russian economy depends almost exclusively on the export of energy.

the russians might like to make trouble, but i think, knock on wood, they are not strong enough. >> a hundred and 50 million people now. it may be close to 200 million. 300 million. >> and growing. >> and growing. but i want to come to the audience. if you have a question put your hand up. wait for the mike, tell us if you are, and we will go from there. try to keep it concise. one question per customer. >> the middle east, several things you point out. it is down to what is probably the most fervent and if it continues on its nuclear past, the most reckless radical power, and ron. another thing you point out which i found intriguing was that of all the regions in the world in which there are potentially less signs of problems the middle east is a place where we have the least

reliable allies. >> peron is of very impressive power to overturn regimes a dozen light and replace them with reasons that it favors. control the world's supply of oil. the ride is genuinely a world power. unfortunately the surrounding countries are simply not very strong. the oil producing. although we sell a lot of expensive weaponry, i don't think anyone really expect saudi arabia to be able to defend itself. israel certainly is able to defend itself and is our one reliable ally, but israel is not going to be able to deal with a run on its own. so whereas in east asia we have a country that is in some ways like a wrong, namely north

korea, we have a lot of strong allies there. south korea, japan, and china which is not exactly an ally. depended upon to try to keep north korea from doing anything to direct the provocative. in the middle east we have nothing. that means stability, the prevention of the radicalization of the middle east with the possibility that the world oil supplies will come under the control of the hostel, radically anti-western regime that is the government of ron. that, unfortunately, seems to depend almost exclusively on the united states. that is not a distant challenge. that is a challenge for today. ..

>> the context will change substantially in the years ahead and in the first chapter of the book i outlined my reasons for believing that. if everything stays the same politically then my predictions order for everything to stay the same we will have to repeal the economic loss of gravity.

parts of the pakistani government, the isi, the intelligence wing of the government, we have good reason to believe it is supporting the taliban and it also supports radical groups that commit acts of terrorism in cashmere and against india, but we know that some of the terrorists whom we have caught tried to commit terrorist acts in the united states and have been trained in terrorist camps in pakistan. so we would like the pakistanis to be not to faced but when faced. we would like them to shut down there at assistance of the taliban and the camps that are used to support terrorists. but the pakistani government is both unwilling and is unable to do that. the pakistani civilian authorities are weak and when we press them to do the things we want them to do they say, you

know, we don't have the power to do that and if we try to do that, our government and will collapse and they may well be right. if we were to say to them hokie we will go in and do it, they say they make an enemy of pakistan and pakistan to make things even more complicated is a nuclear-armed state. so what we do is keep paying them, keep nagging at them and hope things will improve without any particular reason to believe that they will. >> with a hopeful note. yes, ma'am. right here. i agree with every word unfortunately. the argument has been made that our presence in the middle east is what creates the radicalism and extremism that you were referring to but you said that by protecting the world's oil sources of to us. can you be more specific about what we need to be doing there and comment on of that argument happened?

>> the american presence in the middle east especially the military presence undoubtedly friends some of the people living in those countries. although it is also true that the place where that presence is largest, neely iraq is a place where on the one hand our presence is resented but on the other, a majority of iraqis if you believe the polls they don't want us to leave just yet. they want us to doherty eventually but not now. so in iraq at least the attitude towards the american presence is ambivalent. from the american point of view i think we have an interest inae in that part of the world, and yet we do have some responsibility for ensuring the free flow of oil so that creates a dilemma for us. what we are trying to do is walk that tightrope, minimizing our actual presence while doing what we think is necessary mainly

with naval forces to ensure that the world can depend on the flow of oil from that part of the world where, as it happens, two-thirds of the world's readily accessible reserves of oil are located. now, let me add one other point here and that is if iran gets nuclear weapons, our task is going to become even harder, and according to some analyses, that would require us to have a much larger troop presence in that region than we have now come and that is yet another reason for us to do everything we can to prevent iran from acquiring nuclear weapons. but as with pakistan this is a problem with no easy answer, probably with no good answer. >> let me throw in a couple here. to get a small bright light on the stories you are telling tonight, you point out that if there is a retraction of america's position in the world

there is at least one possible benefit and that is we might make fewer errors and you need to big ones, iraq war and expansion of nato to decide the borders of russia. on the last one, why has that been such a problem? you said that we may have created an alienation with russia that would last a year. it obviously had a much more dangerous view of nato than we do or europeans to. >> the nato expansion was ill-advised in the 1990's because there was no particular reason to do that, and the reason the american government gave at that time to promote democracy in the country store being taken in were purely hypocritical and on the one hand the countries that joined were solid democracies and on the other hand if nato were really a democracy promoting instrument as it isn't, then we had an

enormous stake in bringing into nato the one country where democracy was most in jeopardy, mainly russia. but the administration of the time, the clinton administration made clear that russia would never be invited to join. now nato doesn't pose a military threat to russia. but it is a way of excluding russia from europe and it's a way of making russia a second-class citizen in european security affairs, and those of us who oppose the expansion of nato in the mid-1990s predicted, and it wasn't just me, it was virtually all people with real expertise in russia in putting the late george kennan we feared at a delicate time in russia's political evolution this would return the russian political class against the united states and indeed that is what has happened. the russian political elite is reflexively antiamerican.

that isn't true of the russian political elite, it's true of the russian people. dispels anti-american rhetoric regularly and one reason i believe he does that is it is popular. it plays well in russia, and the unpopularity of the united states i believe goes back to be ill-advised decision to expand nato. when people ask me what should we do about the my response is it is both too late and too early to do anything about it. i think the end of the day russia probably should be admitted to nato, but we cannot admit to nato russia today a aggressive bleeding hypocrisy run by a group of people who were in power mainly to steal the oil revenues. so we have to hope for the political evolution of russia that would make it once again what it was i believe at the beginning of the 1990's and that is a fit partner for the united states and the west.

but to go back to your original point we made that mistake out of overconfidence. we made that mistake because we were so powerful we could accord to do anything. well we are not going to have that mind set in the year is going forward. >> have we already begun to make some modifications, for example, we meant me be 50 add meat to it that ukraine and georgia are not to be led into nato anytime soon. >> that is certainly true, but that is yet another bill consequence of the decision to expand nato because once the decision is made, then -- and the administration said we will admit any country that wishes to join. welcome georgia certainly wishes to join in and yet we are not going to include it because it is too dangerous and close to russia and far from the united states and has already sought to controversy war with russia. those of us who oppose nato expansion in the 1990's predicted that this point would

come when we would unintentionally and artificially breed fight europe. we have no interest in a divided europe where some countries are in our alliance and some are outside. we want a united europe, and as i say a thing we could eventually get there. i hope we could eventually get there but that would require an internal change in russia. meanwhile, we have to hope both for a positive evolution of the russian political system towards a more space regime, and i am sorry to say continually week russia. >> weak the countries can be a problem themselves just because they're weak. that's in the case of russia. it could lash out one or another direction because it is a declining power both in population and economic activity and security capabilities and the rest of it. the other one is china which is the opposite, a rising power to go back to the defense budget

which is mentioned. china has a racist and modernization of its military campaign and the creation for the first time since about the 15th century over the food color tv. if there were either china or the united states is looking for a major conflict that i think we could stipulate. but there is time, there is to that and other flashpoints probably more in northeast asia than anywhere else for a major conflict between the two states. if we have the blue collar navy's suspicious of each other across the china sea, i tend to get worried. are you worried and how much of the problem is the military campaign? >> i think you put your finger on what is perhaps the greatest danger that we face from russia and china. in writing the chapter on russia and china and the frugal superpower, i came to the somewhat surprising conclusion, i say surprising in that it

surprised me when i came to eight that in fact we may have more to fear from a weekend and an unsuccessful china and weak and unsuccessful russia down from strength in either country. the legitimacy, the stability of both governments began upon two things. one is economic progress and both are done very well over the last decade. russia really only because of the rising energy prices. and second, the second basis of legitimacy is nationalism. the regime's claim that it is defending the national interest against countries that would unhinge on it. three guesses as to which countries they often have in mind. it has a red white and blue flag. well, if those countries, if russia and china do poorly economically, if economic growth stocks or even reverses, then these two regimes, neither of which has space legitimacy and neither of which has been freely

he elected will revert to its other basis for legitimacy and popularity that is nationalism, each of them might calculate that in order to remain popular it has to whip up the nationalistic enthusiasm and that means finding a foreign enemy, and we are the logical candidate. or if we are not the logical candidate, the logical candidate for the nationalist -- a nationalist outreach, nationalist initiative on the part of china and russia would be a country that what looked to us for protection to retire one in east asia, maybe ukraine in europe. so an unsuccessful russia and china especially economically might be a greater threat to the stability of europe and east asia and therefore a greater problem for the united states than if these countries continue to be economically successful. >> the other thing i would add to that, michael, is china at the moment is quite successful

in many respects, and nationalism is still on the rise. when you go there you can just sense it in the air, and every time there is even a minor infection between china and the united states we see it burning up in fact every once in a white you read stories about the war years itself what it set off. >> well, if nationalism is powerful now china when the government is not encouraging it, imagine how much more powerful it might be if the government and its political desperation decides that its own salvation lies in spanning the flames a would be even worse. >> not all frets in military or security to state the obvious. some are economic and some are values. one phenomena that we have going on in the build right now is it's not a threat, it certainly is a challenge both to us economically and in terms of

value and that is the rise in the state capitalism. by that i mean capitalism in which the government plays a dominant role where the economy goes, who gets what and so on and its fleet almost with one-party political system that allows for a certain kind of efficiency. the most obvious example is china. how concerned are you that state capitalism, with its political linkage as well, is a real threat to the stability of the democracy and market economics elsewhere. >> well we know you can have capitalism without democracies, and in my last book democracy's good name i had the privilege of discussing with you the venue, on explore the relationship between the two. so the fact that china is capitalist and economically successful without being space

is nothing new. i would note that state capitalism is after all a form of capitalism. it just involves a larger role for the state. it is on one part of the spectrum which goes all the way to the united states where the role of the state is much less important, but they're still part of the same family of economic systems. so that's one point. the second point i would make is that china has done very well with its state capitalist model, but we can't be sure, and the chinese cannot be sure that it will continue to do well. in fact, many students of the chinese economy believe that in order to sustain the very high rate of economic growth of the chinese achieved for the last three decades, they are going to have to modify their system, they are going to have to have less government intrusion. that state capitalism that they have is going to have to have more capitalism and less of the state, so it is not clear going

forward that this model would work so well even for the chinese. that of course only the future can tell. >> have you seen any signs yet that china -- it may be aware of it intellectually but it isn't in action is becoming more aware it needs to change its political system to some degree? >> there is an awful lot of discussion and china about changes in the political system. i have been surprised at how wide the latitude of the permitted discussion is. in fact as far as i can see there is really only one taboo subject in the chinese political discussion, and that is the supreme role of the communist party. that you are not allowed to challenge, and that is a huge exception. no doubt about it, because as long as the communist party monopolize power you're not going to have real democracy in china. nonetheless, the chinese political succession does include permitted discussion about free speech, about

elections, about federalism, about checks and balances. so i did the chinese have come a long way. this still this huge hurdle they haven't gotten over and may not get over any time soon, but i don't think it's true to say that political discussion in china is frozen. >> not anymore. on one of my recent trips i visited a couple of think tanks that i've been to a number of times before. and the director said when i showed up this time almost casually look, we can talk about anything you want except tibet and taiwan, okay? and then he looked at the ceiling at the mics this time. but one phenomena i noticed in the 70's when i was a reporter and used to go to the soviet union from time to time i was struck by the fact they had reached a point where the rolling central government and the political mechanism felt that it could no longer know enough about what was going on

around the country unless it unleashed the press. but there was a really tough rules in the south, one written everywhere but everybody understood which is you can blame gettysburg from the fact the british steel, do not connected in any way to the kremlin. in other words, responsibility was cut off at the provincial level. i notice some of the same things now going on in china. if you go to some of the provinces, you will find very tough investigative reporting but it doesn't involve beijing. >> there is a worry that dictators throughout history, and especially in the 20th century have had, which can be summed up by the phrase give an inch and they will take a mile. and that tends to happen and they did happen in the soviet union. gorbachev opened up the political system thinking that no one would criticize him and was astonished at the avalanche of criticism that he received.

now the chinese leaders are mindful of the soviet example. they do not want to go down that path. but they seem to be edging toward that half. so they may ultimately need the same thing. >> recently had begun to ease up somewhat on the labour force which is a recognition i think of the fact that as labor gets somewhat more organized and gets a little richer itself it cannot be treated as casually in the past. >> there were strikes and china in the foreign-owned factories. the workers demand higher wages and they got them. >> and they got them. we are about ready to close out, but we've got time for one or two more questions. yes, michael. >> michael oppenheimer. you've spoken about the inevitable entrenchment in the american engagement in the world, not due to content, but just the fiscal limitations.

do you acknowledge the threats don't conveniently go away and that will in fact, in some respects they get worse. so you have set up this tension for us. what does that look like in 15 years when we have entrenched spending in the military, less physical presence for the soviet in the world and the less reliable, the world is become more dangerous. the world hasn't left us alone. we still are talking in that system. what do -- how do we respond in 15 years or so to the inevitable fritz and the sort of tugs on the american engagement that historic we almost always responded to? >> we are going to have to set priorities, and that will mean not doing some of the things that we have done in the past. there is a lot of interest in sending forces to sudan to rescue the beleaguered people of

sudan. maybe if these were the early 1990's we would do it, but we are not going to do it now. we might have done more in haiti after the earthquake 20 years ago than we are doing now. we will have to make choices, and we will not do some things that we would like to do, and that if we did them would make the world a better place. >> you say when it's all done that is going to be more dangerous and disorderly world, and then you have one comment that really echoes with me to the allies or people who don't even want to have to consider ourselves allies important we were, and that is that the will is going to learn they may have been more uncomfortable with america when it was too powerful they are going to be even more uncomfortable with an america that is too unpowerful. >> if you didn't like the america that was too strong wait

until you see america weak week. will be even worse. >> michael, thank you very much. it was a terrific session. [applause] over here we have the froebel superpower. it's a brilliant book. i highly recommend it and the author is here to sign. >> for more on michael mandelbaum and to read his recent essays, visit foreignaffairs.com and search for his name.