Q: How do you foresee the crisis in Hong Kong playing out? How will the western countries respond? Do you expect significant financial market turbulence driven by the politics at this financial hub?
A: Stephen Kotkin: Hong Kong’s unique role as a financial center was already feeling strong competition from newer financial centers on the mainland, such as Shanghai. So the relative decline of Hong Kong’s supreme importance was happening independent of politics. But Hong Kong still has advantages and is still very valuable to any regime in Beijing, even if the latter dismisses Hong Kong’s value.
More broadly, Hong Kong is a remarkable achievement and needs to be preserved for the benefit of China as well as the world. Hong Kong deserves far more credit than it usually gets for the mainland miracle. People often say to me Russia should have gone down the Deng Xiaoping path instead of the Gorbachev path; I say, well, Russia had no Hong Kong. Other countries should pressure Beijing to lighten or repeal its security law, not pressure Hong Kong by repealing the special status it has been granted by foreigners. Beijing signed a treaty on Hong Kong and is violating that treaty. Punish the violator.
Q: Arrogance and insecurity is how you describe China. Is the US really any different? Asked by Stewart Brentnall, TCorp (Australia)
A: Stephen Kotkin: Yes, the same fatal combination of supreme arrogance and profound insecurity has been evident sometimes in US behavior internationally. It is a characteristic of superpowers that have any domestic legitimacy weaknesses or whose elites are worried about relative decline abroad. A key difference is that the U.S. has greater legitimacy for its system as well as crucial corrective mechanisms at home. Abroad, US alliances are voluntary and allies can influence US behavior in significant ways. Citizens and partners can temper US behavior. So despite some similarities, it is different in significant ways.
Q: What is the realistic path for Europe? What about the US / European relationship? Asked by Joel Whidden, Bridgewater Associates (United States)
A: Stephen Kotkin: One possible realistic path for Europe is to introduce a Northern Euro. This would be a voluntary currency that some countries could join if they wanted to and if they met certain criteria. Everyone else would be left inside the existing euro. The latter countries could choose to remain or exit. Exits in those circumstances would not be fatal to the larger idea of a Union. It would instead be a way for countries to reintroduce their national currencies, for greater flexibility and legitimacy, without undermining their ability to participate in other institutions of Europe. The current euro has to go, but in a way that does not throw the baby out with the bathwater for those countries’ publics that want to remain in a Union of some sort.
Another pathway would be greater humility on European powers versus national powers. The European leaders who want to create a political federation have no chance to achieve their aims. This is not a realistic path forward. But even now, without a federation, the European court powers override nearly everything domestically. This is not the case with most federal systems by the way, let alone for systems that are not federations and have no chance of becoming one. A rebalancing of prerogatives is not a way to undermine the Union but to strengthen it. This is a controversial point for those who consider themselves “pro-Euroepan”.
The Transatlantic alliance of shared values and institutions – what we call the West – should be sustained. The “China threat”, however real it is in terms of threats to freedom and rule of law, is not sufficient to hold the Western community together. There must be a positive vision, too. The shared values and institutions need articulate and resolute defenders. It is tragic how in the U.S. conservatives insist Western Civilization should be taught at universities but they detest the European Union, while liberals in the U.S. oppose Western Civilization courses yet celebrate the EU.
The security relationship remains out of balance by fault of both sides: the US for inhibiting for a long time a European desire to become more self-reliant in defense, and the Europeans for not maintaining the necessary level of capabilities or finances for collective defense with the US. This can be fixed but has not been because of the seeming binary quality of the choice: either invest everything in NATO, or invest everything in a common European security instead. And we get neither.
Where things get much harder is translating the Transatlantic partnership to a greater global partnership of ‘Western’ countries that share institutional and value commitments to democracy and the rule of law. Here, Japan fit into the West (institutionally). Australia fit. But much of Asia will be uncomfortable with that category. South Korea, Taiwan, India, and others are all crucial partners, but not Transatlantic, obviously. Even if the ‘West’ stretches beyond the West geographically now, we need to invent a new basis of solidarity of shared values and institutions without the original geographic term. Here, our marketers could help out!
Q: You are an expert on Russia, Stalin and Stalinism. In your discussion of megatrends, you don’t mention Putin, Stalin’s successor. Can you comment on Putin’s effect on the world, particularly his continuing intervention in western elections, military interventions in Syria, Ukraine and others?
A: Stephen Kotkin: If I am correct that the main megatrends in the world are mostly culs-de-sac, stagnant without obvious paths forward, Russia, too, falls into that category. The Putin trajectory, which did so much to rescue the Russian state from the 1990s ongoing collapse, performed that rescue with the kind of methods that undermined that rescue over the long term. As a result, Russia’s state is again eroding, and the Putin regime is a prime culprit. The primary victims of the Russian regime are Russians, though. They lack sufficient diversification in the economy, investment in human capital (on the contrary they are hemorrhaging human capital), investment in infrastructure, or good governance (governance is deteriorating). The regime is muddling through, but without a way to move the country forward.
As for Russia’s behaviour abroad, it can indeed be nasty. But we exaggerate their influence. Syria is a civil war and a ruined country. Russia has little to no strategic gain from Syria. Russia’s interference in US elections backfired horribly on their reputation, and achieved little to nothing of practical value (and did not affect the election outcome). We need to differentiate between tactical gain – which is what happens on cable television – and strategic gain, which is what happens when your country gets stronger: more investment in human capital, infrastructure, good governance. Russia’s adventurism abroad has delivered next to no strategic gains. This is important to keep in mind as we assess how to counteract such behaviour.
