(Bloomberg Opinion) — At the risk of criminal oversimplification, one could look at the last seven decades of U.S. foreign policy as a story of two competing ideas.
One, which flowered after the fall of the Soviet Union, is liberalism. Among its tenets is that America benefits if it spreads its values across the globe and is willing to use its economic and military power where liberty, sovereignty and universal rights are threatened. This school brought us the good (Ukraine, at least for now), the bad (the 2003 Iraq invasion) and the ugly (Kosovo in the late 1990s). There are various factions — liberals, interventionists, neoconservatives, etc. — but the idea is that the U.S. does well by doing good.
The other school of thought, which largely held sway through the Cold War, is realism. It holds that the world is a scary place, and America’s leaders have a duty to protect core national interests above all. This too is not a monolith; a dinner party with George Kennan, Henry Kissinger and James Baker would have been a contentious affair. Nor does it engage in sheer cynicism or isolationism — the U.S. can and must intervene when those interests are gravely threatened — but it needs to choose from its head not its heart.
Prominent among the latest generation of realists is Emma Ashford, a senior fellow at the Atlantic Council’s Scowcroft Center (named for an icon of realism, former National Security Advisor Brent Scowcroft). This week we discussed Russia’s struggles, Ukraine’s bravery, and her book coming out in August, “Oil, the State, and War: The Foreign Policies of Petrostates.” Here is a lightly edited transcript:
Tobin Harshaw: Through the “realist” lens, how do you feel about the Joe Biden administration’s handling of the run-up to the Ukraine war and events since the invasion?
Emma Ashford: Prior to the invasion, the Biden administration did a relatively good job continuing to talk to Russia, trying to see if there was a way that this could be resolved other than conflict. Certainly, they did not pursue all the avenues that they could have, as we now know from U.S. officials that they did not really broach the subjects of EU expansion or status within NATO. It’s an open question whether that could have prevented the war, but it would have been better to have tried.
However, since the conflict began, the administration has stated very clearly what the limits are, that U.S. interests are not sufficient to actually send troops to intervene, but that we will arm Ukrainians and help them in the fight. That is an appropriate balance, and they have struck it well. I’m a little concerned about some of the ways in which sanctions verge from being relatively severe into extremely unprecedented in historical terms; but overall, I think the administration has done a relatively good job.
TH: What’s the danger of the sanctions becoming truly unprecedented in their scope and damage?
EA: There was legitimate concern when the central bank sanctions were put on — fears it might prompt Russian retaliation. It’s sort of lost to memory four weeks later, but the Biden administration had said just a few days before that it wasn’t even considering them. Luckily those fears haven’t been born out.
Now the talk is about further energy sanctions from Europe. There is a risk that if you hit the rest of the economy too hard, then the Russians will decide that there is not a lot to lose by retaliating. That could be the first step in a spiral that leads to a broader conflict.
TH: Are there any grounds on which you could see direct intervention as being in U.S. interests? For example, if Putin tried a tactical nuclear strike or chemical weapons?
EA: I don’t believe that there is a situation in which NATO should actively choose to enter the war. There are situations in which we might get pulled into a conflict accidentally. There’s lots of scope for misperceptions, for accidents to happen, or for Russia to decide to escalate the conflict. But I don’t feel there would be a situation in which we should risk a nuclear war. What we’re seeing on the ground is absolutely awful, but that doesn’t change that fundamental calculus.
TH: I don’t know that you’d consider Putin a realist or a pragmatist necessarily, but he certainly plays hardball geopolitics. To what extent did he see the invasion as being in Russia’s vital interest?
EA: There’s been a sentiment in Russian foreign policy for a decade or more that Russia was being surrounded by NATO. That certainly played some role here. There is also the historical importance of Ukraine to Russia. Putin viewed Ukraine as slipping away from Russia slowly toward NATO. One of the interesting things is that, from a purely rational standpoint, it really doesn’t make sense for Russia to fight this war.
But one of the things I write about in my book is that in states with a lot of oil, and very personalistic leaders, you can end up with an echo chamber at the top where leaders don’t get good information and might end up believing that something is in their interest when it’s not. Putin has been listening to a very small circle of people who tell him what he wants to hear. And he ends up starting a war that has not necessarily been in his best interest. It hasn’t gone well as a result.
TH: In “Oil, the State, and War,” you say that Russia’s military modernization of the last decade was a “quintessential example” of how oil wealth leads to defense spending. Does this war so far show that petrodollars can’t buy you everything?
EA: It’s funny that in the book I talk about the Russian case as one of the more successful instances of military modernization using oil wealth. What we’ve seen in the last six weeks is that this does not automatically translate to effectiveness.
I also write about that in the context of some of the Gulf states and their militaries as well. Oil money can buy you advanced weapons. It can help you build up your military industrial base at home. It can even pay for the transition from a pure conscript service to a system that has contract soldiers. But none of that alone will resolve underlying pathologies in a military.
TH: Another example would be the war in Yemen, where the Saudis and the Emiratis have learned that you can’t just bomb your way to victory.
EA: Yes. The story that I tell in the book involves several oil-rich states, not just the Saudis and the Russians, but also the Emiratis, the Kuwaitis, the Venezuelans. Each have used their oil wealth in ways that they think strengthened their militaries, but they’re not always making the best choices. The Saudis thought that fancy fighter-jet bombing capabilities would help them to achieve victory in places like Yemen. And what we’ve seen there is that without the ability to also fight on the ground, they’re simply not able to make progress.
TH: In the book, you say that there are three types — or three and a half types — of petrostate. Can you briefly explain?
EA: There are basically three big things that we could think about oil doing for a country. One is making it very wealthy, of course. So the Norwegians have a very high per-capita income.
Another is the “resource curse” — that oil dependency can have serious negative impacts on your domestic political and economic development. So sometimes being an oil state undermines your development trajectory.
The third thing is, maybe you are a big global energy producer, producing more than 3% of world oil supply. If there’s a shortfall in your production, the price of oil would rise; that makes you important to the world economy.
What I show in the book is that some states have two or three of those qualities at the same time. The Saudis have all three, for example. And so their foreign policy ends up being a little more idiosyncratic. But other states have only one or two.
TH: Does Russia fit into more than one of those categories?
EA: Yes. With Russia, of course, there is this confounding feature that they weren’t even a capitalist economy until 1991. But today, the Russian economy is heavily dependent on energy exports, and commodity exports more broadly. And we can see the economic distortions that it has caused. The Russian state is also relatively oil wealthy; that income has allowed for it to do things like spend massively on social programs.
Finally, if there’s one thing that this crisis has really highlighted, it’s how important Russia is to world oil markets. Russia produces around 11% of world oil supply. Not on the level of the Saudis or the U.S., but it puts them at third place. And what we’ve seen in recent weeks is you just can’t shut that off from world markets without a huge cost to everybody else.
TH: The Gulf states are making a big deal about trying to diversify their economies. Will they make much progress on this?
EA: The track record is not good. The only state that’s really been very successful at diversification has been the UAE. And that has been the result of some really unusual factors. They’re well located to set themselves up as a transport and tourism hub. It’s harder for any other state to do that.
What we’ve seen in the Gulf over and over is when oil prices fall, leaders realize that they need to try and diversify their economies, and they start very ambitious reforms. The population resents the enforced austerity, and then, inevitably, oil prices go back up and the pressure for diversification goes away. This is a very cyclical process. And it ends up not producing the reforms that those states need.
But we all know that we are staring down a century-long process of decarbonization. And so at some point the states do need to diversify, and I’m afraid that the prospects are not good.
TH: To wrap up, your book’s not coming out until summer. Other than Ukraine, what military or geo-economic flareup are you most concerned about having to update it…
