‘Ger­many’s aus­ter­ity fetish wrong,’ says aca­demic

Hoover In­sti­tu­tion se­nior fel­low Niall Fer­gu­son on the day af­ter for the US with Trump, the EU with Brexit and Greece with the refugee cri­sis

Kathimerini English - - Focus - BY YAN­NIS PALAIOLOGOS

Niall Fer­gu­son looked rested and ready for ac­tion as we sat in the roof gar­den of Athens’s Ho­tel Grande Bre­tagne on the day he was due to speak at the Del­phi Eco­nomic Fo­rum ear­lier this month. The pre­vi­ous evening, the dis­tin­guished Scot­tish his­to­rian had ad­dressed an event at the Con­stan­tine Kara­man­lis Foun­da­tion, where he had de­fended the Trump ad­min­is­tra­tion’s pri­or­i­ties and urged Europe to em­u­late the new Amer­i­can pres­i­dent in his com­mit­ment to spur eco­nomic growth and adopt a ro­bust for­eign pol­icy.

I told him that I found his talk very in­ter­est­ing and dis­agreed with about 83 per­cent of it. He laughed and replied, with feigned dis­ap­point­ment, that the aim was for the au­di­ence to dis­agree with 100 per­cent of what he said.

How­ever, the goal for Fer­gu­son – who lives in the US and is a se­nior fel­low at the Hoover In­sti­tu­tion at Stan­ford – is not just to pro­voke: He was a harsh critic of Barack Obama’s eco­nomic and for­eign pol­icy, and gen­uinely hopes the new gov­ern­ment, un­der the guid­ance of House Speaker Paul Ryan, will im­ple­ment the nec­es­sary re­forms that will re­store the lost dy­namism of the Amer­i­can econ­omy.

The US is in ur­gent need of tax re­form and steps to ra­tio­nal­ize the “bloated” wel­fare sys­tem and dereg­u­late the econ­omy, says Fer­gu­son. The leg­isla­tive pri­or­i­ties will be set by Ryan and the Stan­ford his­to­rian does not think there will be any re­sis­tance from the White House – not even to poli­cies that de­part from Don­ald Trump’s pop­ulist rhetoric.

Turn­ing to the 44th pres­i­dent, Fer­gu­son dis­misses the eco­nomic re­cov­ery as “ane­mic” and, in any case, the “work of [Fed­eral Re­serve chief] Ben Ber­nanke, not of Obama.” He refers to Oba­macare as noth­ing more than a “band-aid” and makes the rather ex­treme claim that the $800 bil­lion stim­u­lus pack­age “ac­com­plished noth­ing.”

He is equally out­spo­ken against Obama’s legacy in for­eign pol­icy. “We have for­got­ten the lessons of the 90s,” Fergu- son says in ref­er­ence to the West’s in­ter­ven­tions in places such as Bos­nia and Kosovo. “The sit­u­a­tion is far from ideal but it is far bet­ter than a state of war. This should also be the aim in the Mid­dle East.”

Fer­gu­son ar­gues that in the af­ter­math of the Iraq in­va­sion, which he sup­ported, a new men­tal­ity of re­treat took hold, which per­me­ated the Obama ad­min­is­tra­tion and led to a se­ries of hes­i­tant, in­ef­fec­tive moves in the in­ter­na­tional arena. “Iraq was aban­doned and Syria was left to burn. Then there was the tilt to Iran and the nu­clear agree­ment – with the crazy ex­pec­ta­tion that a 10-year de­fer­ral of its nu­clear pro­gram would bring about some won­der­ful lib­eral tran­si­tion,” says Fer­gu­son. “If the No­bel Peace Prize were given for speeches, then Obama would de­serve it. But it’s ac­tions that count, not speeches.”

Fer­gu­son stresses the need for sta­bil­ity in the Mid­dle East and North Africa, warn­ing that all the el­e­ments – eco­nomic, de­mo­graphic and ide­o­log­i­cal – “are there for a much big­ger con­fla­gra­tion than what we’ve seen so far.”

“The with­drawal of the US from the in­ter­na­tional scene un­der Obama did a lot more dam­age than the in­ter­ven­tions of the neo­con­ser­va­tives,” Fer­gu­son claims.

What is needed now, the his­to­rian says, is a “diplomatic-po­lit­i­cal vi­sion for the Mid­dle East, which will re­place the [World War I] Sykes-Pi­cot Agree­ment and set­tle is­sues that have been around for decades.

“I be­lieve, for ex­am­ple, that there is a strong ar­gu­ment for a Kur­dish state and for the view that an al­liance be­tween speak­ing at the Con­stan­tine Kara­man­lis Foun­da­tion in Athens ear­lier this month. Fer­gu­son was a harsh critic of Barack Obama’s eco­nomic and for­eign pol­icy, and gen­uinely hopes the new gov­ern­ment, un­der the guid­ance of House Speaker Paul Ryan, will im­ple­ment the re­forms nec­es­sary to re­store the Amer­i­can econ­omy’s lost dy­namism. Turkey and the West is no longer fea­si­ble. And all of this, of course, mat­ters hugely to Greece, which is on the front line of all this – some­thing that many in the Euro­pean Union refuse to ac­knowl­edge.”

But even if we were to agree with Fer­gu­son’s crit­i­cism of Obama, what makes him be­lieve that the Trump ad­min­is­tra­tion will do a bet­ter job, given the op­pos­ing voices within it and the pres­i­dent’s fun­da­men­tal lack of knowl­edge of for­eign pol­icy? And how would this new vi­sion be im­ple­mented? With Amer­i­can ground forces?

Fer­gu­son re­stricts his re­sponse to say­ing that the plan should not be overly re­liant on Amer­i­can ground forces, be­fore launch­ing into a trea­tise on the na­ture of mod­ern war. It is ob­vi­ous that he too has no idea what form the new US gov­ern­ment’s for­eign pol­icy will take.

Fer­gu­son re­cently stated that he had been wrong to sup­port the Re­main cam­paign in the UK ref­er­en­dum. “We de­served to lose. There were no com­pelling ar­gu­ments to sup­port Bri­tain’s mem­ber­ship of the EU.” The main prob­lem now, he ex­plains, is that this is “the long­est and most ex­pen­sive di­vorce in his­tory, which will ab­sorb all the en­ergy of the Bri­tish gov­ern­ment. We don’t want Brexit to be­come a ver­sion of the Greek tragedy, with the en­tire time con­sumed ar­gu­ing with bloody Euro­pean bu­reau­crats, but I’m afraid that this is where we’re head­ing.”

Ris­ing Euroskep­ti­cism and the chaos in Wash­ing­ton seem to sup­port those who ar­gue the West is in de­cline. Among them is Fer­gu­son, who has ex­plained the suc­cess of the West as the prod­uct of six “killer apps”: com­pe­ti­tion, the sci­en­tific revolution, prop­erty own­er­ship, mod­ern medicine, the con­sumer so­ci­ety and the Protes­tant work ethic. In a lec­ture on the sub­ject five years ago, the aca­demic claimed that emerg­ing coun­tries of the East have “down­loaded” these apps, as they start los­ing their power in the West. Is this true, though? Doesn’t the ab­sence of the rule of law in coun­tries like China mean that they are at a dis­ad­van­tage against lib­eral democ­ra­cies in the long term?

“I still be­lieve that the new con­ver­gence be­tween the West and the oth­ers will con­tinue, in part be­cause the oth­ers are do­ing some things right and also be­cause the West has lost its way, with its ex­ces­sive reg­u­la­tory bur­dens and huge debts,” says Fer­gu­son. “China has adopted al­most all of the apps, but it does not have the rule of law, and the re­sult is that wealthy Chi­nese want to get their money out of the coun­try. How­ever, China has done in­cred­i­bly well without the rule of law – it has gone from the grind­ing poverty of 1978 to be­come the world’s sec­ond big­gest econ­omy in 2016.”

When it comes to the long run, how­ever, the Scot still puts his money on the US: “I have an enor­mous amount of faith in the in­sti­tu­tions of the Con­sti­tu­tion, and also in the in­stincts of the Amer­i­can peo­ple and the peo­ple who em­i­grate there.”

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