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HOOVER DIGEST

RESEARCH + OPINION ON PUBLIC POLICY


WINTER 2015

T H E H O OV E R I N S T I T U T I O N S TA N F O R D U N I V E R S I T Y

The Hoover Institution on War, Revolution and Peace was established at Stanford University in 1919 by Herbert Hoover, a member of Stanfords pioneer graduating class of 1895 and the
thirty-first president of the United States. Created as a library and repository of documents,
the Institution approaches its centennial with a dual identity: an active public policy research
center and an internationally recognized library and archives.

The Institutions overarching goals are to:

Understand the causes and consequences of economic, political, and social change
Analyze the effects of government actions and public policies
Use reasoned argument and intellectual rigor to generate ideas that nurture the
formation of public policy and benefit society

Herbert Hoovers 1959 statement to the Board of Trustees of Stanford University continues to
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and its method of representative government. Both our social and economic systems are based on private enterprise, from which springs initiative and ingenuity.
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cannot undertake it for themselves. . . . The overall mission of this Institution is,
from its records, to recall the voice of experience against the making of war, and
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By collecting knowledge and generating ideas, the Hoover Institution seeks to improve the human condition with ideas that promote opportunity and prosperity, limit government intrusion
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WINT E R 2015 HOOV ER D I G EST.OR G
The Hoover Digest explores politics, economics, and history, guided by the
scholars and researchers of the Hoover Institution, the public policy research
center at Stanford University.
The opinions expressed in the Hoover Digest are those of the authors and
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The Hoover Digest (ISSN 1088-5161) is published quarterly by the Hoover
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ON THE COVER
This poster is a scene of frozen action
and an admonition of its time. Cars in
the 1930s were getting faster, roads more
extensive, and national parks increasingly
popular. It was also a time of peoples
artuplifting yet practical messages
like this, paid for by the federal government. This image was part of a torrent of
posters, sculptures, murals, and other art
produced in the Depression. America paid
thousands of artists to work but at the
same time argued over the role of publicsupported art. See story, page 178.

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HOOVER
INSTITUTION
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Winter 2015
HOOVER D IG EST

T HE ECONOM Y
9

Sound Money, Sound Policy


These are the keys to restoring the Fed... and our economy.
By John B. Taylor.

13

A Better Start for Startups


New businesses drive productivityunless taxes and regulation strangle them. By Lee E. Ohanian and Edward Prescott.

16

Ouija-Board Economics
Even the best economic forecasts just arent very good at predicting growth, costs, or jobs. By Edward Paul Lazear.

IN EQUA LIT Y
19

The Problem with Equal Pay


A competitive labor market will make short work of pay gaps.
By Richard A. Epstein.

24

Not All Inequality Is Equal


Inequality does not equal stagnation. Even as differences in
income grow, entire nations may benefit. By Michael Spence.

HOOVER DIGEST WINTER 2015

IS L AM IS M
28

The Enemy Is Not Waiting


America is engaged in a clash not only of arms but of ideas,
according to a man who understands both kinds of combat.
By James Mattis.

36

Whitewashing the Jihadists


The US governments spin on Islamist violencethat the perpetrators arent Muslimsis both condescending and wrong.
By Peter Berkowitz.

41

Omens from the Seventh Century


The early caliphate so idealized by Islamists was no golden
age, but a time of instability and violence.
By Edward N. Luttwak.

51

Reign of Terrorists
The self-proclaimed Islamic State might fail as a caliphate but
succeed in promoting international terrorism.
By Mark Moyar.

HE A LT H CA R E
54

Take Care to Innovate


How ObamaCare threatens to ruin our leadership in research
and development. By Scott W. Atlas.

HOOVER DIGEST WINTER 2015

R EG U LAT ION
57

Congress vs. Cronyism


Unelected agencies engage entirely too often in sheer
influence peddling. Congress can fix that.
By Allan H. Meltzer.

CA L IFORNIA
61

Expensivebut Worth It?


California could be pricing itself right out of an economic
recovery. By Carson Bruno.

E DUCAT ION
65

Transforming Tomorrows Schools


The wheels of education reform grind exceedingly slow, but
they have ground out some progress. We need more.
By Chester E. Finn Jr.

69

Detention Dysfunction
The government wants to force a racial quota system onto
student punishment. This is an even worse idea than you
might suppose. By Michael J. Petrilli.

T HE E N VIR ONME NT
74

Climate Change Realism


If we cant stop climate change, can we adapt to it?
Lets find out. By Edward Paul Lazear.

79

The Fires Next Time


Drought, heat, bigger fires: forest management has to keep up.
By Terry L. Anderson and Daniel B. Botkin.

HOOVER DIGEST WINTER 2015

F OR E IGN P OL ICY
83

Hesitating, and Lost


The Obama administration inherited a Pax Americanaa
stable and largely peaceful global orderand then threw it
away. By Richard A. Epstein.

F OR E IGN A ID
87

Paved with Good Intentions


When insurgents sabotage it, American foreign aid can actually make violence and poverty worse. Hoover fellow Joseph
Felter explains. By Clifton B. Parker.

WAR FARE
92

From Drones to Zeppelins


Conventional forces will always be relevant, while dazzling
new weaponry may quickly become obsolete. By Andrew
Roberts.

R USS IA
98

Putin Is No Peacemaker
The United States should call out Putin for what he isand
make the world listen. By Yuri Yarim-Agaev.

HOOVER DIGEST WINTER 2015

103

Fire Putin
Memo to the Russian people: your great leader is actually a
great liability. By Paul R. Gregory.

C H IN A
109

China Rising
But what is it rising toward, and how fast? For American
leaders, the uncertainty itself poses a challenge.
By Amy B. Zegart.

IN T E RVIE W
117

Endangering Prosperity
Weve known for years that our schools are failing huge
numbers of students. Now, Hoover fellows Eric A. Hanushek
and Paul E. Peterson show how theyre failing the nation.
By Peter Robinson.

VA LU E S
126

An Officer and a Philosopher


The late Hoover fellow Joseph McNamara was a most
remarkable thing: a visionary police chief.
By Tunku Varadarajan.

131

In Nobodys Pocket
Poorly paid politicians are easily corrupted. Offering them
a competitive salary could be a price worth paying.
By Thomas Sowell.

T HE GRE AT WA R C E N T ENNI AL
135

Are We Reliving 1914?


There are disturbing parallelsand heartening differences.
By Niall Ferguson.

HOOVER DIGEST WINTER 2015

141

The Afterlives of Empires


World War I may have destroyed empires, but their internal
tensions lived on. Why todays little wars are the direct
descendants of the Great War. By Timothy Garton Ash.

145

Myths of the Great War


The statesmen of 1914 knew how terrible the conflict would
bebut they marched all the same. By Mark Harrison.

HISTORY A ND C ULT URE


151

The Bill of Wrongs


Visitors to the National Archives, please check your reverence
at the door. By Andrew Ferguson.

156

Rocket Man
Mission Control played Tchaikovsky, the countdown ended,
and then the huge Soviet rocket composed its own last
movementa fireball. A Cold War weapons designer recalls a
darkly comic memory. By Vitaly Leonidovich Katayev.

163

The Quiet Sea?


Calm may reign around the Mediterranean, but peace on
these historic shores is far from inevitable.
By Victor Davis Hanson.

HOOV E R A R C HIVE S
168

So Many Others Stood Silent


Jan Karski brought the Holocaust to the worlds attention and
fought to free Poland, his homeland. He also amassed historical treasure for the Hoover Archives. By Nicholas Siekierski.

178

On the Cover

HOOVER DIGEST WINTER 2015

T H E ECON OM Y

Sound Money,
Sound Policy
These are the keys to restoring
the Fed... and our economy.

By John B. Taylor

ound money and free markets go hand in hand. In 1776, Adam


Smith wrote of the importance of rules for a well-regulated paper
money in The Wealth of Nations. In 1962, Milton Friedman made
the chapter Control of Money, with its rationale for monetary
rules, a centerpiece of Capitalism and Freedom. In the 1980s, British Prime
Minister Margaret Thatcher and President Ronald Reagan made soundmoney principles a key part of their market-based reform platforms.
The reason is clear: economic crises and slow economic growth, as in the
Great Depression of the 1930s and the great inflation of the 1970s, could be
traced to deviations from sound, rules-based monetary policy. That commonsense finding still holds.
When monetary policy became more rules-based during the 1980s, 1990s,
and until recently, the economy improved and we got what economists call
the Great Moderation of strong economic growth with declining unemployment and inflation during those same years. When policy became more ad
hoc, interventionist, and discretionary during the past decade, the economy

John B. Taylor is the George P. Shultz Senior Fellow in Economics at the Hoover
Institution, the chair of Hoovers Working Group on Economic Policy and a member of Hoovers Shultz-Stephenson Task Force on Energy Policy, and the Mary and
Robert Raymond Professor of Economics at Stanford University.
H O O V E R D IG E S T W INTE R 2015

deteriorated and we got a financial crisis, a Great Recession, and a not-sogreat recovery.
So as Americans begin to diagnose the poor economic performance of
recent years and look for remedies that rely more on markets, they are again
looking to monetary reform. A welcome example is the Federal Reserve
Accountability and Transparency Act, recently passed in the House and sent
to the Senate.
Its first main section, Requirements for Policy Rules for the Fed, would
require that the Federal Reserve submit to Congress and the American
people a rule or strategy for how the Feds policy instrument, such as the
federal-funds rate, would change in a systematic way in response to changes
in inflation, real GDP, or other inputs. The bill was the subject of a hearing
on Capitol Hill last summer, and Fed Chair Janet Yellen was asked about its
requirements during her testimony to the
Senate Banking Committee.
According to the legislation, the Fed, not
Economic crises and
Congress, would choose the rule and how
slow growth can be
to describe it. But if the Fed deviated from
traced to deviations
its rule, then the chair of the Fed would
from sound, rules-based
have to testify before the appropriate
monetary policy.
congressional committees as to why the
[rule] is not in compliance. The rule would
have to be consistent with the setting of the actual federal-funds rate at the
time of the submission. The legislation also creates a transparent process for
accountability: the US comptroller general would be responsible for determining whether or not the Directive Policy Rule was in compliance with the
law and report its finding to Congress.
The legislation provides flexibility. It does not require that the Fed hold
any instrument of policy fixed, but rather that it make adjustments in a
systematic and predictable way. It allows the Fed to serve as lender of last
resort or take appropriate actions to provide liquidity in a crisis. Moreover,
the legislation even allows for the Fed to change its rule or deviate from it if
the Fed policy makers decide that is necessary. As stated in the act: Nothing in this Act shall be construed to require that the plans with respect to
the systematic quantitative adjustment of the Policy Instrument Target be
implemented if the Federal Open Market Committee determines that such
plans cannot or should not be achieved due to changing market conditions.
But upon determining that plans . . . cannot or should not be achieved, the

10

H O O VER DI GEST WI N TER 201 5

Federal Open Market Committee shall submit an explanation for that determination and an updated version of the Directive Policy Rule.
In the interests of clarity, the legislation also specifies a Reference Policy
Rule, to which the Fed must compare its policy rule. The Reference Policy
Rule, to quote from the legislation, means a calculation of the nominal Federal funds rate as equal to the sum of the following: (A) The rate of inflation
over the previous four quarters. (B) One-half of the percentage deviation of
the real GDP from an estimate of potential GDP. (C) One-half of the difference between the rate of inflation over the previous four quarters and two
[percent]. (D) Two [percent].
In monetary and financial circles this rule is known as the Taylor rule
because of a proposal I made in 1992, and researchers routinely compare any
policy rule they are considering to this rule. It is thus a straightforward task
for the Fed. Many at the Fed already
make such comparisons, including Fed
Chair Janet Yellen.
Theres nothing partisan
Some will object to the legislation,
about rules-based
including some at the Fed. But there
monetary policy.
is nothing partisan about rules-based
monetary policy, and there is a clear
precedent for congressional oversight. The Federal Reserve Act previously
required that the Fed report the ranges for the future growth of the money
supply, but these requirements were removed from the law in 2000. The
proposed legislation fills that void.
Some will say that the legislation would destroy central-bank independence. But since the Fed chooses its own rule, its independence is maintained. The purpose of the act is to prevent the damaging departures from
rules-based policy, which central-bank independence obviously has not
prevented.
Based on writings, speeches, and publicly released transcripts of meetings, we know that many at the Fed favor a more rules-based policy. Constructive comments from the Fed would undoubtedly improve the legislation,
but if it were passed into law as is, economic performance would improve
greatly.
The Federal Reserve Accountability and Transparency Act limits discretion and excessive intervention by our independent central bank, as
its name implies, in a transparent and accountable way. It thereby meets
Milton Friedmans goal of legislating rules for the conduct of monetary

H O O V E R D IG E S T W INTER 2015

11

policy that will have the effect of enabling the public to exercise control over
monetary policy through its political authorities, while at the same time . . .
prevent[ing] monetary policy from being subject to the day-by-day whim of
political authorities.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.

Available from the Hoover Institution Press


is The Road Ahead for the Fed,
edited by John B. Taylor and John D. Ciorciari.
To order, call 800.888.4741
or visit www.hooverpress.org.

12

H O O VER DI GEST WI N TER 201 5

T H E ECON OM Y

A Better Start
for Startups
New businesses drive productivity
unless taxes and regulation strangle them.

By Lee E. Ohanian and Edward Prescott

n the first quarter of 2014, GDP in the United States plunged at a 2.9
percent annual rate, and productivitythe inflation-adjusted business
output per hour workeddeclined at a 3.5 percent annual rate. This
was the worst productivity statistic since 1990. And productivity since
2005 has declined by more than 8 percent relative to its long-run trend. This
means that business output is nearly $1 trillion less today than what it would
be had productivity continued to grow at its average rate of about 2.5 percent
per year.
Lagging productivity growth is an enormous problem because virtually
all the increase in Americans standard of living is made possible by rising
worker productivity. In our view, an important factor contributing to declining productivity growth is the large decline in the creation of new businesses.
The creation rate of new businesses, as well as new plants built by existing
firms, was about 30 percent lower in 2011 (the most recent year of data)
compared with the annual average rate for the 1980s. (The data are derived
Lee E. Ohanian, a senior fellow at the Hoover Institution, is a professor of economics and director of the Robert Ettinger Family Program in Macroeconomic
Research at the University of California, Los Angeles. Edward Prescott is a professor of economics and director of the Center for the Advanced Study in Economic
Efficiency at Arizona State University. He was awarded the Nobel Memorial Prize
in Economic Sciences in 2004.
H O O V E R D IG E S T W INTE R 2015

13

PICK ME, PICK ME: Entrants in the LeWeb Startup Competition gather
on stage last October in Paris. Like such competitions elsewhere, LeWeb
presents an opportunity for would-be entrepreneurs to vie for funding
and attention. [ Frederic de Villamil / LeWeb / Creative Commons]

from the Census Bureaus Business Dynamic Statistics.) The decline affected
nearly all business sectors.
Virtually every state has suffered a drop in startups, which suggests that
this is a national, not a regional or state, problem. It may not be surprising that
states hit hard by the recession, such as Arizona, California, and Nevada, have
a 25 percent to 35 percent lower rate of startups. But the startup rate in such
business-friendly states as Tennessee, Texas, and Utah is also down substantially, and in some cases exceeds the declines in the states that suffered most
during the recession. Even North Dakota, which has benefited enormously
from oil and gas fracking, has a startup rate lower than in the 1980s.
These numbers are likely to underestimate the decline in new business
formation, because they do not count changes in the pace of new ideas and
new business activity in existing establishments. The fact that the economy
has been weak since 2007 suggests that new business activity has also
declined in existing companies.
New businesses are critical for the US economy to grow because a small
fraction of todays startups will become tomorrows economic heavyweights.
Most of todays workers are employed at older, established businesses, but the
country cannot rely on existing companies to boost the economy. Businesses
have a life cycle, in which even the largest and most successful reach a stage at
which they stop expanding.
If history is any indication, many of todays economic heavyweights will
ultimately decline as new businesses take their place. Research by the
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H O O VER DI GEST WI N TER 201 5

Kaufman Foundation shows that only about half of the 1995 Fortune 500
firms remained on the list in 2010.
Startups also have declined in high technology. John Haltiwanger of the
University of Maryland reports that there are fewer startups in high technology and information-processing since 2000, as well as fewer high-growth
startupsannual employment growth of more than 25 percentacross all
sectors. Even more troubling is that the smaller number of high-growth
startups is not growing as quickly as in the past.
Surveys of small-business owners clearly indicate that changes in economic policy are required to reverse this trend. Chamber of Commerce surveys
show that roughly 80 percent of small-business owners believe that the US
economy is on the wrong track and that Washington is a major problem. Surveys by John Dearie and Courtney Geduldig, authors of Where the Jobs Are:
Entrepreneurship and the Soul of the American Economy, show that entrepreneurs report being hamstrung by difficulties in finding skilled workers, by a
complex tax code that penalizes small business, by regulations that raise the
costs of doing business, and by difficulties in obtaining financing that have
worsened since 2008.
There are clear solutions to these problems. Immigration reform that
increases the pool of skilled workers and potential new entrepreneurs. Tax
reform that reduces and equalizes marginal tax rates on capital income, including reducing the corporate income tax, which currently exceeds 40 percent in
some states. Reforming Dodd-Frank to make it easier and cheaper for small
business to obtain loans. Reducing the regulatory burden on all businesses.
In the absence of these reforms, there is little reason to believe that the
depressed rate of new business creation will reverse itself. And if the trend
is not reversed, then the current shortfall of $1 trillion per year in lost output
due to lost productivity will continue.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.

Available from the Hoover Institution Press is


Government Policies and the Delayed Economic
Recovery, edited by Lee E. Ohanian, John B. Taylor, and
Ian J. Wright. To order, call 800.888.4741 or visit www.
hooverpress.org.

H O O V E R D IG E S T W INTER 2015

15

T H E ECONOMY

Ouija-Board
Economics
Even the best economic forecasts
just arent very good at
predicting growth, costs, or jobs.

By Edward Paul Lazear

overnment economic forecasts receive a great deal of attention


and are used to make a case for or against legislation or public
policies. How good are the forecasts? The answer: not very. Forecasting is an inexact science at best, and the trust that Congress
and the public invest in these estimates is not warranted.
The Congressional Budget Office and a group simply known as Troika
the administrations Council of Economic Advisers, Office of Management
and Budget, and Treasury Departmentput out annual economic forecasts.
As chairman of the Council of Economic Advisers from 20069, I headed
Troika. The agencies are staffed by capable and cautious career economists
who do not claim that their forecasts are accurate, only that they are unbiased. Unfortunately, these caveats often fall on deaf ears.
The CBO and administration (through Troika) put out annual forecasts
on economic variables including the gross domestic product, unemployment rates, inflation, and interest rates. Real GDP growth is perhaps most

Edward Paul Lazear is the Morris Arnold and Nona Jean Cox Senior Fellow at
the Hoover Institution, co-chair of Hoovers Conte Initiative on Immigration Reform, and the Jack Steele Parker Professor of Human Resources Management and
Economics at Stanford Universitys Graduate School of Business.
16

H O O VER DI GEST WI N TER 201 5

important for a variety of reasons, not the least of which is estimating how
economic growth will affect government revenues and program costs. Yet the
forecasting error by the CBO and the administration is very large.
My analysis of 19992013 reveals that the CBOs real GDP growth forecasts for the next year were off, on average, by 1.7 percentage points, either
too high or low. Administration forecasts were similarly off by a slightly
larger 1.8 percentage points on average, also too high or too low. Given that
the average growth rate during this period was only 2.1 percent, errors of this
magnitude are substantial.
Perhaps most damning: history is a better predictor of annual growth
than government forecasts. Simply assuming that GDP growth will be 3.1
percent in each yearthe average annual
rate for the thirty years that precede the
In 2007, the CBO
study periodresults in an average foreestimated that in
cast error of 1.5 percentage points.
Troika is associated with a presidential
2013 the food stamp
administration, while the CBO is generprogram would cost
ally regarded as a nonpartisan agency
under $40 billion.
that serves Congress. The CBO estimates
The actual cost?
might be the least political, and although
More than $83 billion.
the CBO and Troika do not differ much in
their average forecast error, administration forecasts over the entire period studied tend to be higher by 0.7 percentage points than those of the CBO.
The CBO is also charged with estimating the costs of proposed legislation.
As with GDP, and despite its professionalism, the task is daunting and the
numbers should be read with caution. Large transfer programs and taxchange legislation provide important examples.
The food stamp program, which dates to 1939, became the Supplemental
Nutrition Assistance Program (SNAP) in 2008. In 2007, the CBO estimated
that in 2013 SNAP would cost under $40 billion. The actual cost was more
than $83 billion. The CBO failed to anticipate the effect of the severe recession. Yet even in 2009, during the recession, the CBO underestimated 2013
costs by more than 20 percent.
Sometimes the CBO overestimates cost. In 2003, the CBO estimated that
the new Medicare Part D program would cost around $100 billion by 2013;
actual spending was $50 billion. The CBO significantly overestimated how
many seniors would enroll and the market-based plans cost less than estimated because of the competition that Part D enabled.

H O O V E R D IG E S T W INTER 2015

17

The estimated costs of the Affordable Care Act are also sensitive to enrollment because participation affects costs and nonparticipation affects penalties collected. Changes in estimates from year to year can be large. The 2012
and 2013 CBO estimates of the 2015 budgetary impact of the ACA differ by 35
percent, or about $30 billion.
Occasionally, these cost estimates receive unwarranted credence because
their methodology is obscure. One good example involves the American
Recovery and Reinvestment Act of 2009, a.k.a. the stimulus.
In 2009, before the American Recovery and Reinvestment Act passed,
the CBO forecast the effect of the $840 billion stimulus plan on GDP over the
next few years. In 2014 the CBO issued a report stating that GDP increased
by almost exactly the amount it had projected. Was the CBOs forecast that
good? No, the CBO simply used almost the same modelnot actual datato
estimate the effect of the stimulus in 2014 as it had in 2009.
The same approach is used to forecast jobs created or saved by the
stimulus. Government economists generally assume a mechanical link
between forecast GDP growth and forecast job growth. This means that
estimating job effects is subject to the same qualification as estimated GDP
effects. Both are based on models, not actual experience. The CBO described
the methodology in its report, but those who reported or trumpeted the
CBOs stimulus numbers were generally unaware of how GDP or jobs numbers were generated.
Forecasting is inherently difficult and almost always inaccurate. When
basing decisions on forecasts, even those issued by government agencies, it is
important to remember that there may be less than meets the eye.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.

New from the Hoover Institution Press is


Across the Great Divide: New Perspectives on
the Financial Crisis, edited by Martin Neil Baily
and John B. Taylor. To order, call 800.888.4741
or visit www.hooverpress.org.

18

H O O VER DI GEST WI N TER 201 5

I N EQUA LI T Y

The Problem
with Equal Pay
A competitive labor market
will make short work of pay gaps.

By Richard A. Epstein

n event dubbed Equal Pay Day is meant to draw attention to how


a woman who works full time earns 77 cents for every dollar a
man earns, as President Obama has put it. Though a detailed
analysis (The Disappearing Gender Wage Gap, by the National
Center for Policy Analysis, June 2012) reveals that the claim of a systematic
pay gap is spurious, the president wants to enact reforms to decrease the socalled inequality in the labor markets.
His political advisers clearly are calculating that his brand of economic
populism might help achieve two ends. First, it might divert attention from
the still-unpopular rollout of the Affordable Care Act. Second, it might rally
female voters around the Democrats by putting Republicans in the uncomfortable position of waging a war against women.
But a dubious economic agenda drives our populist president, whose plans
to further regulate the economy will harm the economic prospects of women
and men alike.

Richard A. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover
Institution and a member of the steering committee for Hoovers Working Group
on Intellectual Property, Innovation, and Prosperity. He is also the Laurence A.
Tisch Professor of Law at New York University Law School and a senior lecturer
at the University of Chicago.
H O O V E R D IG E S T W INTE R 2015

19

MYRIAD VARIABLES
The initial mistake, of course, comes with the presidents perception of
economic inequality in labor markets. Obama states that a woman earns less
than a man even when shes in the same profession and has the same education. In so doing, he pays no respect to the principles of supply and demand,
which bring the two sides of the market into balance. Those forces make it
highly unlikely that a system with so many informed parties would be as seriously out of balance as he claims it is.
Nor does the empirical evidence support the presidents claim that women
make less, once efforts are made to control for other variables that influence
the outcome. His double use of the word same ignores the wide variations
within any given job category, and equally wide variations in the education
that men and women bring to their work, both within and across the two
sexes. For instance, a definition of the
medical profession that lumps together
pediatricians and neurosurgeons misses
In single-earner families,
huge differences in training and skills. The
husbands and wives
marketplace accurately reflects the higher
have jointly decided
returns to certain kinds of work relative to
that specialization
others, and thus gives strong and accuwill advance the
rate signals on how both men and women
familys well-being.
should invest in their educations.
Without exception, more-sophisticated
studies that seek to control for some of these differences narrow the perceived 77 percent gap. But they do not eliminate it entirely. One common
inference is that the persistence of that measurement gap is indicative of
some lurking discrimination between the sexes throughout labor markets.
Not likely. A far better explanation is that these statistical studies cannot
incorporate into their regressions each relevant variable that matters to a
skilled manager or recruiter, even after controlling for hours worked or, most
critically, years out of the workforce. Such issues as a willingness to travel,
working overtime in dangerous neighborhoods, making cold calls to prospective customers, handling risk, or responding to hostility in interpersonal
relations are likely to be relevant in how much an employee is paid.
The effect of any one of these variables could be small, but in aggregate,
they really matter. Yet they are too numerous and too difficult to quantify, to
be incorporated into the statistical models that predict unequal pay. So it is
just wrong to assume that any unmeasured variation should be attributed to
some undocumented form of discrimination.

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H O O VER DI GEST WI N TER 201 5

There is also the key role of marriage. Married woman often cut back on
their labor-market participation to become the primary family caregiver.
It is easy to praise, as Frank Bruni did in a recent New York Times op-ed,
the heroic efforts of individual women to balance the demands of home
and workplace. But it is much more important to understand the economic
dynamics.
These decisions are not made in isolation. They are made jointly by husbands and wives who think that this form of specialization will advance the
familys well-being of which income is only one part.
Defenders of equal pay often draw the wrong inference from this indisputable labor-market asymmetry by claiming that womens contribution in
the home goes unrecognized. Not so, especially when the market value of
these services is added back to market wages to get a more comprehensive
measure of womens productivity where it will systematically
reduce the perceived wage gap.
Labor markets are intensely
At that point, the total economic
competitive, yet the claim
contribution of married women
about systematic pay gaps
with children will creep up, and
assumes that competitive
could well approach the income
markets are somehow
of single women, who make about
massively inefficient.
96 percent of the income of men.
The claim that women are
playing against a stacked deck is wrong for still other reasons. Labor markets are intensely competitive, so the claim about systematic pay gaps has to
assume both that female managers are hostile to womens economic welfare
and that competitive markets are massively inefficient in matching people
with positions. Competition for labor tends to lead to efficient outcomes.
Indeed, by the standard account, price discrimination cannot survive in
competitive markets, which means that the differentials in wages track differences in performance. Put simply, one danger of the Equal Pay Act is that
it could mandate equal wages for unequal work, that is, for two workers with
different productivity.
The claim of systematic discrimination in labor markets also ignores the
large number of self-employed women who run their own businesses. Once
again, specialization reigns. Women are more likely to work in areas of family
and interpersonal relations than in construction or hedge-fund management.
It is dangerous to disregard this persistent pattern of revealed preferences
in the belief that the president, or indeed any outsider, knows whats best for

H O O V E R D IG E S T W INTER 2015

21

individual men and women. Specialization by occupation and within occupations is a good thing and increases gains from trade.
Finally, note two important measures of the overall success of women.
They now constitute close to 60 percent of college enrollees and represent
an ever-growing fraction of students with advanced degrees. Women also
weathered the past recession better than men, whether measured by profession, age, or level of education. There are also many affirmative-action and
diversity programs that give women a leg up in the workplace. No major
structural flaws exist that government regulation can fix. And there are
always powerful social forces that target perceived areas of injustice.
UNINTENDED CONSEQUENCES
Our false preoccupation with pay equity is not costless, for it leads to bad
labor-market regulations that hurt all workers. Employment relationships
will form and endure only when the gains from the deal exceed the costs of
putting it together. Every time a government regulation imposes some new
restriction on the contracting parties, it increases the costs of the deal and
reduces the benefits it generates, thereby killing jobs for men and women
alike.
Of course, the long-term prospects in labor markets are grim for todays
young adults, the millennial generation. But indignant editorials in the New
York Times urging more government action wont help. These major losses
are not just random events: they are driven by unfortunate regulatory choices. The Age Discrimination in Employment Act protects employed workers
older than forty. How can that not hurt the generation behind them? The
community-rating requirements under the Affordable Care Act force young
people to subsidize their elders. Large transfer payments via Social Security
and Medicare do the same. No wonder the economic prospects of millennials
are worse than those of their parents.
The nonstop effort to turn todays minimum wage into a living wage has
the same effect, especially when the president justifies this initiative in the
name of gender equity. His executive order requiring federal contractors to
pay all workers a minimum of $10.10 is, on average, supposed to raise the pay
of women in the bottom quartile by 93 cents an hour, and that of men by only
60 cents. But that ignores the obvious risk that a higher fraction of these
vulnerable women are more likely to lose their jobs, given the greater labormarket distortions.

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H O O VER DI GEST WI N TER 201 5

MEN, WOMEN, AND FAMILIES


One common theme the president raises is that his proposals are good not
only for women but also for American families and the economy as a whole.
Of course, he is right to say that when women succeed, America succeeds.
Any overall improvement in labor productivity reverberates across the
economy. But the president is blind to the difference between the rising tide
that raises all ships, and the dam that makes water flow into one channel
and not the other. Market transactions raise all ships by improving levels of
productivity. The presidents regulations shrink the pie in the effort to give
women a larger share of what remains. But that strategy never works.
Increased pay for women is always a blessingall other things being
equal. But that improvement takes on a different hue when it comes at the
expense of an overall decline in the income and economic prospects for men.
Right now, the president can act only by executive order. But he is actively
agitating for the now-stymied Paycheck Fairness Act, which would introduce
pay equity on a grand scale for all private firms. It is a prescription for the
destruction of labor markets. We have revved up enforcement of labor-market regulation in the past generation just as the prospects of millennials have
tanked. Why double down on failure?
H

Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2014 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.
Available from the Hoover Institution Press is
The Case against the Employee Free Choice Act,
by Richard A. Epstein. To order, call 800.888.4741
or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

23

I N EQUAL I TY

Not All Inequality


Is Equal
Inequality does not equal stagnation.
Even as differences in income grow,
entire nations may benefit.

By Michael Spence

ising income and wealth inequality in many countries around the


world has been a long-term trend for three decades or more. But
the attention devoted to this trend has increased substantially
since the 2008 financial crisis: with slow growth, rising inequality
bites harder.
The old theory about inequality was that redistribution via the tax
system weakened incentives and undermined economic growth. But the
relationship between inequality and growth is far more complex and multidimensional than this simple trade-off suggests. Multiple channels of influence
and feedback mechanisms make definitive conclusions difficult.
For example, the United States and China are the fastest-growing major
economies today. Both have similarly high and rising levels of income inequality. Though one should not conclude from this that growth and inequality
are either unrelated or positively correlated, the unqualified statement that
inequality is bad for growth does not really accord with the facts.

Michael Spence is a senior fellow at the Hoover Institution, a professor of economics at New York Universitys Stern School of Business, and the Philip H. Knight
Professor Emeritus of Management in the Graduate School of Business at Stanford
University. He was awarded the Nobel Memorial Prize in Economic Sciences in 2001.

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H O O VER DI GEST WI N TER 201 5

Moreover, in global terms, inequality has been falling as developing countries prospereven though it is increasing within many developed and
developing countries. This may seem counterintuitive, but it makes sense. The
dominant trend in the global economy is the convergence process that began
after World War II. A substantial share of the 85 percent of the worlds population living in developing countries experienced sustained rapid real growth for
the first time. This global trend overwhelms that of rising domestic inequality.
Nonetheless, experience in a wide range of countries suggests that
high and rising levels of inequality, especially inequality of opportunity,
can indeed be detrimental to growth. One reason is that inequality undercuts the political and social consensus around growth-oriented strategies
and policies. It can lead to gridlock, conflict, or poor policy choices. The
evidence supports the view that the systematic exclusion of subgroups on
any arbitrary basis (for example, ethnicity, race, or religion) is particularly
damaging in this respect.
Intergenerational mobility is a key indicator of equality of opportunity.
Rising inequality of outcomes need
not lead to reduced intergeneraIn a meritocratic environment,
tional mobility. Whether it does
depends heavily on whether impor- outcomes based on
tant instruments that support
creativity, innovation,
equality of opportunity, principally
or extraordinary talent are
education and health care, are
usually viewed benignly.
universally accessible. For example,
if public education systems start to
fail, they are often replaced at the upper end of the income distribution by a
private system, with adverse consequences for intergenerational mobility.
There are other links between inequality and growth. High levels of
income and wealth inequality (as in much of South America and parts of
Africa) often lead to and reinforce unequal political influence. Rather than
seeking to generate inclusive patterns of growth, policy makers seek to
protect the wealth and rent-capturing advantage of the rich. Generally, this
has meant less openness to trade and investment flows, because they lead to
unwanted external competition.
This suggests that not all inequality (of outcomes) should be viewed in the
same way. Inequality based on successful rent seeking and privileged access
to resources and market opportunities is highly toxic with respect to social
cohesion and stabilityand hence growth-oriented policies. In a generally
meritocratic environment, outcomes based on creativity, innovation, or

H O O V E R D IG E S T W INTER 2015

25

BOOMING: Maggie Cheng, secretary general of the China Entrepreneur


Club, speaks at a meeting last spring with British trade and investment
officials in London. China and the United States are the fastest-growing
major economies today, and both have similarly high and rising levels of
income inequality. [China Entrepreneur Club / Creative Commons]

extraordinary talent are usually viewed benignly and believed to have far less
damaging effects.
That is partly why Chinas current anti-corruption campaign, for example, is so important. It is not so much Chinas relatively high income inequality but the social tension created by insiders privileged access to markets
and transactions that threatens the Chinese Communist Partys legitimacy
and the effectiveness of its governance.
In the United States, how much of the increase in income inequality over
the past three decades reflects technological change and globalization (both
favoring those with higher levels of education and skills) and how much
reflects privileged access to the policy-making process is a complex and
unsettled question. But it is important to ask, for two reasons.
First, the policy responses are different; second, the effects on social cohesion and the social contracts credibility are also different.
Rapid growth helps. In a high-growth environment, with rising incomes
for almost everyone, people will accept rising inequality up to a point, par-

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H O O VER DI GEST WI N TER 201 5

ticularly if it occurs in a context that is substantially meritocratic. But in a


low-growth (or, worse, negative growth) environment, rapidly rising inequality means that many people are experiencing no income growth or are losing
ground in absolute as well as relative terms.
The consequences of rising income inequality can tempt policy makers
down a dangerous path: the use of debt, sometimes combined with an asset
bubble, to sustain consumption. This arguably occurred in the 1920s, before
the Great Depression; it certainly occurred in the United States (and Spain
and the United Kingdom) in the decade before the 2008 crisis.
A variant, seen in Europe, is the use of government borrowing to fill a
demand and employment gap created by deficient private domestic and
external demand. To the extent that the latter is associated with productivity and competitiveness problems and exacerbated by the common currency,
this is an inappropriate policy response.
Similar concerns have been raised about the rapid increase in debt ratios
in China. Perhaps debt seems like the path of least resistance in dealing with
the effects of inequality or slow growth. But there are better and worse ways
to deal with rising inequality. Leverage is one of the worst.
So where does that leave us? For me, the high-priority items are fairly
clear. In the short run, the top priority is income support for the poor and
the unemployed, who are the immediate victims of crises and the underlying imbalances and structural problems, which take time to remove. Second,
especially with rising income inequality, universal access to high-quality
public services, particularly education, is crucial.
Inclusion sustains social and political cohesionand hence the very growth
needed to help mitigate the effects of rising inequality. There are many ways
for economies to fall short of their growth potential, but underinvestment,
especially within the public sector, is one of the most potent and common.
H

Reprinted by permission of Project Syndicate (www.project-syndicate.org).


2014 Project Syndicate Inc. All rights reserved.
Available from the Hoover Institution Press is
The New Deal and Modern American Conservatism:
A Defining Rivalry, by Gordon Lloyd and
David Davenport. To order, call 800.888.4741
or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

27

I S LAMI S M

The Enemy
Is Not Waiting
America is engaged in a clash not only of arms
but of ideas, according to a man who understands
both kinds of combat.

By James Mattis

In the following testimony before the House Intelligence Committee, Marine General James Mattis (Ret.), a Hoover visiting fellow, outlined the threat posed by the
organization that calls itself the Islamic State and recalled
the long gestation of Islamist terrorism.

Key points

ISIS is a more

Chairman Rogers, ranking member


powerful threat
Ruppersberger, members of the committee:
than Al-Qaeda.
Thank you for inviting me to testify on the nature
The right US
of the threat posed by Islamic State terrorists. Please
strategy demands
a clear objective.
allow me to once again express my appreciation for
this committees integrity and my respect for your
Nothing should
be off the table.
leadership in safeguarding our country. From my time
on active duty to today, I have only the highest regard
for this committees role.
The current maturation of the Islamic State, or ISIS (known in earlier
forms as AQI or ISIL or IS), and its demonstrated penchant for barbarity are
General James Mattis (USMC, Retired) is an Annenberg Distinguished Visiting
Fellow at the Hoover Institution and a member of Hoovers Working Group on the
Role of Military History in Contemporary Conflict. His final assignment was commanding general of the US Central Command.
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H O O VER DI GEST WI N TER 201 5

well known to this committee and need no elaboration here. A review of their
origins is helpful to place the current threat in context as we look at what
must be done about this clear and present danger.
We all recognize that the Mideast is dissolving into crises, and we know
terrorism did not start with 9/11. Two fundamental strains of violent Islamic
jihadists pre-existed 9/11 and provide the backdrop for what is manifesting
now. Both are dressed in false religious garb.
First are the violent Shia-inspired movements supported by Iran. We
know them as Irans Lebanese Hezbollah militia and associated groups. In
the early 1980s they commenced war on us when they attacked our Beirut
embassy, killing 63 people, and also attacked the French paratrooper and US
Marine peacekeeper barracks then in the city. They continue their murderous and destabilizing legacy: fighting to keep Bashar Assad in power in Syria;
murdering Israeli tourists in Bulgaria;
trying to murder the Saudi ambassador to
Nothing can replace
Washington a few short miles from where
we sit today. They continue to spread
American leadership in
mayhem.
bringing the interested
The other strain of terrorism declared
parties together.
war on us in the mid-1990s, and is well
known to this committee as Al-Qaeda
(AQ) and its associated violent Sunni movements. Having attacked our east
African embassies and the USS Cole in a neutral port, the dramatic events
of 9/11 earned them a strong US response. We have shredded much of their
senior leadership in the Afghanistan-Pakistan border region, yet the movement has franchised: Al-Qaeda in the Arabian Peninsula (AQAP) in Yemen;
Al-Shabaab in Somalia; Al-Nusra in Syria; and Boko Haram in the Maghreb,
to name several.
Out of this franchising effect has arisen ISIS in Syria and Iraq. In 2010
Iraq was in a post-combat, pre-reconciliation phase, with then-AQI [Al-Qaeda in Iraq] unable to sustain their intended level of violence that they hoped
would spawn a Sunni-Shia civil war. Prime Minister Nouri al-Maliki, released
from American restraint, acted on his worst instincts, creating enormous
distrust in Iraqs Kurdish population and deeply embittering Sunnis in western Iraqs Al-Anbar, who lost any confidence in a Baghdad government they
saw as adversarial. The reformed but still nascent Iraqi army was purged by
Maliki of its effective leadership as he jury-rigged the command structure,
undercutting what had been the growing effectiveness of that force. In AlAnbar, Al-Qaeda began its growth into todays ISIS.

H O O V E R D IG E S T W INTER 2015

29

30 JonesFor the Hoover Digest]


[Taylor

H O O VER DI GEST WI N TER 201 5

Meanwhile, in neighboring Syria, Assad created a civil war against his


own people, heavily targeting the Sunnis. Abetted by Russias regrettable
veto in the United Nations and sustained by Irans full support, Assads war
created a cycle of violence that led to the expanded rise of ISIS, ideologically similar but operationally distant from Al-Qaeda. The growth of ISIS
illustrated the usual adaptations of terror groups. By winnowing its ranks,
sharpening its ideology, and adapting its methods, ISIS morphed into a much
more robust threat. Combining Al-Qaedas significant fighting capabilities
with a stronger focus on the administrative capabilities that might permit it
to hold ground, ISIS copied the latter from Hezbollahs model. Basically ISIS
is a combined Al-Qaeda and Lebanese Hezbollah on steroidsdestabilizing
the region, dissolving borders and changing the political geography in the
Mideast, and hardening political positions that make Mideast peace-building
more remote by the day.
Gaining strength as they draw to their banner the most hardened and
disaffected violent Sunni radicals, todays ISIS holds ground in a continuation and significant maturation of the modern violent jihadist terror war that
began against us in 1983. In 1984 thenSecretary of State George Shultz noted that the violence was no longer random, and he rejected any moral confusion when it came to Americas special responsibility to firm resistance
against terrorism. Today ISIS represents a threat to governance across the
Middle East and a threat that extends far beyond that tumultuous region.
Having dealt with the mutating threat of terrorism since 1979, I believe that,
left unfettered, its only a matter of time before ISIS launches transnational
operations. We should approach their threat in this manner and determine
how to take away their initiative.
FRIENDS MATTER
The enemy is not waiting. I understand and appreciate the desire to pull us
out of the poorly explained Mideast fights weve engaged in. But as we say
in the military, the enemy gets a vote. We must now change what weve been
doing, challenging or validating our assumptions about this threat, determining our political objectives, and building a fully resourced strategy in concert with allies. Potential allies exist in the region and around the globe, but
nothing can replace American leadership in bringing the interested parties
together.
Friends matter in todays globalized worldjust as they have always
mattered. Alliances and coalitions are high priorities when we confront
todays challenge: we need to embrace those who reject terrorism, working

H O O V E R D IG E S T W INTER 2015

31

PREPARED: Thenlieutenant general James Mattis talks with maintenance crews of the Marine All-Weather Fighter Attack Squadron 121
at Al-Asad, Iraq, in 2007. Last fall, Mattis told members of Congress,
I understand and appreciate the desire to pull us out of the poorly
explained Mideast fights weve engaged in. But as we say in the
military, the enemy gets a vote. [Department of Defense]

with allies even when they are not perfect because our friends stood by us
when we fell short of perfection. When the United Arab Emirates stands tall
condemning ISIS and its atrocities [and how it] aims to kill, terrorize, and
displace civilians, we hear our own thoughts in their blunt words.
So long as we demonstrate firm reliability, there are many allies hoping
for our leadership, both in the region and around the world. Secretary of
State John Kerrys efforts to build international support for this campaign
are on target, for we are in an era of frequent skirmishing. By era I mean
that this will be a long-term effort involving fighting alongside our partners;
it will not be solved with humanitarian airdrops to the surviving victims of
ISIS barbarism. Additionally, forecasting the amount of time we will commit to this effort is unwise, giving hope to our foes that they can outlast us.
Saying that these maniacs are on the wrong side of history also will not stop
them, for history is written by good people and bad. If history teaches us any32

H O O VER DI GEST WI N TER 201 5

thing and we want to leave a better world for the next generation, we learn
that we must stand with those who share our security interests. Throughout
history it has been nations with allies that defeated those without.
Today in ISIS we see again those who thinklike those on 9/11that they
can scare us by hurting us. While we didnt ask for this fight, we must again
show that we dont scare and we wont abandon our friends. By their very
barbarity ISIS has created a strong motivation for a wide range of countries
to move against themif America will lead. The barbarism of ISIS is a vulnerability worth exploiting to the maximum degree possible.
The strategy we choose must no longer deal with each emerging Mideast
threat as a one-offthere is no single vexing threat to be dealt with as an
immediate, stand-alone problem. Nowhere is the impression of American
withdrawal more pronounced than in the Mideast. To counter that impression and take necessary steps before our enemies grow stronger, we need
an integrated regional strategy that avoids unintended consequences that
come from dealing with individual problems without regard for their regional
context. In league with our allies (those who find their purpose in moderate
policies and being responsive to the needs of their people), we must build a
politically unambiguous, guiding vision. That starts with a policy that provides clarity: objectively and persuasively laying out to the American people
and the global audience what we stand for, but also what we will not tolerate
toward innocent people, either our own or others. Recognizing that in the
Mideast today vacuums are not filled by tolerant elements, we must stand
with those opposed to terrorism.
While we recognize that we may have previously confused and even
dismayed our friends, or unintentionally emboldened enemies sworn to our
destruction, we must now accept that the international order promoting
peace and prosperity is not self-sustaining. We must choose sidesstanding
with those willing to fight what President Obama rightly called a cancer,
and outlining our approach using clear strategic objectives.
A ROBUST AND COHERENT STRATEGY
ISIS, born of regional warfare and violent religious extremism, has grown
into a strategic threat. Occupying an area as large as Great Britain with millions of inhabitants, its hold is not yet firm. Even as ISIS tries to strike ever
more deeply into Iraq, Syria, and Lebanon, their intent is clearly to set up a
safe haven in the Mideastlike the Federally Administered Tribal Areas on
the Pakistan-Afghanistan borderfor direct destabilization of the region and
for use as a launching pad for transnational attacks. We must not patronize

H O O V E R D IG E S T W INTER 2015

33

them or dismiss the threat their words and actions clearly proclaim, even if
they cannot yet carry out their more grandiose pronouncements.
A robust and coherent strategy to shatter the enemys designs must
start with our comprehending their irreconcilable worldview. In confronting that reality and rigorously defining our political objectives, we will enlist
allies and avoid mission creep, recognizing the limits of what outsiders can
do while strengthening our friends who live in that area. As Doctor Nadia
Schadlow has advocated, we must use all means to carry out our strategy,
one that does not rely solely on military activities to fight what is at heart
a violent political argument against the values that for us grew out of the
Enlightenment.
With regard to the immediate threat of ISIS, the critical first step to
restarting the Iraqi political process was supporting the removal of Maliki
as prime minister. Using American airpower to buy time is also necessary as
the Iraqis get their political and military act together and we align international support.
The strategy that follows must define with
carefully chosen words where we intend to go
We may not wish to
in this campaign: degrading or defeating or
destroying ISIS, for example, portend differreassure our enemies
ent endgames that demand different levels of
in advance that they
will not see American effortand thus different strategies.
Whichever strategy we choose, we should be
boots on the ground.
reticent in telling our adversaries in advance
any timeline that governs us, or which of our
capabilities we will not employ. Specifically, if this threat to our nation is
as significant as I believe it is, we may not wish to reassure our enemies in
advance that they will not see American boots on the ground. If a brigade of our paratroopers or a battalion landing team of our Marines could
strengthen our allies at a key juncture and create havoc or humiliation for
our adversaries, then we should do what is necessary with forces that exist
for that very purpose. The US military is not war-weary; our military draws
strength from confronting our enemies when clear policy objectives are set
and we are fully resourced for the fight.
Properly used, a mix of our troops can help set the conditions for the
regional forces that can carry the bulk of the fighting on the ground. Halfhearted or tentative efforts, or air strikes alone, can backfire on us and actually strengthen our foes credibility, reinforcing his recruiting efforts, which
are already strong. I do not necessarily advocate American ground forces at
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H O O VER DI GEST WI N TER 201 5

this point, but we should never reassure our enemy that our commander-inchief would not commit them at the time and place of his choosing. When we
act, it should be unequivocal, designed to end the fight as swiftly as possible.
No one is more reluctant to see us again in combat than those of us who have
signed letters to the next of kin of our fallen. But if something is worth fighting for, we must bring full strength to bear.
When one side resorts to barbarity against our fellow Americans and
tears up the rulebook about protection of the innocent, then the moral choice
is obvious. The only questions lie in our wise choice of a coalition strategy
and full resourcing by America if we want the same commitment by our
allies. As British Prime Minister David Cameron has said, true security will
only be achieved if we use all our resources.
Without firm action this poison will spread. The geography of the globalized world does not permit us to look away as if this is not our problem.
Geopolitical realities must be confronted, and the enemy of our enemy may
still remain our enemy, so the construction of an integrated Mideast strategy
to include confronting ISIS will not be simple. But that is now our duty to
ourselves and to the world that our children will inherit.
Without exaggerating the ISIS threat, we must bring objective purpose
and strong heart to this fight to determine which values will govern our
future. With both the power to inspire as well as to intimidate, America
should now bring both to bear with firm leadership and robust resources.
Vacillation or tentative American moves absent an integrated regional
strategy will not work to sustain the civilized international order in the face
of barbarians. Delay can only cost us as the enemy grows stronger. Failure to
act multi-dimensionally, decisively, and in concert with allies can only leave
us vulnerable to future enemy attacks.
H

These remarks were delivered September 18, 2014,


before the House Intelligence Committee.
New from the Hoover Institution Press is
Iraq after America: Strongmen, Sectarians,
Resistance, by Joel Rayburn. To order, call
800.888.4741 or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

35

I S LAMI S M

Whitewashing
the Jihadists
The US governments spin on Islamist violence
that the perpetrators arent Muslims
is both condescending and wrong.

By Peter Berkowitz

peecheseven or especially when they are intended to obscure


the truthreveal something of the convictions of the speech giver
and clarify his opinions about the character of his audience. So it
was with President Obamas special address to the nation from the
White House on September 10, announcing military operations to degrade
and ultimately destroy the savage jihadists seeking to reestablish a caliphate in Iraq and Syria.
At the very moment he was summoning the nations support for the most
recent battle in the long war Islamism has waged against the United States
and her allies, the president insulted the peoples intelligence and demonstrated disdain for our capacity for self-government.
Presuming to understand Islam better than those who are undertaking
jihad in its name, Obama declared ISIL is not Islamic. The reason he gave
for this remarkable assertion is that No religion condones the killing of innocents, and the vast majority of ISILs victims have been Muslim.

Peter Berkowitz is the Tad and Dianne Taube Senior Fellow


at the Hoover Institution, chair of Hoovers Jean Perkins Task Force
on National Security and Law, and a member of Hoovers working groups
on military history and foreign policy.
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H O O VER DI GEST WI N TER 201 5

The presidents reasoning is either tautological or false. It is tautological


if the president meant that no religion condones the killing of individuals
whether of the same or another religionit regards as innocent. It is false if
the president meant that no religion condones killing individuals whom our
moralitythe morality that underlies liberal democracyregards as innocent.
Liberal democracies draw a sharp distinction, for example, between
combatantsmen and women who serve in the armed forcesand noncombatants. Many jihadists, however, regard all citizens of Western liberal
democracies, whether or not they wear military uniforms and take up arms,
as enemies of Islam and therefore fair game for maiming and killing. For support the jihadists can cite an impressive array of fatwas, or legal rulings of
Islamic jurists.
Moreover, contrary to President Obamas assertion, the fact that the vast
majority of ISILs victims have been Muslims proves nothing about ISILs
Muslim credentials, just as the slaying of Protestants by Catholics and
Many jihadists regard all
Catholics by Protestants during the
seventeenth-century European wars of
citizens of Western liberal
religion did not alter that the combatdemocracies, in uniform
ants who bathed the continent in blood
or not, as enemies of
were Christians. Indeed, if the killing
Islam and therefore fair
of Muslims established that one did not
game.
really practice Islam, it would follow
that the large swaths of Sunnis and
Shias who have waged religious war against each other for more than a millennium and a half do not qualify as Muslims.
What then caused the president to speak so foolishly?
One possibility is that Obama doesnt take religion seriously. We know,
however, that cant be right because of the acclaimed speech on the complexities of race and religion that he gave in March 2008 as he battled Hillary
Clinton for their partys presidential nomination.
After it had been revealed that the Reverend Jeremiah Wright, the spiritual leader of Trinity United Church of Christ in Chicago (which Obama regularly attended for two decades), had repeatedly voiced vehement contempt
for America and its promise of freedom and equality, then-Senator Obama
faced the delicate task of condemning Wrights most egregious opinions while
showing sympathy for the circumstances that generated them and admiration for the man who uttered them.

H O O V E R D IG E S T W INTER 2015

37

Obama rose to the occasion. In a speech at the National Constitution


Center in Philadelphia, he spoke eloquently of the ambiguities of the black
experience in America; of predominantly black churches ministry to the
full range of black Americans material and spiritual needs; and of his own
Christian faith being nurtured by Wright. Trinity United, Obama acknowledged, had many faces. It encompassed in full the kindness and cruelty, the
fierce intelligence and the shocking ignorance, the struggles and successes,
the love and, yes, the bitterness and bias that make up the black experience
in America.
In simultaneously vindicating and distancing himself from Trinity United,
Obama made a point of explicitly rejecting Wrights vulgar contention that
the conflicts in the Middle East are rooted primarily in the actions of stalwart allies like Israel. Rather, argued Obama, much of the violence engulfing
the Middle East arose from the perverse and hateful ideologies of radical
A president determined
Islam.
to lead the people rather
His 2008 speech indicates that Obama
takes
seriously the capacity of religion
than coddle them would
to uplift human beings, the complexities
not hide the warrior
of actual religious life, and the dangers
teachings inscribed in
posed by radical Islam. A second explaIslam.
nation of his surreal assertion that ISIL
is not Islamic is therefore necessary.
Perhaps he doesnt really take Islam seriously.
We know that cant be so because only fifteen months after his Philadelphia speech and less than half a year after his inauguration, Obama delivered
a much-ballyhooed speech in Cairo. The speech was not addressed to Egyptians or even to Arab nations but to the Muslim world as a whole. Although
it does not contain even a single mention of jihad, Islamists, or radical
Islam, Obamas Cairo speech does recognize, up to a point, Islams internal
struggles and certain gaps between Western ways and the ways of many who
practice Islam.
In reaching out in a spirit of conciliation to the Muslim world, Obama
understandably highlighted the contributions Islam has made to civilization.
Less understandably, he primarily blamed the tensions between the United
States and the Muslim world on the West: colonialism, the Cold War, modernization, and globalization.
These tensions, Obama observed, have been exploited by a small number
of extremists. While America would pursue those who engage in violence

38

H O O VER DI GEST WI N TER 201 5

against civilians, it would never, the president emphatically stated, make


war on Islam.
But in making the valid distinction five years ago between Islam and
Muslim extremists, the president committed the same error that he made in
September at the White House. America stands with true Muslims against
false Muslims, the president averred in Cairo, because we reject the same
thing that people of all faiths reject: the killing of innocent men, women, and
children. As if the jihadists believe that those whom they decry as heretics,
infidels, and apostates are innocent.
In Cairo, the president also recognized that reality is more complicated.
He rightly called for greater democracy, tolerance, and protection of womens
rights in the Muslim world. His gently phrased admonitions both suggested
that Islam harbors tendencies that conflict with the principles of liberal
democracy and affirmed that the Islamic tradition has moral resources that
can be brought to bear to condemn the violence perpetrated by Islamists and
to embrace the principles of liberal democracy.
But does the president believe his own admonitions? Why, five years after
the Cairo speechwith the Middle East from Libya to Iran rocked by a surging Islamism, and with an Islamist threat mounting in Europe, the United
States, and Australia (in September, Australian counterterrorism forces
detained 15 suspects in connection to an alleged ISIL plot to commit public
beheadings in Sydney and Brisbane)does he insist on sugarcoating matters?
A third possibility to explain the presidents bizarre insistence that
Muslim extremists are not Muslim is that while he takes religion and Islam
seriously, he doesnt take seriously his responsibility to treat the American
people like adults and inform us about the true nature of the threats we face.
A president who was determined to lead the people rather than coddle
them would, for example, not hide the warrior teachings that are inscribed
in Islam. He would not whitewash the Islamic teaching that divides the world
into the house of peace (Dar al-Islam), which is under the rule of Islam, and
the house of war (Dar al-Harb), which comprises the rest of the world. He
would not obscure the comprehensive character of Islamic religious law, or
Sharia, which seeks to regulate all aspects of life and demands to be realized
in politics. He would not conceal the Islamic principle that where Islam once
ruled it must always rulea principle that, among other things, converts
Israel into an irreparably illegitimate country and renders all Israelis, including noncombatant women and children, legitimate targets. And, accordingly,
he would not declare that ISIL is not Islamic.

H O O V E R D IG E S T W INTER 2015

39

To be sure, Islam puts forward qualifications to, and alternative interpretations of, all of these dangerous doctrines. But the president, apparently,
prefers we believe that the one and only true Islam preaches peace exactly as
we in the West understand it.
That is a multicultural fairy tale.
The president has been right in his speeches to stress that America
respects the achievements of Islam, seeks to live in peace with peace-loving
Muslims, and is devoted to protecting the rights of Muslim Americans no
less vigorously than the rights of all other Americans.
But the president should also show respect for the American people and
their capacity for self-government by accurately explaining the Islamist
threat. Perhaps the exigencies of realpolitik make it difficult for a US president to state clearly that jihadists take their cue from Islamic authorities and
that radical Islam is a radicalization of Islam. Certainly, President Obamas
predecessor didnt do this, either. By failing to find the wherewithal to
address Americans like grown-ups about the war the Islamists are waging
against us and our allies, the leader of the free world hinders our capacity to
prevail.
H

Reprinted by permission of Real Clear Politics. 2014 RealClearPolitics.


All rights reserved.
New from the Hoover Institution Press is
In this Arab Time: The Pursuit of Deliverance,
by Fouad Ajami. To order, call 800.888.4741
or visit www.hooverpress.org.

40

H O O VER DI GEST WI N TER 201 5

I SLA M I SM

Omens from the


Seventh Century
The early caliphate so idealized
by Islamists was no golden age, but
a time of instability and violence.

By Edward N. Luttwak

hen modern Muslims invoke the Khilafathe caliphate


as their ideal of governance for the Ummah, the planetary
community of all Muslims, and indeed for all humans
once converted or killed if stubbornly pagan, they do not
refer to the famous caliphates of history: the splendiferous Umayyad, the
longer-lasting Abbasid extinguished by the Mongols in 1258, the Egyptbased and tolerant Fatimid in between, or the Ottoman that lingered till
1924, let alone the extant Ahmadiyya caliphate that most condemn as
heretical.
Instead they wax lyrical about the rule of Muhammads first four rightly
guided successors, Al-Khulafa ur-Rashidunwho followed one another after
his death in 632. Unable to assume Muhammads prophetic role, his bestplaced followers Abu Bakr as-Siddiq, Umar (or Omar) ibn al-Khattab, and
Uthman ibn Affan, took control of his movement in that sequence as his successors, Khulafaa, whence their governance became known as the succession or Khilafa, our caliphate.

Edward N. Luttwak is a member of the Hoover Institution's Working Group on


the Role of Military History in Contemporary Conflict and a senior associate
at the Center for Strategic and International Studies.
H O O V E R D IG E S T W INTE R 2015

41

Muhammad had left no son to claim the leadership by inheritance, female


succession was undreamed of, and son-in-law Ali ibn Abi Talib, married to
daughter Fatimah, was subordinated by the first three to become only the
fourth caliphnot good enough for the dynastic-minded loyalists of the
prophets household. That started a deadly quarrel that the party of Ali,
Shiatu Ali, abbreviated as the familiar Shia, still pursues very vigorously
evoking accusations of heresy by the more severe of their Sunni opponents,
the followers of the Sunnah or traditional path of the Muslim majority in all
countries but Iran and Iraq.
In greatly celebrating the Rashidun, as modern Muslims afflicted by
the contemporary travails of the Muslim world are wont to do, the violent
instability of the institution is disregarded, no doubt because what is celebrated are mostly its colossal victories over the infidels who torment them
still.
OUT OF ARABIA
Within a year of Muhammads death in
Muhammads religion
632, his erstwhile companions and selfpromised victory and
appointed successors led their Muslim
loot above all, and the
followers on plunder raids into Byzantine
advancing Muslim riding
Syria and Sassanian Mesopotamia that
were so successful that they were directly
out of Arabia saw those
followed by conquering and missionary
promises triumphantly
expeditions. Muhammads religion had
validated.
promised victory and loot above all, and
the advancing Muslim riding out of Arabia
saw those promises triumphantly validated by the seemingly miraculous
defeat of the vast, ancient, and till then all-powerful Roman and Sassanian
empires, which between them had long dominated all the lands of the Middle
East fertile enough to be worth ruling.
The two empires had just finished the longest and most destructive of all their warsalmost thirty years of wide-ranging reciprocal
raids and outright invasions. It started in 602 and ruined many of their
cities, destroyed commerce, emptied their treasuries, exhausted their
manpower, and wrecked frontier defenses and field armies alike, while
bitterly antagonizing their provincial populations, left undefended to
be despoiled by enemy looters yet harshly taxed before and after. A few
years of tranquillity might have restored the strength of both empires
beyond any challenge by Arab raiders no matter how enthusiastic,

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H O O VER DI GEST WI N TER 201 5

but instead both were invaded and each suffered a catastrophic battle
defeat.
In August 636, just four years after Muhammads death, the army of the
emperor and erstwhile great conqueror Herakleios was utterly defeated at
the River Yarmuk. The Roman empire that had possessed Syria, Egypt, and
all the lands between them for six centuries would lose every part of them
within a decade.
In that same year (636), the annus mirabilis of Islamic conquest, the Sassanian empire of Persia, whose power had till very recently stretched from
the Mediterranean to the Indus Valley, was also decisively defeated, at AlQadisiyyah in Mesopotamia, immediately losing its treasury and capital city,
Ctesiphon. After a last attempt to defend the Persian hinterland at the battle
of Nihawand in 642, commanded by the king of kings Yazdegerd III himself,
resistance and the Sassanian empire
with it waned, ending by 651.
One can readily see how the most
The immense victories
hardened cynics among the Arabians
of those earliest years
would have been won over to intense
are still the mainspring
faith by these utterly unexpected,
of Islams triumphalism,
indeed wildly improbable victories,
contrasting so sharply
which were soon followed by further
with the turn-the-otherwaves of conquest that brought the
cheek spirit of most other
raiders and missionaries of Islam right
across northern Africa all the way
faiths.
to the Atlantic, and as far east as the
eastern edges of Central Asia adjacent to Tang China, and into the Indus Valley. Indeed the immense victories of those earliest years are still the mainspring of Islams triumphalism, contrasting so sharply with the turn-theother-cheek spirit of most other faiths and generating the most acute inner
tensions given the military inferiority of Muslims in almost all wars of recent
centuriesat the hands of Christians, Jews, and unprotected infidels whom
Islam condemns to perpetual martial inferiority. That glaring contradiction
inevitably raises terrible inner doubts that in turn foment the most violent
emotions, amplified in the case of the Jews because of their (post-Quranic)
denigration as weaklings.
UNDER THE BLACK FLAG
The Umayyad, Abbasid, Fatimid, and Ottoman caliphates were all very
different in many ways, from their geographic centers, in Damascus, Bagh-

H O O V E R D IG E S T W INTER 2015

43

dad, Cairo, and Istanbul respectively, to their prevailing ethosthough in


that regard the Fatimid was more sharply different, because it was the only
Shia caliphate, and moreover its faith was Sevener Shiism. Like the more
familiar Twelvers of Iran and Iraq, it starts with the party of Ali, whose line
is perpetuated by infallible imams, the last of whom is still alive in occultation
waiting his moment to emerge to redeem the world. But unlike the Twelvers,
whose imam is Muhammad ibn Hasan al-Mahdi (the guide), born in 868
and still alivevast crowds periodically implore him to emerge from the
well at Jamkaranthe Seveners recognize the same succession only up to
the sixth imam, then insert their own final and immortal imam Muhammad
ibn Ismail. Hence they are often known as Ismailis; they are also known for

44

H O O VER DI GEST WI N TER 201 5

H O O V E R D IG E S T W INTER 2015

[Taylor JonesFor the Hoover Digest ]


45

their contemporary moderation, in sharp contrast to the Ismaili Nizari state


founded in 1090 in Alamut in northwest Iran, whose conventional warfare
over two centuries was augmented by dedicated assassins.
The Fatimids, like the Umayyad, Abbasid, and Ottoman caliphates, had
their times of prosperity and achievement, both warlike and peaceful, not
least in the cultural sphere in their time of success and liberality that ended
for the Abbasid and Ottoman caliphates when decline induced the spread of
an obscurantist orthodoxy that in some ways is unshaken till now.
Nevertheless, for all the martial and civil glories of the Umayyad, Fatimid,
Abbasid, and Ottoman in their best days, the so-called Islamic State of the
new caliph, Abu Bakr al-Baghdadi, who thus renamed his Islamic State of
Iraq and the Levant, again disregards the later caliphates to seek its inspiration from the first four caliphates of the rightly guided, the Rashidun. Like
them, Baghdadi aspires to rule the entire Ummah of all Muslim-majority
countries and also beyond them, for in
accordance to mainstream interpretations
of Islamic law, any land once ruled by MusMuhammad tamed
lims must forever be Islamic regardless of
the tribes of Arabia to
the prevailing religion of its current inhabwondrous effect, but their
itants. Hence the black flags of the Islamic
allegiance was given only State lately seen in Berlin, Paris, and Lonto his person, not to his
don demonstrations alternatively featured
the Shahada, the declaration of faith, and
movement and its
maps that also enclosed Spain (the erstsuccessive leaders.
while Andalus) and most of once Mughal
When he died, tribalism
India as well as the Balkans. Sicilians have
emerged again.
yet to protest their omission from the map
in spite of two centuries of Arab rule.
It is a matter of the highest contemporary relevance that the instability
of the first Rashidun caliphates that counterpointed their huge conquests
was radical and not merely contingent. What afflicted them is bound to
afflict Abu Bakr al-Baghdadis Islamic State as well. It all started with
Muhammads charismatic leadership. He had tamed the tribes of Arabia to
wondrous effect, but their allegiance was given only to his person, and not
to his movement and its eventual successive leaders. Hence upon Muhammads death an organic tribalism emerged again, in natural opposition to
any unitary leadership.
Moreover, as with any ideology, differences in interpretation within Islam
generated differences in doctrine, which tended to be sharpened as con46

H O O VER DI GEST WI N TER 201 5

troversies unfolded, and given that only one doctrine could be right and all
others had to be wrong, there was ideological secessionism in addition to the
tribal variety. In our own days, the Jabhat an-Nusrah li-Ahl ash-Sham, the
support front of the people of Greater Syria of Abu Mohammad al-Jawlani,
might seem the acme of extremismthe instant execution of any captured
Shia for aggravated heresy is one of its milder doctrinesbut to Abu Bakr
al-Baghdadi, Jabhat an-Nusrahs failure to adhere to his Islamic State is itself
un-Islamic, making a traitor out of Jawlani.
In due course, no doubt, the new caliph Baghdadi and his Islamic State
will be outdone in turn by another group that will somehow contrive to be
more extreme.
A MYTH OF SERENITY
And it all started with the Rashidun, in sharp contrast to their mythic status
as benign and serene rulers.
The first caliph, Abu Bakr as-Siddiq (632634), had to fight tribal
secessionism throughout his short reign
to impose his rule, in a struggle that was
In due course, the new
further intensified by the opposition of
caliph and his Islamic
Fatimahs partisans. They wanted the
State will be outdone by
leadership for her husband, Ali ibn Abi
another group that will
Talib, but there was also a bitter property dispute over the date-palm orchards somehow contrive to be
of Fardak in the oasis of Khaibar, some
more extreme.
ninety miles north of Medina, supposedly gifted to Fatimah after they were
seized from their Jewish cultivators by Muhammads warriors in 629
(just yesterday for some: on July 20, 2014, Parisian demonstrators against
Israel shouted remember Khaibar outside the Val dOise synagogue in
Sarcelles).
According to Sunni tradition, the wise and restrained Abu Bakr resisted
the temptation of unleashing his more numerous followers against Ali or
Fatimah, who in the Sunni version died of grief at her fathers death. But
according to Shia tradition, Fatimah died of wounds sustained in a raid on
her house led by the second of the righteous ones, a prelude to the killing
of her sons Hasan and Hussein by agents of Muawiyah bin Abi Sufyan,
founder of the Umayyad caliphate, and the greatest criminal in history
according to the Shia. Every year the Shia commemorate Husseins killing
in 680 with tearful lamentations and bloody cuttings and self-flagellations
H O O V E R D IG E S T W INTER 2015

47

with bladed chains that leave streets running with blood on Ashura, the
tenth day of the month of Muharram, when non-Shia in those parts are
enjoined to stay indoors.
Abu Bakr died of illness, a privilege denied to his successors among the
Rashidun, each one of whom was assassinated, except for the third caliph,
who was lynched in his own home. His successor, Umar ibn al-Khattab (634
644), better known as Omar the conqueror of Jerusalem (and much else),
also had to fight against the Shia partisans of the prophets household, along
with chronic tribal secessions that were only partly moderated by the spiritual and material rewards of Umars great victories and vast conquests, for
the prospect of loot both unites in battle and divides in victory, when it must
be shared out. However great the spoils, there are always unsatisfied victors
who would rebel till suppressed. In the end it was not a tribal or a partisan
of Ali who killed Umar, but rather a resentful Persian, the former Sassanian
soldier Piruz Nahavandi, captured in the epic defeat of Al-Qadisiyyah.
The third caliph, Uthman ibn Affan (644656), under whose authority the
written text of the Quran was redacted, faced unending riots and rebellions
until he was finally lynched by victorious rebels in his own house in Medina.
The fourth caliphand Muhammads son-in-lawAli ibn Abi Talib
(656661), was outmaneuvered by Muawiyah bin Abi Sufyan, war leader
in Syria and founder of the Umayyad dynasty, though it was an extremist
of the Kharijite sect who assassinated Ali. That was an early example of
the ideological violence that compounded tribal secessionism. Like their
modern counterparts of Abu Bakr al-Baghdadis Islamic State, the Kharijites demanded unending war against all non-Muslims, denounced all who
disagreed as apostates, and fiercely opposed all dynastic rulers.
In that at least they were faithfully echoing the Quran, which promotes
the equality of all believers, and is thus implicitly inimical to hereditary
succession. Indeed the Quran is explicitly hostile to pharaohs and kings. Yet
within thirty years of Muhammads death, the fifth caliph, Muawiyah bin Abi
Sufyan (661680), arranged the succession of his son Yazid I, thereby starting
what would become the Umayyad dynasty, condemned by many Sunni jurists
and all Shia, but far more constructively stable than the rule of the Rashidun, for all their sensational victories.
In that, too, there is an exact contemporary parallel: as of this writing, the
benighted dynasts who rule the emirates of the Gulf, Jordan, Kuwait, Morocco, Qatar, and Saudi Arabia are still firmly in power, while the modernizing
rulers of Egypt, Libya, Syria, and Tunisia were all swept away by the mass
action of the Arab Spring. It therefore seems that if Abu Bakr al-Baghdadi
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H O O VER DI GEST WI N TER 201 5

THE SUCCESSORS? A militant loyal to the Islamic State in Iraq and the
Levant waves a black flag in Raqqa, Syria, last June. The offshoot of AlQaeda has called on factions worldwide to pledge their allegiance to it.
[Reuters / Newscom]

wants to make his new caliphate stick, he will need to appoint a crown prince
who can succeed himthereby no doubt evoking the emergence of that more
extreme competitor.
H

Subscribe to the Hoover Institutions online journal Strategika (http://


www.hoover.org/taskforces/military-history/strategika), where this essay
first appeared. 2014 by the Board of Trustees of the Leland Stanford
Junior University. All rights reserved.

New from the Hoover Institution Press is


Reflections on the Revolution in Egypt,
by Samuel Tadros. To order, call 800.888.4741
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50

H O O VER DI GEST WI N TER 201 5

I SLA M I SM

Reign of
Terrorists
The self-proclaimed Islamic State
might fail as a caliphate but succeed
in promoting international terrorism.

By Mark Moyar

y declaring the Islamic State a global caliphate, Iraqi cleric Abu


Bakr al-Baghdadi has tapped into the universalist and utopian
aspirations of Sunni extremists around the world. Moreover,
the military successes of the Islamic Statealso known as ISIS
or ISILhave offered hope to those who are desperate for a winner after
defeats in such countries as Iraq, Afghanistan, Pakistan, Mali, Somalia, and
Yemen. Its victories have also endowed the aspiring caliphate with material
riches, including oil and American military equipment.
While self-designation as a caliphate has distinguished the Islamic State
from other Islamist utopian projects, the nature of the undertaking and its
challenges have several recent precedents. During the past two decades, the
Afghan Taliban and Al-Qaeda affiliates in Somalia, Yemen, and Mali occupied
territory and established local governments. In each case, they were undone
by a combination of draconian governance and strategic overreach. The
Islamic State is at risk of sinking for the same reasons.

Mark Moyar is a member of the Hoover Institutions Working Group on the Role
of Military History in Contemporary Conflict. He is a senior fellow at the Joint
Special Operations University.
H O O V E R D IG E S T W INTE R 2015

51

In each of the prior failures, the Islamist utopians alienated locals by


imposing severe punishments for relatively minor violations of Islamic law
while failing to provide inducements such as effective governmental services.
Consequently, they limited their bases of support and made enemies who
subsequently helped foreign powers overthrow them.
The Islamic State has learned from these experiences. In both Syria and
Iraq, it has cut back on cruel punishments, shifting emphasis to educating
the people on Islamic law. It has allocated funding and manpower to electricity, trash collection, and other services. Accusations of overzealousness in
meting out punishment have, however, continued, and therefore the problem
is likely to persist to some degree.
In most of the recent cases, foreign powers did not take action against
the Islamist utopians when they first gained control over territory. Only
when the movements attempted to wield
power beyond their central strongholds
did foreigners intervene. In the case of
Islamic States territory
Afghanistan, Al-Qaedas organization of the
offers enormous oppor9/11 attacks on Afghan territory caused the
tunities for organizing
United States to drive out the Taliban. In
terrorist actions and
Somalia, the Islamic Courts Union invited
training foreigners whose an Ethiopian invasion in 2006 when it tried
passports give them easy to move beyond its initial conquests to
access to the West.
overrun the Ethiopian-backed exile government. Four years later, after Al-Shabaab
had taken control over much of Somalia, Al-Shabaabs bombings of civilian targets in Kampala provoked a Ugandan intervention. Al-Qaeda in the
Islamic Maghreb established control over northern Mali in 2012, but then lost
it the next year when its offensive into southern Mali precipitated French
military intervention.
Ideology and the expectations of admirers predispose the Islamic State
to pursue territorial expansion. It has already attempted to move beyond its
initial Sunni Arab strongholds in Iraq to the countrys predominantly Shiite
and Kurdish areas. The United States, Turkey, Iran, and other powers have
helped the Shiites and Kurds to the extent required to avert total defeat. If
the Islamic State is able to overrun the Shiites and Kurds, one or more foreign powers might well organize a large counteroffensive.
Hence, the Islamic State will be most likely to survive if it limits its ambitions in the near team. Given its modification of governance in response to
past failures, chances are good that it is also mindful of repeating the error

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H O O VER DI GEST WI N TER 201 5

of overreach. Even a restrained approach, though, carries risks that foreign


powers will enable Iraqi or Syrian security forces to vanquish the Islamic
State.
The Islamic States prospects for gaining broad acceptance across the
Sunni Muslim world are low. Since the abolition of the Ottoman caliphate in
1924, repeated efforts to resuscitate the institution have foundered on tribal,
ethnic, national, and ideological schisms. Mainstream Muslim scholars,
intellectuals, and political leaders have denounced Baghdadi and his brand of
Salafist Islam as heretical, and so have some from other extremist organizations, including Al-Qaeda.
Conceivably, the respect that the Islamic State amasses through military
victories and sheer survival could, in combination with concerted efforts to
include non-Salafist Muslims, attract individuals of high repute within Sunni
Islam. Given ethnic and national divisions, however, it is doubtful that such
individuals would enjoy wide popularity beyond Syria and Iraq. Whatever
political and cultural influence the Islamic State wields in the future, therefore, will most probably be limited to the sections of Syria and Iraq where its
gunmen hold sway.
Whatever its limitations, the Islamic State could serve as an enduring
platform for international terrorism. Its territory offers enormous opportunities for organizing terrorist actions and training foreigners whose passports
give them easy access to the West. With the United States having slashed its
military and forsworn stability operations, the Islamic States sponsorship or
facilitation of terrorist attacks would not necessarily lead to its demise.
H

Subscribe to the Hoover Institutions online journal Strategika


(http://www.hoover.org/taskforces/military-history/strategika),
where this essay first appeared. 2014 by the Board of Trustees of the
Leland Stanford Junior University. All rights reserved.
New from the Hoover Institution Press is
The Consequences of Syria, by Lee Smith.
To order, call 800.888.4741
or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

53

H EALTH CARE

Take Care
to Innovate
How ObamaCare threatens to ruin our
leadership in research and development.

By Scott W. Atlas

f the many unintended consequences of the Affordable Care Act,


perhaps the least noticed is its threat to innovation. Although
most discussions center on the laws more immediate effects on
hiring, insurance rates, and access to doctors and care, attention
should also be paid to its impact on US research and development and health
care technology.
The overwhelming majority of the worlds health care innovation occurs in
the United States. This includes groundbreaking drug treatments, surgical
procedures, medical devices, patents, diagnostics, and much more. Most of
the funding for that innovationabout 71 percent of US R&D investment
comes from private industry. A recent R&D Magazine survey of industry
leaders in sixty-three countries ranked the United States number one in the
world for health care innovation.
But that environment is changing. According to R&D Magazine and the
research firm Battelle, growth of R&D spending in the United States from
2012 to 2014 averaged just 2.1 percent, down from an average of 6 percent
over the previous fifteen years. In that same fifteen-year period, Malaysia,
Thailand, Singapore, South Korea, India, and the European Union saw faster

Scott W. Atlas, MD, is the David and Joan Traitel Senior Fellow at the Hoover
Institution.
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H O O VER DI GEST WI N TER 201 5

R&D spending growth than the United States. Chinas grew on average 22
percent per year.
The recent slowdown in R&D spending in the United States is in part
caused by weak economic growth since the 2008 financial crisis. But the
economys weakness itself has been exacerbated by the negative impact of
new taxes and regulations under ObamaCare. According to Congressional
Budget Office estimates, the new health care law will levy more than $500
billion in new taxes over its first ten years to help pay for insurance subsidies
and Medicaid expansion. These new
taxes include significant levies on
Delays of approvals for new
key health care industries, such as
medical devices are now far
manufacturers of medical devices
longer in the United States
and drugs, and their investors.
As a result, small and large US
than in many other
health care technology companies are developed countries.
moving R&D centers and jobs overseas. The CEO of one of the largest health care companies in America recently
told me that the device tax his company paid last year exceeded his companys
entire R&D budget. Already a long list of companiesincluding Boston Scientific, Stryker, and Cook Medicalhave announced job cuts and plans to open
new centers for R&D, manufacturing, and clinical trials overseas.
The bureaucrats at the Food and Drug Administration are also hindering
development of medical technology and drugs. According to a 2010 survey
of more than two hundred medical-device companies by medical professor
and entrepreneur Josh Makower and his colleagues at Stanford University,
delays of approvals for new medical devices are now far longer in the United
States than in many other developed countries. In the European Union
not exactly known for cutting through red tapeit takes on average seven
months to gain approval for low- to moderate-risk devices. In the United
States, FDA approval for similar devices takes on average thirty-one months.
The 2011 PricewaterhouseCoopers Medical Technology Innovation Scorecard found that the gap between innovation leaders and emerging economies is rapidly narrowing and that although the United States will hold its
lead, the country will continue to lose ground during the next decade. It goes
on to say that China, India, and Brazil will experience the strongest gains
during the next ten years.
Since the signing of the Affordable Care Act in 2010, private-equity investment in new US health care startups has also diminished. Annual capital
investment has decreased to $41 billion in 2013 from $61 billion in 2011, accord-

H O O V E R D IG E S T W INTER 2015

55

ing to quarterly reports by the accounting and audit firm McGladrey LLP.
Similarly, the Silicon Valleybased law firm Wilson Sonsini Goodrich & Rosati
reported in its semiannual Life Sciences Reports decreases from the first half
of 2010 through the second half of 2013 in deal closings and capital raised for
startups in biopharmaceuticals, medical devices and equipment, and diagnostics, with only a slight uptick in health information systems investment.
Meanwhile, many of the best and brightest who come to the United States
to study science, technology, engineering, and maththe STEM subjects
that are so crucial to innovationare choosing to return to their home countries upon graduation. In 2008, a survey conducted by Vivek Wadhwa and
his team of researchers at Duke, Harvard, and the University of California
found that only 6 percent of Indian, 10 percent of Chinese, and 15 percent of
European students expected to make America their permanent home. Much
of this is Congresss fault. Lawmakers have been slow to increase limits on
H-1B visas for high-skill foreign workers. Pressure has been brought to bear
on Congress to take action, but it may be too late for an increase in the visas
to have much effect in health care, given the decline in R&D spending that
would make use of their talents.
What can be done to reverse these damaging trends? First, strip back the
heavy tax burdens that inhibit innovation, starting with repealing the Affordable Care Acts $29 billion medical-device excise tax and the $80 billion tax
on brand-name drugs. Change the tax code to add incentives for investment
in early-stage medical technology and life-science companies, as well as for
philanthropic gifts to academic institutions that promote tech entrepreneurs.
And finally, simplify processes for new device and drug approvals, so that
the FDA becomes a favorable rather than an obstructionist environment for
these life-saving and cost-saving discoveries. Its a tall order, especially in
todays Washington. But Americas healthand wealthdepend on it.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.
Available from the Hoover Institution Press is
In Excellent Health: Setting the Record Straight
on Americas Health Care, by Scott W. Atlas.
To order, call 800.888.4741
or visit www.hooverpress.org.

56

H O O VER DI GEST WI N TER 201 5

R EG ULAT I ON

Congress
vs. Cronyism
Unelected agencies engage entirely too often in
sheer influence peddling. Congress can fix that.

By Allan H. Meltzer

ost of us learned in grade school that the Constitution parcels legislative, executive, and judicial power into separate
branches of the government. This separation of powersthe
system of checks and balancesis to prevent tyranny and
ensure that all citizens enjoy equal protection under the law. How true are
these time-honored precepts today? Unfortunately, as some colleagues at the
Hoover Institutions initiative on regulation and the rule of law are finding,
the answer is less and less.
With regard to presidential power, the Constitution is explicit: Congress is
authorized to make laws, and the president must execute them. The Constitution does not authorize the executive branch to change the laws or decline
to enforce them for its own convenience.
Yet President Obama has waived the requirements of laws such as the
Affordable Care Act and some laws on immigrationeffectively rewriting
them. This practice is constitutionally dangerous: unless it is checked, there
is not much short of impeachment to prevent a future president from issuing
his own laws by reinterpreting existing laws.

Allan H. Meltzer is the director of the Hoover Institutions Regulation and


the Rule of Law Initiative, a distinguished visiting fellow at Hoover, and the
University Professor of Political Economy at Carnegie Mellon University.
H O O V E R D IG E S T W INTE R 2015

57

The Supreme Court has been loath to prevent the president from going
beyond his authorized responsibility. But last year Speaker John Boehner led
the House to pass a resolution authorizing a lawsuit challenging the presidents
actions on the grounds that his actions
infringe on Congresss legislative power.
The Constitution doesnt
Lawsuits aside, Congress has other
ways to protect the rule of law. Article III
authorize the executive
of the Constitution authorizes Congress
branch to change laws or
to make rules for the judiciary. It can
decline to enforce them
and shoulddirectly change the scope of
for its own convenience.
standing to permit courts to restrain the
president from rewriting laws.
That would be a good start, but more is needed. The power of federal
regulatory agencies to issue rules, enforce them, and penalize violators is also
subject to abuse. Congress itself created this problem long ago by writing
broad, vague general laws and letting regulatory agencies fill in the details. It
continues to do so.

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H O O VER DI GEST WI N TER 201 5

This arrangement is tailor-made for influence-peddling and cronyism.


Lobbyists and other special-interest groups negotiate the rules with unelected bureaucracies. Inevitably, those with pull get favorable treatment. Larger
firms can impose disadvantages on competitors; smaller firms that cannot
afford to participate in the process lose. Regulators, in short, are too easily
captured by the industries and companies they are supposed to regulate.
And they have much weaker incentives to act in the best interest of firms
than do these firms principal stockholders.
Here is one example. After the financial crisis of 2008, bank regulators
should have increased bank capital requirements enough to provide managers with stronger incentives to avoid high-risk loans and investments. Instead
regulators are more directly attempting to monitor and manage financial risktaking. This arrangement raises the possibility of gaming the system.
Another example: the Dodd-Frank Act of 2010 was passed in part to
eliminate bank bailouts brought about by banks that have grown too big to
fail. But the law has not eliminated the too-big-to-fail
problem, and massive taxpayer bailouts are still
possible. The largest banks have retained
their competitive advantage and can borrow
[Taylor JonesFor the Hoover Digest]

H O O V E R D IG E S T W INTER 2015

59

at a lower interest rate because their creditors are protected against failure.
As a result, merely big banks cannot compete with the largest banks, and
many have sold out to them. For example, JPMorgan acquired Chase National, and JPMorgan Chase acquired Bank One. The biggest banks became even
bigger, and concentration of lending greatly increased.
There are better alternatives. One of them, the bipartisan Brown-Vitter
bill (introduced by senators Sherrod Brown of Ohio and David Vitter of Louisiana), would substantially raise capital requirements of all the largest banks.
Large stockholders would have incentives to enforce prudential behavior by
bank managers more effectively than regulators because their investment is
at risk.
Regulations that favor some interests over others is not a problem
confined to finance. It is a feature of environmental protection, labor markets, and much else. The US regulatory system does a poor job of fulfilling
the main economic reason for regulationclosing any demonstrated gaps
between private and social cost. It is much more likely to find ways to help
specific, favored groups of constituents, shifting the costs to others. The Consumer Financial Protection Bureau, a creature of Dodd-Frank, takes funding
from the Federal Reserves massive earnings on its huge portfolio to direct
credit toward individuals and groups it claims are disadvantaged. This is an
invitation to cronyism and corruption.
To help strengthen the rule of law, Congress could require that all regulations above some specified cost be approved by both houses. That would
provide oversight by elected officials who could reject special privileges and
cronyism. It could also insist that all spending by any agency for any purpose
requires direct congressional authorization, a fundamental principle of the
Constitution.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.
New from the Hoover Institution Press is
NAFTA at 20: The North American Free Trade
Agreements Achievements and Challenges,
edited by Michael J. Boskin. To order,
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60

H O O VER DI GEST WI N TER 201 5

CA LI F OR N I A

Expensive
but Worth It?
California could be pricing itself
right out of an economic recovery.

By Carson Bruno

ts no secret that California is expensive. Its a little more nuanced than


that: coastal California is very expensive, while inland California is just
moderately expensive. State leaders in Sacramento, however, dont
appear too concerned with Californias growing price tag even though
theres evidence that it could be slowing the Golden States economic growth.
Real estate is typically the indicator of how expensive a state is, and California arguably has the most overvalued real estate market in the country.
Based on analysis by Jed Kolko, chief economist at Trulia, eight of the top ten
most overvalued markets are in California cities. Possibly more problematic
for California is that both coastal and inland California home prices are well
above the national median. The average listing price nationwide is approximately $341,000. Meanwhile, Californias average listing price is more than
twice that. Even excluding the non-coastal counties, Californias median average listing price is still about 10 percent higher than the nation as a whole.
This is problematic since there is evidence of a clear correlation between Californias high home prices and domestic outmigration from the Golden State.
Yet, Californias real estate isnt the only pricey item that could be causing problems for the state. A look at purchasing power across the country
reveals that a dollar doesnt go very far in California. Purchasing power is

Carson Bruno is a research fellow at the Hoover Institution.


H O O V E R D IG E S T W INTE R 2015

61

how much of the same thing a dollar can buy in different areas. Californias
purchasing power is 112.9, which means California is 13 percent more expensive than the national average. Another way to think of this is how much
$100 can buy in each of the states. For California, $100 can buy only $88.57
worth of goods, while, for example, $100 can purchase $101.21 in Oregon. And
again, both inland and coastal California have weaker purchasing power than
nationwide; indeed, while inland California is just slightly more expensive
than the national average, coastal California is about 5 percent more expensive than inland.

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H O O VER DI GEST WI N TER 201 5

The priciness of California affects individuals, particularly the poor


and middle-class, who increasingly cannot afford the states quality of life.
Importantly, these expenses also affect, determinately, Californias business environment. On a cost-per-job
basis, California ranks forty-sixth in
Its not only pricey houses.
the nation; this is the root of CaliforA dollar just doesnt go very
nias anti-business climate. The more
expensive it is to hire and employ
far in California.
workers, the fewer jobs businesses
will create. Assuming business requires expansion, it is cheaper to
explore other areas. Overall, Californias cost per employee is about
19 percent higher than the national average. Of the Western neighbors, Washington is the closest to California, but it is still 5 percent
cheaper. Indeed, Californias cost per employee is 15 percent more
expensive than the average Western state.
Across the board, California labor costs per employee are
higher, ranging from 14 percent higher than average for labor
wages to 61 percent higher for workers compensation.
Compared to the other Western states, Californias
wages are 11 percent higher and workers comp is
55 percent higher.
But labor costs are not the only factor behind
high California costs. Taxes and legal fees also
tilt business expenses upward. Not only is
Californias corporate income tax about 32
percent higher than in its Western neighbors
(12 percent higher than the national average), the states business fees are also 63
percent higher than in other Western states
(31 percent higher than the national average). On average, California businesses pay
22 percent more in commercial liability costs
per employee than in other Western states.
The biggest problem with Californias costs
is that there is no single,
simple fix. Obviously, in
[Taylor JonesFor the Hoover Digest]

H O O V E R D IG E S T W INTER 2015

63

the area of business costs the states burdensome corporate taxes and fees
represent a clear policy problem. In that case, eliminating the corporate
income tax entirely (it brought in only 6 percent of state tax revenues in fiscal year 201213) would clearly yield large dividends for the states economy.
Tort reform and other legal fixes to reduce frivolous lawsuits would certainly
help also. But when it comes to other costs, the answer isnt as obvious. In
some areas new housing development would certainly help, but it would also
reduce the excess equity current homeowners have.
Nonetheless, Sacramento has largely ignored these pricey problems (and
in some cases, worked to exacerbate them). If Californias leaders truly want
a comeback, working to ensure the Golden State is affordableboth for individuals and businesseswould be a good starting point.
H

Reprinted by permission of Real Clear Markets.


2014 RealClearMarkets. All rights reserved.

Available from the Hoover Institution Press is


Entitlement Spending: Our Coming Fiscal Tsunami,
by David Koitz. To order, call 800.888.4741
or visit www.hooverpress.org.

64

H O O VER DI GEST WI N TER 201 5

E DUCAT I ON

Transforming
Tomorrows
Schools
The wheels of education reform grind exceedingly
slow, but they have ground out some progress.
We need more.

By Chester E. Finn Jr.

aving reached threescore-and-ten and moved to a new role at the


Thomas B. Fordham Institute, I decided to take stock of the state of
American education.
Ive been at this for ages, notably since Diane Ravitch and I launched the
Educational Excellence Network in 1981. Two years before A Nation at Risk,
we and a handful of fellow travelers concluded that American education
needed a kick in the pantsa kick toward greater quality, primarily in the
form of stronger student learning. That was before many of todays education reformers were born, but they form a growing army of compatriots with
whom I still march.
What has been accomplished in three-plus decades? A lot, actually, beginning with two epochal changes.

Chester E. Finn Jr. is a senior fellow at the Hoover Institution, chairman of


Hoovers Koret Task Force on K12 Education, and president emeritus of the
Thomas B. Fordham Institute.
H O O V E R D IG E S T W INTE R 2015

65

First, we now judge schools by their achievement results, not their inputs
or intentions. And while we still struggle with the details, over the years
weve developed academic standards that set forth the results we seek, created measures to gauge how well theyre being achieved, built a trove of data
that generally makes results transparent and comparable, and constructed
accountability systems that reward, intervene in, and sometimes sanction
schools, educators, and students according to how well theyre doing.
And, second, choice among schools has become almost ubiquitous.
Though too many choices are unsatisfactory, and too many kids dont yet
have access to enough good ones, were miles from the education system of
1981, which took for granted that children would attend the standard-issue,
district-operated public school in their neighborhoods unless, perhaps, they
were Catholic (or very wealthy).
Plenty more gains deserve mention,
including the serious entry of technology
into classrooms, ambitious teacher-evaluWe still have too many
ation systems, networks of charter schools
unforgivable gaps, too
many dropout factories, that do a bang-up job of educating poor
kids, some rewards for outstanding educatoo many kids left behind.
tors (and some softening of job protections
for the other kind), and a host of alternative routes into classrooms and principals offices.
Yes, theres much to be proud ofand millions of American children (and
the nation itself) now benefit from the reformers labors.
But we have so far to go. The reform seeds that weve planted dont yet
yield nearly enough harvest of student achievement or school performance,
particularly at the end of high school, when it matters most. We still have
too many unforgivable gaps, too many dropout factories, too many kids left
behind, too many without great options. Other countries are making faster
gains. And we havent yet worked our way down the agenda of essential
reforms. Let me note eight of the toughest and most consequential challenges ahead.
Governance. The basic structural and governance arrangements of
American public education are obsolete. We have too many layers, too many
veto points, too much institutional inertia. Local control needs to be reinventedto me, it should look more like a charter school governed by parents and
community leaders than a vast Houston- or Chicago-style citywide agency
and education needs to join the mayors (and governors) portfolios of other
important human services. Alternatives are emergingmayoral control in a

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H O O VER DI GEST WI N TER 201 5

dozen cities, recovery school districts in a few states, and morebut the
vast majority of US schools remain locked in structures that may have made
sense around 1900 but dont in 2014.
Finance. I dare you to track, count, and compare the dollars flowing into
a given school or a given childs education. I defy you to compare school budgets across districts or states. I challenge you to equalize and rationalize the
financing of a district or state education systemand the accounting system
that tracks itin ways that target resources on places and people that need
them and that enable those resourcesall those resourcesto follow kids to
the schools they actually attend. What an unfiltered mess!
Leaders. Were beginning to draw principals, superintendents, chancellors, and state chiefs from nontraditional backgrounds, but we havent turned
the corner on education leadership. We still view principals, for example,
as chief teachers and middle managers rather than the CEOs they need to
become if school-level authority is ever
We still view principals as
to keep up with school-level responsibil- chief teachers and middle
ity. We already hold them accountable
managers rather than the
as executives, but nothing else about
CEOs they need to be.
their role has yet caught up.
Curriculum and instruction.
Structural reformersI plead guilty to having been onedont pay
nearly enough attention to whats happening in the classroom, in particular
to whats being taught (curriculum) and how its being taught (pedagogy).
The fact is that content matters enormouslyE. D. Hirsch Jr. of the Core
Knowledge Foundation is exactly right about thisand that some instructional methods work better in particular circumstances than others. Both
standards-based and choice-based reform have remained largely indifferent
to these matters, but that ought not to continue.
High-ability students. Smart kids deserve education tailored to their
needs and capabilities every bit as much as youngsters with disabilities. And
the nations long-term competitivenessnot to mention the vitality of its culture, the strength of its civic life, and much morehinges in no small part on
educating to the max those girls and boys with exceptional ability. Yet gifted
education in America is patchy at best; at worst, its downright antagonistic
to the needs of these kids.
Preparation of educators. How many times do people like former
Teachers College President Arthur Levine and organizations like the National Council on Teacher Quality have to document the failings of hundreds

H O O V E R D IG E S T W INTER 2015

67

upon hundreds of teacher- and principal-preparation programs before this


gets tackled as a top-priority reform? Once again, promising alternatives are
emerging, and a smallish number of traditional programs do a fine job. But,
once again, the typical case is grossly inadequate.
Complacency. Two forms of complacency alarm me. The familiar one
is the millions of parents who deplore the condition of American schools in
general but are convinced that their own childs school is just fine (that nice
Ms. Randolph is so helpful to young Mortimer). The new one, equally worrying, is reformers who think theyve done their job when they get a law passed,
an evaluation system created, or a new program launched, and then sit back
on their haunches, give short shrift to implementation, and defy anyone who
suggests that their proud accomplishment isnt actually working.
Greed. I hail the entry into the education reform camp of entrepreneurs
with all their energy, imagination, and venture capital, but Ive seen too many
examples of their settling for making their venture profitable for shareholders rather than kids. Thats not so different from traditional adult interests
within the public and nonprofit sectors battling to ensure their own jobs,
income, and comfort rather than giving their pupils top priority. A firm thats
just in it for the money is as reprehensible as a teachers union thats in it just
to look after its members pay, pensions, and job security.
Thats more than enough to keep the reform army fully engaged for at
least another thirty-three years. Ill march with them as long as I can, as will
my Fordham Institute colleagues. This war needs to be won. My grandchildren are counting on it. So will yours.
H

Reprinted by permission from Education Week (www.edweek.org).


2014 Editorial Projects in Education. All rights reserved.
New from the Hoover Institution Press is
What Lies Ahead for Americas Children
and Their Schools, edited by Chester E. Finn Jr.
and Richard Sousa. To order, call 800.888.4741
or visit www.hooverpress.org.

68

H O O VER DI GEST WI N TER 201 5

E DUCAT I ON

Detention
Dysfunction
The government wants to force a
racial quota system onto student punishment.
This is an even worse idea than you might suppose.

By Michael J. Petrilli

ust as the education-reform movement is starting to figure out how to use test-score data in a
more sophisticated way, the Obama administration and its allies in the civil rights community
want to take us back to the Stone Age on the use of
school-discipline data. This is an enormous mistake.
We all know that there are real problems with the
ways discipline is meted out in some American schools
today. You can find campuses where huge numbers
of students are suspended or expelled, particularly
African-American and Latino teenagers and mostly
boys. Those young people are extraordinarily likely to
end up in Americas bloated prison system as adults,
causing all manner of societal suffering along the way,
not to mention blighting their own lives. Zero tolerance policiesby removing administrator discretion
and treating all offenses as equally injurioushave
arguably made things worse.

Key points
Disparate impact theory will
be counterproductive and have
a chilling effect
on appropriate
school discipline.
Discipline
should be
meted out where
deserved, not
according to a
formula.
Schools and
districts might
decide that
enforcing any
disciplinary code
is too risky.

Michael J. Petrilli is a research fellow at the Hoover Institution, executive editor


of Education Next, and president of the Thomas B. Fordham Institute.
H O O V E R D IG E S T W INTE R 2015

69

I wholeheartedly support efforts to improve the ways that schools handle


these issues. Tips and training on creating a positive school culture and
reducing suspensions and expulsions are welcome. Nor do I doubt that some
of Americas more than one hundred thousand schools discriminate against
minority children. Russlynn Ali, the former assistant secretary for civil
rights at the US Department of Education, talks about the district where a
black kindergartener gets suspended for pulling a fire alarm while a white
tenth-grader does the same thing and gets off with a warning. Thats wrong,
and Im grateful that students who face such discriminatory actions can file
complaints with the Office for Civil Rights.
Still, the administrations recent decision to apply disparate impact
theory to its school-discipline enforcement policy is hugely problematic and
surely destined to prove counterproductive. It is also certain to have a chilling effect on the use of appropriate school-discipline measures, which puts
the entire school-improvement project at risk.
The key part of the administrations ill-conceived school-discipline policy
states,
The administration of student discipline can result in unlawful
discrimination based on race in two ways: first, if a student is
subjected to different treatment based on the students race, and
second, if a policy is neutral on its facemeaning that the policy
itself does not mention raceand is administered in an evenhanded manner but has a disparate impact, i.e., a disproportionate and
unjustified effect on students of a particular race.
As eminent legal scholar Richard Epstein explains in his Education Next
article,
Much of the analysis turns on the word unjustified. Disproportionate rates should not be regarded as unjustified merely because
they reflect higher rates of improper behavior by minority
students than by white students. But this point is never explicitly
acknowledged in the ED and DOJ guidance.
This is the heart of the matter. What if African-American and Latino students actually misbehave at higher rates than do white and Asian students?
If thats the case, then race-neutral discipline policies, fairly applied, will
result in a greater proportion of minority students receiving punishments.
Yet the administration is saying that educators whose legitimate, even neces-

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H O O VER DI GEST WI N TER 201 5

sary, actions produce that result can still be charged with discrimination.
Epstein rightly asks,
Just what sanction should apply to a school where discipline is
imposed on a color-blind standard yet has statistically imperfect
outcomes? Should some white students be summarily suspended,
expelled, or otherwise sanctioned to make the numbers come out
correctly? Or should schools give a pass to black students who have
committed serious offenses in order to achieve the same ends?
Lamentably, it cannot surprise us if minority students today misbehave at
disproportionate rates. African-American and Latino children in America
are much more likely to face challenges that put them at risk for antisocial behavior. They are more likely to be poor (and much more likely to be
extremely poor); more likely to grow up in a single-parent family (nearly
always headed by a mother, which is especially problematic for boys growing
up); much more likely to have a parent in prison; and much more likely to
live in neighborhoods where poverty is concentrated. Civil rights enforcers
should, at minimum, consider these background variables. Yet the administrations policy looks at race alone. No social scientist, regardless of ideology,
would consider such an approach sound.
Note, too, that while the administrations letter declares that disparateimpact data wont be the end of the story (they will investigate all relevant
circumstances, such as the facts surrounding a students actions and the
discipline imposed), it also doesnt say that such data would be used only
as a red flag. That might be a reasonable approach (again, if controls were
in place for poverty status and other risk factors). The data would raise
questions; a site visit would offer answers. Yet the administrations position
is much more radical, stating clearly that a policy that is neutral on its face
and administered in an even-handed manner can still result in unlawful
discrimination if it has a disproportionate and unjustified effect on students of a particular race. Under this reasoning, if the numbers dont come
out right, administrators are presumed to be guilty of discrimination.
Can they be serious? Alas, they surely are.
Can they not take a lesson from Americas experience with the uses of
test-score data in making judgments about educators and schools? In that
realm, weve made significant progress over the past fifteen years. Back
then, we typically evaluated schools based on average test scores alone.
Then, under No Child Left Behind, we moved to a bit of nuance by disag-

H O O V E R D IG E S T W INTER 2015

71

gregating proficiency rates by racial and other subgroups. Still, that law
became notorious for labeling schools as failures just because they served
large proportions of poor students, even though some of those schools are
making encouraging annual gains with their populations. Were finally looking at growth over time, rather than a snapshot in time, and when it comes to
teachers, were complementing test-score data with observations and other
on-the-ground information. (I believe we should be doing the same when
evaluating schools, as charter school authorizers do.)
Yet self-styled accountability hawks, such as Dropout Nations RiShawn
Biddle, applaud the crude use of student-discipline data. His argument, as
far as I can tell, is that discrimination happens and that the administrations
crusade is necessary lest bad actorsbad adult actors, that isbe let off the
hook. But again, the question isnt whether some schools out there are violating students civil rights; surely they are, and they should be sanctioned for
it. Its equating disparate impact with racial discrimination.
C. Todd Jones, a deputy assistant secretary in the Office for Civil Rights in
the George W. Bush administration, explained why this is so pernicious.
Remember, OCR investigations which result in evidence of
a violation almost always end with a consent agreement. This
means that in the real world, OCR will be pushing for consent
agreements binding districts where the only evidence that they
did anything wrong will be statistical.
A nation that presumes that law enforcement investigation is
necessary based on statistical disparity is a nation that is disposing of the presumption of lawful behavior. As one who used
to enforce these laws, I am quite certain that there are districts
that are discriminating against people on the basis of race just as
certainly as I am convinced that other districts are not. However,
when our chief law enforcement agency encourages review in this
manner, it will push an ever-shifting collection of school leaders
into a presumption of unlawful behavior that is only to be satisfied
by someone elses (OCRs) evaluation of the remaining evidence.
This inevitably will force those school leaders to ignore that which
they cannot otherwise quantify, which is a diminution of the professional trust of administrators just as surely as zero-tolerance
policies are.

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President Obamas policy will have a predictable effect: eliminating


suspensions and expulsions as an option for school administrators. Districts
(and charter schools) will simply decide that enforcing any discipline code is
too risky. Such a zero tolerance policy will further erode adult authority in
our schools, force educators to keep disruptive students in classrooms, and
curtail the learning of those students peers.
Educators often complain that policy makers stack the decks against
them. In this case, regrettably, theyre not wrong.
H

Reprinted from Education Next (www.educationnext.org).


2014 by the Board of Trustees of the Leland Stanford Junior University.
All rights reserved.

Available from the Hoover Institution Press is


The Best Teachers in the World: Why We Dont Have
Them and How We Could, by John E. Chubb. To order,
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73

T H E ENVI RONME NT

Climate Change
Realism
If we cant stop climate change, can we adapt to it?
Lets find out.

By Edward Paul Lazear

he Obama administration is instituting far-reaching policies to


reduce carbon emissions and mitigate climate change. Are any of
these capable of making a difference? Simple arithmetic suggests
not. Given this reality, we would be wise to consider strategies
that complement and may be more effective than mitigationnamely, adaptation.
According to the Paris-based International Energy Agency, in 2012 the
world emitted a little over 31 gigatons of carbon dioxide. China was the number one emitter, accounting for more than one-fourth of the carbon produced.
The United States was second, emitting about one-sixth.
China and India, among other developing countries, argue that they
should be allowed to increase carbon emissions. Theyre still developing and
require higher rates of economic growth. Moreover, they arent responsible
for previous emissions, and on a per capita basis US emissions are much
higher.

Edward Paul Lazear is the Morris Arnold and Nona Jean Cox Senior Fellow at
the Hoover Institution, co-chair of Hoovers Conte Initiative on Immigration Reform, and the Jack Steele Parker Professor of Human Resources Management and
Economics at Stanford Universitys Graduate School of Business.

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H O O VER DI GEST WI N TER 201 5

These arguments have merit but must be measured against the reality of
carbon growth. Consider China: its carbon emissions increased by an average of 8.6 percent a year between 2002 and 2012. Were China to continue at
this pace for twenty-seven years until it reaches todays US GDP per capita,
it would emit 99 gigatons of carbon in 2041 alone, or three times the worlds
current emissions.
This scenario is too pessimistic. As countries develop, they become more
efficient in energy use. But even if China tapered its emissions growth from
8.6 percent to zero over the same twenty-seven years, it would still emit as
much carbon in 2041 as the entire world does today. And thats not including
emissions growth from India, Africa, and South America.
CAN EMISSIONS BE SLASHED?
Is there any hope of limiting carbon emissions to 3050 gigatons in 2030, as
many climatologists have called for, with substantial reductions thereafter?
Some countries, notably Denmark and Sweden, have significantly reduced
emissions. Can the United States do the same?
Feel-good actions wont
make a dent. For example,
Even if China tapered its emissions
it is fashionable to favor
growth from 8.6 percent to zero
locally grown produce in
over twenty-seven years, it would
part to reduce the carstill emit as much carbon in 2041
bon from transport. But
transport from producer to as the whole world does today.
retailer is a trivial part
less than 5 percentof energy used in the life cycle of produce. Almost all of
the emitted carbon is associated with production, which means that growing a tomato bound for Chicago in an Illinois winter hothouse rather than
outdoors in Florida is not a carbon-saving strategy.
How about using public transportation, driving carbon-friendly vehicles,
living closer to work, or biking instead of driving? Suppose that the United
States completely eliminated carbon emissions from transportation over
the next four years. The IEA data show that world emissions would still rise
because the reduction from the United States would not cover the increase in
carbon emitted by the rest of the world. Without worldwide changes there is
limited gain, even from dramatic action by the worlds second-largest emitter.
The economics also work against a major transformation in the technology of producing power, either mobile or stationary. Coal is cheap. Natural

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75

gas is becoming even cheaper, but its carbon emissions, according to the US
Energy Information Administration, are still half those of coal and threequarters those of gasoline per unit of energy produced. Although a switch to
natural gas for many power uses would help, and accounts for recent drops
in US emissions, it could not change the carbon arithmetic enough to prevent
the world from exceeding safe levels.
Unless an economical low-carbon source of power generation becomes available, it is unrealistic to expect that
countries, especially developing ones, will accede to any
demand to produce power in a higher-cost manner
merely to emit less carbon.

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H O O VER DI GEST WI N TER 201 5

Very high carbon taxes or severely restrictive cap-and-trade policies


might provide substantial motivation to conserve. These could reduce
carbon-intensive consumption and motivate a switch to lower-carbon power
sources like nuclear. But these actions are undesirable because of their
adverse effects on the economy. Australia instituted a $22-per-ton carbon
dioxide tax in 2012. It repealed the highly unpopular measure last July,
mainly because of its economic costs and perceived ineffectiveness. Research
and development are worthwhile. But they can be wasteful and ineffective
recall Solyndra and its misspent subsidiesand if R&D is to be sponsored by
government, all developed countries should participate in funding.
SPEAKING THE A-WORD: ADAPTATION
Given these limitations on mitigating carbon emissions, it is important to
study how to adapt to climate change. There are myriad possibilities for
adaptation, including the obvious, like building dikes in low-lying areas and
planting heat-tolerant crops and trees in cities. Some adaptation will occur
naturally. For example, economic incentives will induce people who are setting up new households, businesses, and farms to move to areas that are less
severely harmed by warming temperatures.
[Taylor JonesFor the Hoover Digest]

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77

Organizations like the UN-sponsored Intergovernmental Panel on Climate


Change have pushed adaptation as a complementary strategy to mitigation.
Still, adaptation has received little attention by the Obama administration
and is hardly mentioned in public discussion. Proponents of strong anti-carbon measures seem to believe that even considering an alternative to mitigation will weaken the publics willingness to bear the costs of mitigation.
Carbon math makes clear that without major effort and a good bit of luck,
we are unlikely to control the growth of emissions enough to meet the standards that many climate scientists suggest are necessary. It is time to end the
delusions and start thinking realistically about what can and will be done.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.
Available from the Hoover Institution Press is
Issues on My Mind: Strategies for the Future,
by George P. Shultz. To order, call 800.888.4741
or visit www.hooverpress.org.

78

H O O VER DI GEST WI N TER 201 5

T H E E N VI R ON M E N T

The Fires
Next Time
Drought, heat, bigger fires:
forest management has to keep up.

By Terry L. Anderson and Daniel B. Botkin

ecent wildfires in the drought-stricken West had state and federal


fire officials intensely worried. Across several states, wildfires
burned hundreds of thousands of acres.
The US Departments of Agriculture and Interior spent $1.8 billion fighting
fires in 2013. In the past, the funds for this have come out of the basic budgets
for forest management in these agencies, taking away from other activities.
To remedy this, the Wildfire Disaster Funding Act of 2014, introduced in the
House in February and its sister act introduced in 2013 in the Senate, would
make up to $2.7 billion each year available for the emergency and unpredictable aspects of wildland firefighting including support, response, and
emergency stabilization activities.
Even with a specific fire-suppression budget, however, agencies on the
front lines will be caught in a Catch-22. With homes, watersheds, and vistas
threatened, city, county, state, and federal agencies have little choice but to
throw everything they have into suppression, once again neglecting the basic
forest management needed to clear the tinder buildup that fuels infernos.
Terry L. Anderson is the John and Jean De Nault Senior Fellow at the Hoover
Institution and the William A. Dunn Distinguished Senior Fellow and former
President and Executive Director of PERC in Bozeman, Montana. Daniel B.
Botkin is a professor emeritus of environmental biology and global ecology at the
University of California, Santa Barbara.
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79

The forest-management dilemma results in part from a mistaken belief


among some conservationists that nature, if left on its own, achieves a balance that is best for nature and for humans. Change brought on by humans is
thought to be bad for all.
This mentality is also apparent in President Obamas recent National
Climate Assessment and in the United Nations Intergovernmental Panel on
Climate Change report. Both suggest there is some optimal global temperature, without which irreversible changes will occur. They give the impression
that living things are fragile and incapable of dealing with change. But the
opposite is true: life is persistent, adaptable, and adjustable.
Balance-of-nature ecology runs counter to modern dynamic ecology, which
understands nature as a motion picture, so to speak, not a still life. In this
never-ending movie, the environment has always changed and is always
changing, and humans have always
played a role. Before European settleAgencies are forced to throw ment, most North American forests
burned frequently. Even wetter
everything they have into
suppression. But basic forest Eastern forests often saw fires, often
lighted by Native Americans opening
managementclearing up
the land for wildlife or agriculture.
tinderis neglected.
Ironically, the forest primeval that
European settlers believed they moved
into was, in part, the product of human action.
In the same vein, economies are always changing. Human ingenuity and
new technologies change nature and adjust to it.
Blending dynamic ecology and dynamic economics raises two questions:
how and why is the environment changing, and how can dynamic economies
interface with dynamic environments?
On the first question, science plays a crucial role. Research led by Northern Arizona University professor Wallace Covington, for example, has shown
how frequent fires sustained ponderosa forests. Without fire, Douglas fir
chokes out the ponderosa pines and provides fuel for fires that kill most
everything. Even Californias thousand-year-old sequoia trees cannot reproduce unless fires clear areas and allow sunlight to reach seedlings.
Such science should guide forest managers to use some of their mitigation
budget to light small, controlled burns to mimic dynamic ecology by eliminating some of the fuels that cause massive wildfires.
Dynamic economics requires finding the appropriate institutions for connecting human action with environmental change. Government can help by

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H O O VER DI GEST WI N TER 201 5

LIKE KINDLING: Fire crews work into the night to try to contain a wildfire that blackened thousands of acres near San Diego in 2007. Since
then, extreme drought has intensified the danger of destructive fires
across the West. [FEMA / Andrea Booher]

providing realistic signals about the environment and encouraging people to


act on them. But it can also do the opposite. Hard as Hurricane Sandy was on
the Jersey shore or Hurricane Katrina was on New Orleans, providing FEMA
funds to rebuild in the same locations distorted the incentive to account
for dynamic ecology. Low-interest loans already are available to homeowners and businesses that suffered property damage in last years San Diego
wildfires. Such policies fool people into thinking that they can live anywhere
without accepting the environmental risks, but they do not alter the fundamentals of dynamic ecology.
Markets can also play a constructive role. When prices signal environmental change and greater scarcity, people react. Climatologists and agricultural
experts predicted that the grain belt would move northward in response to
climate change, and farmers appear to be responding. North Dakotas corn
acreage increased threefold over the past decade, and Canadas prairie provH O O V E R D IG E S T W INTER 2015

81

inces sowed twice as much corn in 2013 as in 2011, and twenty times as much
as twenty years ago. Similarly, wine production is shifting northward in both
Europe and the United States.
Where water markets signal the scarcity of Earths most precious
resource, people conserve by changing cropping patterns and using watersaving technologies. Californias Central Valley farmers, using computers to
sense soil moisture and satellites to sense temperatures, reduced their water
use 10 percent in the past twenty-five years and grow twice as much product
per gallon.
Dynamic ecology and dynamic economics go hand in hand if we combine
good science with the right incentives. A higher firefighting budget alone without accompanying funding for prescribed burning and other fuel-removing
actions will only promulgate short-term thinking. By better linking human
action to our dynamic natural world, we can find ways for nature to sustain
biodiversity and people to prosper both materially and aesthetically.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.

New from the Hoover Institution Press is Game


Changers: Energy on the Move, edited by George
P. Shultz and Robert C. Armstrong. To order, call
800.888.4741 or visit www.hooverpress.org.

82

H O O VER DI GEST WI N TER 201 5

F OR E I G N POLI CY

Hesitating,
and Lost
The Obama administration inherited a Pax
Americanaa stable and largely peaceful global
orderand then threw it away.

By Richard A. Epstein

here is no denying that President Obamas rudderless


foreign policy has been a disaster. So long as he remains
president, the phrase presidential leadership will continue
to be an oxymoron.
The president suffers from two fundamental flaws. The first is that he is
unwilling to make decisions. He much prefers to play the role of a disinterested observer who comments on a set of adverse events that he regards
himself as powerless to shape, of which Bashar al-Assads carnage in Syria is
the prime example. The second is that he fundamentally misunderstands the
use of force in international affairs. He handicaps himself fatally by imposing
unwise limitations on the use of American force, such as his repeated declarations that he will not send ground troops back into Iraq.
To put these points into perspective, it is important to address two issues:
military strength and American influence. In the presidents view, cutting
down the size of the military reduces the American temptation to intervene
Richard A. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover
Institution and a member of the steering committee for Hoovers Working Group
on Intellectual Property, Innovation, and Prosperity. He is also the Laurence A.
Tisch Professor of Law at New York University Law School and a senior lecturer
at the University of Chicago.
H O O V E R D IG E S T W INTE R 2015

83

in disputes around the globe and thus prevents misadventures such as our
interventions in Iraq and Afghanistan that have sapped American strength
with little or nothing to show for it.
Then there is the deterioration in world peace since Obama became
president. No one can claim that Iraq was at peace when George W. Bush
left office, but the violence had been curbed. Since Obama has taken over,
relative tranquillity yielded to factional squabbling, followed by vicious
aggression that caught the president woefully off guard. Iraq is not alone.
The number of hotspots in the worldincluding Gaza, Syria, Libya, Nigeria,
Ukraine, and the China Seais increasing. The president wrings his hands
over how difficult it has become to find credible allies in the world to address
these problems without ever asking why no one trusts him. So he resolves to
hold back on the use of American force overseas. Armed with that certainty,
every tin pot dictator and terrorist group thinks it has an open field in which
to run.
CURIOUSLY PASSIVE
The presidents blunders remind us that we need Pax Americana in international affairs. If the United States maintains a large military force and
is prepared to use it, the threat of American force could snuff out a large
number of troublemakers and help decent people organize their own affairs.
It was this policy that made NATO such a success in the immediate postwar years. But once our commander in chief neutralizes Americas military
might, weaker but more determined nations and groups know that they have
a free hand to follow their own aggressive agendas. Worse still, this passive
policy invites new thugs like Abu Bakr al-Baghdadi to propel themselves into
regional prominence.
In a New York Times interview with the president last fall, columnist
Thomas Friedman wrote that Obama is only going to involve America more
deeply in places like the Middle East to the extent that the different communities there agree to an inclusive politics of no victor/no vanquished. This
noble sentiment gets the causation backwards. So long as we remain on the
sidelines, we can be quite sure that the various factions in Iraq will continue
to take what Obama termed maximalist positions, without the spirit of
compromise.
The president wants to speak to the Sunni majority, but how is that
possible in parts of Iraq under the thumb of extremist groups? He also chides
the wretched and untrustworthy former prime minister Nouri al-Maliki for
missing opportunities to share power with his mortal enemies. Yet chastising

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Iraqi officials wont get the job done. Left to their own devices, the Sunni, Shiite, and Kurdish factions in Iraq have such well-earned mutual distrust that
they will never be able to agree upon a workable long-term power-sharing
arrangementnot when each party wants 60 percent of the available power
in a world where majority vote rules.
The United States cannot hunker down on the sidelines, waiting for those
groups to agree. It cannot announce in advance that it will not step in to be
the Iraqi or Kurdish air force in the absence of a commitment of the people
on the ground to get their act together and do whats necessary politically to
start protecting themselves and to push back against ISIL.
There is only one way for this to happen. It is for the United States to
put real resources on the table and to
announce in advance it will stay for the
duration. It is not a question of putNo one can claim Iraq
ting a lid on the problem. Seeking a
was at peace when
status-of-forces agreement that would
George W. Bush left
allow ten thousand American troops to
office, but the violence
remain in Iraq is hopeless. The warhad been curbed.
ring Iraqi factions will never commit
themselves to an American presence
that they regard as puny and ineffective.
What is needed is American backing with force and determination. As
confidence grows, we can pull back some of our commitments. But it will be a
long and expensive process.
Obama knows the dangers of his half-measures, given his own regrets on
Libya. Friedman wrote: Intervening in Libya to prevent a massacre was the
right thing to do, Obama argued, but doing it without sufficient follow-up on
the ground to manage Libyas transition to more democratic politics is probably his biggest foreign policy regret.
When it now comes to salvaging the wreckage in northern Iraq, he has
stressed repeatedly that he prefers months of inconclusive air attacks
to placing some boots on the ground that could rout the ISIL forces in
a short fraction of that time. It is hard to know how many people will
starve or be killed in the interim, but we do know that tens of thousands
of people have already been forced from their homes. Some of them have
lost their lives while the president dithered because he wanted the Iraqi
government to repair its own internal relations. Half-measures do not a
great president make.

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WHEN IS FORCE THE ANSWER?


A record as dismal as Obamas does not happen by accident. It stems from
some fundamental conceptual error, which in this instance is one shared
by the hard-line libertarian wing of the Republican Party, led by Rand Paul,
which is deeply suspicious of the use of force in international affairs.
The root of the difficulty is this: a strong libertarian believes that the
primary wrong is the use or threat of force. Its clearly wrong for a powerful
nation such as the United States to commit aggression against its weaker
neighbors. But the intellectual slogging for libertarians gets a lot tougher
when the question is how to respond to both the use and threats of force by
others. In these cases, the principle of self-defense reveals how difficult it is
to decide when to respond and with how much force, even in simple disputes
between ordinary individuals. The issues only get tougher in the international arena as the stakes rise and the overall uncertainty increases.
Obama, like the hard-core libertarians, is skeptical about the use of force in
international affairs. Imprudence is of course unwise in any area, but one cannot rule out the extensive use of force in corners of the world where the ends
soughtthe control of the aggression of othersare indubitably legitimate. The
point is true even when nations act in defense of third parties who are incapable
of defending themselves. Of course, intervention is costly and can easily backfire. But less intervention is not always less costly than more intervention.
In many cases, the only effective way to deal with aggression is with a
strong and decisive response. Our overly intellectual president has failed
to deliver one. He sees himself as a deep thinker who sees issues that lesser
minds just miss. He would do a lot better in international affairs if he would
stop his philosophical musings and start being the president of the United
States and the leader of the free world.
H

Reprinted from Defining Ideas (www.hoover.org/publications/definingideas), a Hoover Institution journal. 2014 by the Board of Trustees of
the Leland Stanford Junior University. All rights reserved.
New from the Hoover Institution Press is
Ronald Reagan: Decisions of Greatness,
by Martin and Annelise Anderson. To order,
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86

H O O VER DI GEST WI N TER 201 5

F OR E I G N A I D

Paved with
Good Intentions
When insurgents sabotage it, American foreign
aid can actually make violence and poverty worse.
Hoover fellow Joseph Felter explains.

By Clifton B. Parker

nsurgents sabotage government-sponsored aid programs in poor areas


because they fear that those programs, if successful, will increase the
governments support among the people, according to work by Hoover
research fellow Joseph Felter.
Felter co-wrote an article, Aid Under Fire: Development Projects and
Civil Conflict, with Benjamin Crost of the University of Colorado, Denver
and Patrick Johnston of the Rand Corporation. Their paper in the American
Economic Review used conflict data from the Philippine military from 20026
that allowed them to precisely estimate how implementation of aid affected
levels of violence in ongoing insurgencies.
Conventional wisdom assumes that development aid is a tool to help
reduce civil conflict. But some aid projects may actually exacerbate the violence, the research showed.
Felter, who is also a senior research scholar at Stanfords Center for
International Security and Cooperation, said in an interview that a winning
Joseph Felter is a research fellow at the Hoover Institution, a member of Hoovers
Working Group on the Role of Military History in Contemporary Conflict, and a
senior research scholar at the Center for International Security and Cooperation
at Stanford University. Clifton B. Parker covers the social sciences for the Stanford Report.
H O O V E R D IG E S T W INTE R 2015

87

hearts-and-minds strategy for disbursing development aid may lead to an


increase in insurgent attacks in the worlds poorest areas. The studys takeaway is not to stop aid delivery, but to appreciate and plan for the possibility
of unintended consequences.
SPOTLIGHT ON THE PHILIPPINES
These issues are particularly important in poor and conflict-ridden countries
like the Philippines, Felter said. The Philippines is home to some of the most
protracted insurgencies in the world. Islamic separatist groups struggle for
[Taylor Jones
for the Hoover
Digest]

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H O O VER DI GEST WI N TER 201 5

an independent Muslim state; a communist group continues to wage a classic


Maoist revolutionary war; and the extremist Abu Sayyaf Group conducts
kidnappings and terrorist attacks.
The aid program Felter and his
colleagues studied involved a large
The studys takeaway is
community-driven development
not to stop aid delivery, but
program in the Philippines. In 2012,
to appreciate and plan for
the World Bank supported more
the possibility of
than four hundred such projects in
unintended consequences.
ninety-four countries, with about
$30 billion in aid.
The Philippine program, the Kapit-Bisig Laban sa KahirapanComprehensive Integrated Delivery of Social Serviceor KALAHI-CIDSSis the largest
of its kind in the country. Through it, poor communities receive projects to
address their most pressing needs. According to Felter, this typically involved
funding for projects like roads, schools, health clinics, and other infrastructure.
This is government funding for projects that citizens in these areas have
expressly asked for, Felter said.

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89

The researchers noted that community-driven development projects, also


known as CDD projects, are popular because evidence suggests they enhance
social cohesion among citizens. But sometimes they draw the wrong kind of
attention from anti-government groups, as the research illustrated.
Felter and his colleagues found an increase of 110185 percent in insurgent
attacks in communities where aid projects commenced, the authors wrote.
If this effect is extrapolated across all of the Philippines municipalities, the
authors estimate that the program resulted in between 550 and 930 additional casualties over three years.
Taken together, this detailed evidence sheds new light on the mechanisms that link aid and conflict, which may eventually help design more effective aid interventions that alleviate poverty without exacerbating conflict,
they wrote.
When the insurgent groups destroy such a project, it has the effect of
weakening the perception that the government can actually deliver on community projects, the scholars wrote. For example, the communist rebels in
the Philippines have issued public statements denouncing the KALAHICIDSS program as counterrevolutionary and anti-development.
If a successful aid program shifts the balance of power in favor of the government, it reduces insurgents bargaining power and their political leverage.
Thus insurgents tend to engage in conflict in the early stages of a project to
keep it from succeeding, according to the research. Conflict increased when
municipalities were in the early or social preparation stages of publicizing
an aid program, Felter and his colleagues wrote.
Sometimes rebel groups divert aid to fund their own operations. Aid shipments are often stolen or taxed by these groups, according to the paper.
WINNING HEARTS AND MINDS
What can be done to prevent attacks?
Greater security around the aid projects and limiting advance knowledge
of the particular projects are good measures to start with, Felter said.
He noted that governments and aid organizations need to be discreet in
how they identify aid projects and their locations, and how they disburse the
aid itself. More research on this issue needs to be done, Felter said.
One lesson is not to give insurgents too long a lead time to plan attacks,
he said.
Unfortunately, as the researchers noted, poverty and violence are often
linked: The estimated one-and-a-half billion people living in conflict-affected
countries are substantially more likely to be undernourished, less likely to
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H O O VER DI GEST WI N TER 201 5

have access to clean water and education, and face higher rates of childhood
mortality.
They called for continued progressin the form of international aid
toward eradicating poverty. Governments and multilateral donor organizations are increasingly directing development aid to conflict-affected countries worldwide, Felter and his co-authors wrote.
Felter retired from the US Army as a colonel in 2012 after a career as a
Special Forces and foreign-area officer. He has conducted foreign internal
defense and security assistance missions across East and Southeast Asia
and has participated in combat deployments to Panama, Iraq, and AfghaniOne lesson is not to give
stan. In 2010-11, he commanded the
International Security and Assistance
insurgents too long a lead
Force, Counterinsurgency Advisory and time to plan attacks.
Assistance Team, in Afghanistan.
I saw this dynamic firsthand in
Afghanistan and Iraq, he said of insurgent attacks on aid projects.
This research paper confirms it.
He devoted much of his Stanford doctoral dissertation and his work
at Hoover and CISAC to build what he hopes will be the largest and most
detailed micro-conflict databasethe Empirical Studies of Conflictever
assembled.
There is only so much that the military can do, he said, to win over people
in areas ravaged by war and conflict.
The military can lease hearts and minds by creating a safe environment
for aid projects, he said, but ultimately its up to the government to win
them over.
H

Reprinted by permission of the Stanford Report. 2014 by the Board of


Trustees of the Leland Stanford Junior University. All rights reserved.

Available from the Hoover Institution Press is Syria,


Iran, and Hezbollah: The Unholy Alliance and Its
War on Lebanon, by Marius Deeb. To order, call
800.888.4741 or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

91

WARFARE

From Drones
to Zeppelins
Conventional forces will always be relevant,
while dazzling new weaponry
may quickly become obsolete.

By Andrew Roberts

he only thing predictable in warfare is its unpredictability. As


soon as experts, general staffs, and politicians decide what they
believe will be the nature of the next war in order to prepare for
it properly, an entirely different kind of conflict happens. The witness of history is so uniform in this regard that it needs to become a general
law of warfare: The war we expect and plan for is never the one were called
upon to fight.
When Napoleon invaded Spain in 1808 he assumed that after destroying
the Spanish army in one or two decisive battles, the Spanish people would
capitulate and accept his brother Joseph Bonaparte as their king. Instead he
was swiftly sucked into a six-year insurgency campaign that left a quarter of
a million Frenchmen dead and wounded and eventually opened the way for
the Duke of Wellingtons invasion of France from the southwest in 1814. That
unfortunate war destroyed me, Napoleon lamented in exile on St. Helena
the following year, it divided my forces, multiplied my obligations, undermined morale. . . . All the circumstances of my disasters are bound up in that

Andrew Roberts is a member of the Hoover Institutions Working Group on the


Role of Military History in Contemporary Conflict. His latest book is Napoleon:
A Life (Viking, 2014).
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H O O VER DI GEST WI N TER 201 5

fatal knot. Similarly he had no idea of going all the way to Moscow when he
embarked on his 1812 campaign against Russia; he hoped to fight a major
battle on the border, and not get lured further and further into the depths of
enemy territory.
Almost all the British wars of the nineteenth century turned out wildly
different from expected. So confident was the War Office during the opening stages of the Crimean War that it would be over before the bad weather
descended, that it failed to assign proper winter clothing for the army, which
froze as it settled down to a yearlong siege of Sevastopol in 185455. The
soldiers invention of the woolen balaklava helmet to keep the ears and chin
warm derived from this act of overconfidence and incompetence.
It similarly came as a shock to the Victorian public that the Indian Mutiny
of 185758 proved so hard to put down and that the Zulus were able to inflict
a crushing defeat on the British army in the opening stages of the Zulu War
of 1879. Assumptions of racial superiority were part of both those miscalculaBritains War Office was
tions, of course, but the Martini-Henry
rifle was considered so superior to the
confident the Crimean
Zulus spears and cowhide shields that
War would be over before
immediate victory was taken for grantbad weather descended.
ed. By the time of the arrival of the
Therefore it saw no need
Maxim and Gatling machine guns at the
end of that century, policy makers were to give the army proper
winter clothing.
making statements about the future
of warfare just as hyperbolic as those
of any present-day aficionado who writes of the coming dominance of cyber,
drone, and satellite warfare. Yet in the Boer War, despite having machine
guns, the British suffered defeat after defeat in the Black Week of December
1899, and in the end it took a quarter of a million empire troops three years to
subdue the two tiny Boer republics.
OVER BY CHRISTMAS
In retrospect it seems astonishing that anyone could have thought that a
clash between the Central Powers and the Allies during the First World War
would, as the famous phrase went, all be over by Christmas, but many professional strategists did, even in the Royal United Services Institute. To read
their deliberations between 1902 and 1914 in the RUSI Journal, its clear that
many senior figures thought the coming war would essentially be a refighting
of the Boer War, with the Germans playing the part of the Boers. Although

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93

several did predict the part that barbed wire, trenches, and railways would
playhelped of course by the experience of the American Civil Warthis
time they underplayed the importance of the machine gun, which had been so
overplayed in the Boer War.
The assumption that mass artillery bombardments of no-mans land
would inevitably blast away the barbed wire led to the horrific losses on
the first day of the Somme offensive on July 1, 1916, when it turned out that
it hadnt. If one had asked most experts in August 1914 which weapon was
likely to make the greatest difference to the course of warfare in the twentieth century, they would most likely not have answered tanks, fighter planes,
[Taylor Jones
For the Hoover
Digest]

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H O O VER DI GEST WI N TER 201 5

or machine guns, but instead dirigibles and submarines. For all we know,
drones and satellites might be the Zeppelins of the future.
Similarly, before the outbreak of the Second World War, the new technology that allowed massive destruction of cities completely skewed policy
makers decisions. On November 10, 1932, the British prime minister, Stanley
Baldwin, told the House of Commons: I think it is well also for the man in
the street to realize that there is no power on earth that can protect him
from being bombed. Whatever people may tell him, the bomber will always
get through. . . . When the next war comes, and European civilization is
wiped out, as it will be, and by no force more than that force, then do not let
them lay blame on the old men.
The British Chiefs of Staff expected there to be six hundred thousand
casualties in London in the opening weeks of the German bombing offensive,
and were relieved when the city suffered only a fraction of that during the
whole war. Although of course the bombing of cities did play a large part in
the wars outcome, it was boots on the ground in Germany that ended the
European part of the conflict, and civilization was
not wiped out. The weapon that eventually
ended that war had not been predicted
by a single military expert when it
began, for the simple reason that the
nuclear bomb was a mere scientific
theory at the time.

H O O V E R D IG E S T W INTER 2015

95

During the Cold War an enormous amount of time, money, resources,


and effort was (rightly) put into countering a massive Soviet tank offensive
across the northern German plain, which never happened. As that threat was
being contained in Europe, too much faith was put by the American armed
forces in their massive technological superiority over the North Vietnamese
army and the Viet Cong, at least at the start of that conflict. The role that the
jungle and public opinion back home would play in that war was underplayed
in its initial stages, just as the supposed combat readiness of the Iraqi National Guard was hugely overplayed in the Iraq War, with some commentators
even predicting that Baghdad would become another Stalingrad. Thirty
years earlier, although military technology was vital for the British victory
in the Falklands War, the islands werent liberated until British boots on the
ground there replaced Argentine ones.
The assumption that the next conflicts will be all about drones, satellites,
and cyberwarfare, let alone decided by them, rests on the shaky basis that
human ingenuity will not come up with new ways of shooting down drones,
neutralizing satellites, and countering cyberattacks. For every weapon ever
created since the dawn of time, a better weapon has been developed to
overcome it, and there is no reason to suppose the process will end with our
generation. Indeed, with the exponential increase of scientific invention it is
reasonable to assume that within a few decades drones, satellites, and cyberwarfare will be thought of as legacy technology.
With counterinsurgency the story might be different. The billeting of an
enemy army in ones national capital was for many centuries considered the
very definition of ultimate defeat, but not in the past two. Napoleon captured both Madrid and Moscow, the British burned down the White House,
the Germans captured Paris in 1940, the Americans took Kabul in 2001 and
Baghdad in 2003. As Max Boots excellent recent book on guerrilla warfare,
Invisible Armies, reminds us, none of those wars ended there. Yet he also
points out in a detailed statistical analysis that of the 443 insurgencies he has
identified around the world, insurgents succeeded in 25.5 percent of them,
while incumbents won in 63.6 percent, with the remaining 10.8 percent being
draws of some kind. Victory against guerrillas requires the application of
violence and coercion but in carefully calibrated and intelligently targeted
doses, he says, which often also requires boots on the ground.
ROOM TO MANEUVER
While it is unlikely that drones, cyberwarfare, counterinsurgency, and satellite technologies wont play some part in coming conflicts, and no one would

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deny that technology is revolutionizing the battle space in the air, at sea,
and on land, in the final analysis it is twentieth-century-style conventional
military assets that enforce the victory. History suggests that it would thus
be very dangerous indeed not to have balanced, flexible armed forcesconventional, nuclear, cyber, and everything elsebecause each underpins the
others. A good balance could also allow a future war to escalatesuch is
human nature that they always tend to escalate at the beginningin such a
way that is manageable, rather than obliging the West to enforce a nuclear
tripwire as was the case in grand strategy of the 1950s and 1960s.
By hollowing out Americas armed forces as the present defense cuts are
doing, the Obama administration is presenting its successors with fewer
options, and less time to consider the ones it has, in any future conflict. That
is profoundly irresponsible.
With the relative retreat of America and advances of Russia and China
militarily, state-on-state conventional warfare seems much less inconceivable
now than in recent years, and counterinsurgency, which just a decade ago the
politicians assumed was the only game in town, is now of far less relevance
since Presidents Obamas twin-scuttle from Iraq and Afghanistan (although
it could make a resurgence if Russias President Putin invades eastern
Ukraine at any stage, let alone western Ukraine).
A glance at history proves that those embarking on wars are almost
always woefully bad at predicting their nature, extent, length, and even
outcome. To assume today, therefore, that drones, cyberwarfare, counterinsurgency, and satellite technologies will decide the next war, is to fall into
precisely the same trap as so very many of our predecessors.
H

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97

R U SS I A

Putin Is No
Peacemaker
The United States should call out Putin for
what he isand make the world listen.

By Yuri Yarim-Agaev

he killing of 298 innocent people on board Malaysia Airlines


Flight 17 last July was a crime, a consequence of the war against
Ukraine that Vladimir Putin started and which he supplies,
directs, and controls. The Russian president bears full responsibility for this war, including the downing of the Malaysian airliner.
The main problem with our reaction to Russian aggression is not even the
mildness of our sanctions but the lack of clarity of their purpose. Our message to Putin is very confused. Do we want him completely out of Ukraine, or
do we want his help in dealing with that country? They are two very different
requests.
Despite Putins offenses, Western leaders apparently still want him to play
an active role in securing peace and stability. For example, last summer the
White House called on President Putin to take concrete steps to de-escalate
the situation, including pressing separatists to agree to a cease-fire.
After the Malaysian airliner was shot down, German Chancellor Angela
Merkel urged Putin to use his influence with the rebels to ensure a ceasefire. Meanwhile, in appearances on television, US Secretary of State John
Kerry asked Putin to take immediate and clear action to reduce tensions in
Ukraine, to step up and make a difference, and to use all his influence.

Yuri Yarim-Agaev is a visiting fellow at the Hoover Institution.


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H O O VER DI GEST WI N TER 201 5

Despite their harsh words for Putin, leaders of the West still want his help.
British Prime Minister David Cameron summed it up best when he said: We
sometimes behave as if we need Russia more than Russia needs us.
DEVILS BARGAIN
Putin is only too glad to put on sheeps clothing and assume the role of
peacemaker that he has pretended to be throughout the war that he started
himself. According to him, annexing Crimea, shooting down airplanes, and
supporting separatists has only one purpose: to protect the Ukrainian people
from alleged right-wing extremists.
If you want Putins help, beware of what you are asking. He would be glad
to broker a diplomatic solution with the separatists, thus legitimizing his
terrorists and entrenching them on Ukrainian territory.
If that option doesnt work, we can imagine the following completely different scenario: Russian tanks roll over Donetsk. Instead of supporting the
separatists, Putin arrests leaders of the
Donetsk republic and persecutes them for
Putin would be glad to
terrorizing the local population. Blaming
broker a diplomatic
the Ukrainian government for its inability
solution with Ukrainian
to protect people from the terrorists, he
establishes full control over the territory
separatists, legitimizing
and leaves Russian troops there to secure
and entrenching
law, order, and tranquility.
his terrorists.
How would the world react to such
a peacekeeping mission? Would the
Ukrainian army fight Russian troops? Would Western political leaders accept
this as a plausible option? I do not know. But what is more important, Putin
doesnt know either. We should make very clear that we would not accept
Putin as a peacekeeper and we want him out of Ukraine.
Western governments should not implicitly accept the aggressive doctrine
called the Russian world, which was endorsed by Putin and which gives
him the right to intervene into the affairs of virtually any sovereign nation, as
in Ukraine, using the pretext of protecting Russian-speaking citizens.
The major concern of Western leaders is that by taking a strong stand
against Putin, we may lose him as a useful partner in the world arena. We
shouldnt worry about that. History clearly demonstrates that in all major
international trouble spots in which we accepted Putin as our partner, Russia
has always taken the side of the Wests enemy. Such has been the case with
Iraq, North Korea, Syria, and Iran.

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99

It was only natural for Putin to use any invitation on our part as an opportunity to damage us. One should not expect anything different from a person
with the background of a KGB officer, for whom America always has been
enemy number one, and for whom anti-Americanism is a pillar of his power.
A CALL FOR ACTION
If America is Russias enemy, Putins Russia cannot be our ally. Whether we
like it or not, such relations are reciprocal. And from an enemy we do not
need help. We need only check its aggression. For that purpose we should
take the following steps:
1. Publicly recognize that Putin is not our ally or partner, but rather our
foe, and make this position clear to him and to the rest of the world.
2. Ensure that our demands to Russia be absolutely clear. Stop supporting separatists in Ukraine. We do not need Putin as a broker or peacemaker.
Putin must completely get out of Ukrainian territory and Ukrainian politics.
3. Make clear that Putins help is not needed in any other part of the
world. Exclude Russia as our partner or as a mediator from any international
arrangements and negotiations.
4. Reiterate our position of not accepting the annexation of Crimea.
Demand that it be returned to Ukraine.
5. Stop propagating Putins propaganda. Instead, counter it with all the
power of Americas media. Expand broadcasts by Radio Liberty and other
radio stations.
6. Make it clear that we consider the Russian world policy a threat to
world peace and stability. Insist that Russia officially renounce that doctrine
and repeal supporting legislation as necessary conditions for Russias readmission to the community of civilized nations.
7. To stop aggression against Ukraine and to prevent aggressions against
other countries, make Russia pay a high price by introducing sector and
other serious economic sanctions. Be ready to accept the cost of those sanctions.
8. Take immediate steps to reduce that cost and any dependence on Russia. Develop new energy sources and transportation systems in America and
Europe.
9. Provide help, including military assistance, to those who are under
immediate attack or potential aggression by Russia.
10. Revisit communism, an ideology that remains important in Russia as
well as other countries. Educate new generations about its atrocities and
bankrupt ideology.

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[Taylor JonesFor the Hoover Digest]

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101

CONFRONTATION AND APPEASEME NT


Opponents of strong action against an aggressor wrongly equate political
confrontation with war. They believe that admitting that the second-largest
nuclear power is our enemy would usher in another Cold War and make the
situation much more dangerous.
History teaches us, however, that to ignore reality and appease our enemy
is a more dangerous approach than to clearly articulate our principles and
disagreements.
When in 1983 the Soviets shot down Korean Air Lines Flight 007, Ronald
Reagan denounced them as enemies of the United States and the entire
world. Reagans strong stand against the Soviet communism that threatened
us for decades with nuclear war helped stop its expansion and eventually
led to its complete capitulation. If we could stand against the mighty Soviet
Union, we can manage Putins much weaker Russia.
In February 2000, only two months into his presidency, Vladimir Putin
presented one of his first state awards to Air Force General Anatoly Kornukov. In 1983, Kornukov was commander of Sokol Airbase in Sakhalin. His
order to the fighter pilot was: Destroy the target!
The target was Korean Air Lines Flight 007.
H

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R USSI A

Fire Putin
Memo to the Russian people:
your great leader is actually a great liability.

By Paul R. Gregory

ladimir Putin derives his personal popularity in Russia from two


false narratives:
First: Putin personally rescued the economy from the chaos of
the Yeltsin years. Without Putin, pensions and wages would still
not be being paid and the economic collapse would still be continuing.
Second: Putin restored Russias sense of worth on the world stage. Russians can again hold their heads high, no longer humiliated by the collapse of
the Soviet Union and its empire.
The following tribute to Putin on the aptly named Rise of Russia website
illustrates the standard Putin narrative:
Mr. Putin has restored Russian pride and enhanced Russias power. The economy has not only recovered all the ground it lost in the
1990s. . . . Mr. Putin has rebuilt an authoritative state. . . . Russia
is stable; living standards are soaring. It is once again feared and
respected abroad. No wonder Mr. Putin is wildly popular among
Russians, who now look to the future with greater optimism and
confidence than ever over the past two decades.
Only a few voices in the wilderness, including former ambassador to
Russia Michael McFaul, a Hoover senior fellow, have disputed this heroic
narrative, pointing to the mass of evidence contradicting it. Even some main-

Paul R. Gregory is a research fellow at the Hoover Institution. He is the Cullen


Distinguished Professor of Economics at the University of Houston and a research
professor at the German Institute for Economic Research in Berlin.
H O O V E R D IG E S T W INTE R 2015

103

stream American analysts seem to buy the Putin saved Russia argument.
However, the facts, for those interested, are these.
Russias economic recovery began before Putin became Russias elected
czaras some fawning followers call him. Since Putins assumption of
power in the last days of the twentieth century, economic growth in Russia
has been lower than in two-thirds of its former Soviet neighbors.
Putins renationalization of Russias energy, minerals, and banking has
destroyed hundreds of billions of dollars of market value of property belonging to the Russian people. Mismanagement of Putins petrodollar state
caused Russian energy production to stagnate as it missed out on the tar-sands and
Was there a Putin in each
fracking revolutions that began in North
of the eleven other exAmerica.
Soviet republics? How
Putin appears to have set aside voices
of reason in favor of the claims of quacks
else did they manage to
that autarky and isolation are actually
recover without Russias
good for Russia. Josef Stalin listened to
dubious help?
the pseudoscience of Trofim Lysenko and
ruined agriculture. Putin is learning from
the pseudoeconomics of his adviser Sergei Glazyev how to weaken the entire
economy by going it alone.
Putins misadventure in Ukraine has turned Russia further into an international pariah isolated from world markets, technology, and capital. Russians traveling abroad no longer proudly display their passports at check-in
lines. Their musical stars are booed at international competitions and their
embassies are beset by protesters. International courts impose large judgments on Russia, and even the United Nations decries Russias annexation of
Crimea.
STEALING THE CREDIT
Believers in the Putin economic miracle must dispute a number of inconvenient truths.
First, Russian economic growth between Putins accession and the global
economic crisis of 2008 ranked in the bottom third of the twelve (non-Baltic)
former republics of the USSR. From 200813, Russian growth was below
average, and Russia is expected to chart zero or negative growth in 2014 and
perhaps 2015. The two countries that have suffered the wrath of a Putin invasion (Georgia and Ukraine) outgrew Russia.

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OVERSOLD: Russian President Vladimir Putins reputation is based


largely on his presumed success on the economic front. But Russia was
beginning to grow before Putin assumed power and its growth since
then has stagnated. [Russian Presidential Press Office]

If Putin were the heroic cause of Russias recovery since 1998, there
must have been a Putin in each of the eleven other former Soviet republics
because they all recovered at the same time.

H O O V E R D IG E S T W INTER 2015

105

If Putin were not the cause, why did Russias economy recover after 1998?
Scholars rightly attribute the recovery to the taming of inflation, the creation
of minimal institutions of a market economy, and the currency devaluations
that accompanied the Russian economic crisis of 1998. These building blocks
of growth were in place before Putin took the reins of power. They were also
present in the other former Soviet republics, where the recovery began at
the same time.
Second, Putins renationalization of Russias national champions raised
the states share of the economy to one half. On the eve of Putins ascension, the state owned 10 percent of the oil sector. Now, it is between 40 and
45 percent. The Russian state controls half of the banking sector and three
quarters of transport. If anything, these shares understate state control. The
managers of the still-private large companies realize that they can take no
steps that Putin opposes. Although
not formally owned by the state, they
Gazprom was once the
are still controlled by the state.
worlds third-most-valuable
Russias petrostate lives or dies on
the
basis of energy production and
company. Today, it doesnt
prices. As Russia turned to privatized
even show up in the worlds
companies, such as Yukos, TNK, and
top 100.
Sibneft, oil production rose almost 50
percent between 1999 and 2004. After
Putins renationalizations, both oil and gas production have stagnated to the
present day.
Although Putin touts the benefits of his brand of state capitalism, two
examples confirm its inefficiency.
The first example is Gazprom, the state gas monopoly. In 2007, Putin set
the goal to make Gazprom the worlds first trillion-dollar corporation. At the
time, Gazprom was valued at $360 billion and was the worlds third-mostvaluable company. Today, Gazprom is worth $77 billion and does not even
show up in the top hundred world companies.
How did Gazprom under Putins cronies manage to lose almost $300
billion of value, despite its 15 percent share of world gas reserves and its
stranglehold over the lucrative European energy market? Easy. Gazprom
serves as a piggy bank for three purposes: It funnels clandestine income to
its managers and Putins inner circle. It funds Putins favorite projects, such
as its $3 billion social obligation for the Sochi Olympics. And it serves as an
instrument of Russias foreign policy. It is not really interested in creating
value for its owners but in promoting Russias policy interests abroad.

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The second example is Rosneft, Russias national oil company and the
worlds largest oil producer. Lets compare Rosneft with ExxonMobil. The
Russian state has invested heavily in acquisitions of reserves, technology, and
international partners for Rosneft, including a rigged acquisition of Yukos
assets for pennies on the dollar. Rosneft has more reserves than ExxonMobil
and produces more barrels per day. Rosnefts market value is $385 billion
less than ExxonMobils and Rosneft, the worlds largest oil producer, today
does not even place among the worlds top hundred corporations. Why? The
answer, as with Gazprom, lies in politics.
Putin confidants Alexei Miller and Igor Sechin are the CEOs of Gazprom
and Rosneft, respectively. Miller presided over a decline in Gazproms share
price from $51 in May 2006 to its current $7. Sechin has seen Rosnefts
price almost halved since June 2008 despite massive investments and rising
debt. In the West, both would have been fired. In Russia, they are safe in the
embrace of Putins inner circle.
Gazprom and Rosneft dividends account for a significant share of the
approximately $400 billion state budget. Their contribution, however, is
scheduled to fall from the current $22 billion to $4 billion this year as a consequence of declining performance. Putin will have to make up the loss with
new sources of revenue, such as tax increases on Russian families.
Some two-thirds of Russian-listed companies are state ownedthat is,
owned by the Russian people, not by Putin and his inner circle, who have
proven to be poor shepherds of citizen property. Their corruption, mismanagement, and misuse of assets have proven immensely costly. If Russias
largest companies operated like Chinese state companies (which themselves
have low valuations), they would almost double in value. The seven largest
Russian companies alone would gain almost $400 billion in market value for
the Russian people if they were to achieve Chinese levels.
RED STAR RUSTING
Putins disregard for the rule of law and his foreign misadventures are
increasingly isolating Russia from the world economy. His cavalier treatment of international energy concerns has discouraged further investment in
unlocking Russias mammoth but difficult reserves. Putins expropriation of
Yukos shareholders has come home to roost, with arbitrators in The Hague
levying a $50 billion international judgment against Russia last summer.
American and European sanctions are throttling the few large international
projects currently on the books, and Western companies and banks are
scrambling to cut their dealings with rogue Russia.

H O O V E R D IG E S T W INTER 2015

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Putin put on a brave front when he said: I think that [the sanctions] will
ultimately work to our advantage because they will give us the needed incentive to develop our production capability in areas where we had not done so
yet. According to his favored economic adviser, Sergei Glazyev, Russia can go
back to the good old Soviet days of state committees for science, technology,
and economic planning. Well show them, Putin seems to be saying. But I doubt
he believes it.
Although economists agree on little, they do know that there is not a single
modern example of a successful economy cut off from globalization. The old
import-substitution models are thoroughly discredited. The success stories
of the past half centuryChina, the four Tigers, India, and Brazilhave been
achieved by opening, not closing, economies.
Putin has assured his people that Russia is unique, but I doubt it can blaze
a trail by reverting to old Soviet planned-economy tricks. One of Russias most
prominent economists put it this way: It is a pure fantasy that something
good can come of isolation. Other sensible Russian economists, including
the former dean of Russias top economics school, are already calculating the
immense damage that sanctions will impose.
Not a very good record for a lauded godsend, the strong leader that the
country needs at this crucial time of transition and uncertainty. If Putin is
CEO of Russia Incorporated, his shareholdersthe Russian peopleshould
fire him.
H

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H O O VER DI GEST WI N TER 201 5

This article is available in the print edition only.

I N T E RVI E W

Endangering
Prosperity
Weve known for years that our schools are failing
huge numbers of students. Now, Hoover fellows
Eric A. Hanushek and Paul E. Peterson show how
theyre failing the nation.

By Peter Robinson

Peter Robinson, Uncommon Knowledge: A graduate of the US Air Force


Academy and the holder of a doctorate from MIT, Eric Hanushek is a senior
fellow at the Hoover Institution. A professor of government at Harvard and a
senior fellow at the Hoover Institution, Paul Peterson received his doctorate
from the University of Chicago. Both Rick Hanushek and Paul Peterson have
written dozens of articles and books on American education; most recently
they joined Ludger Woessmann in co-authoring Endangering Prosperity: A
Global View of the American School. Rick and Paul, welcome.
Harvard, Stanford, and other American universities rank among the finest in the world anddespite the recession and the slow growth of recent
yearsthe United States remains one of the richest countries in history. If

Peter Robinson is the editor of the Hoover Digest, the host of Uncommon
Knowledge, and a research fellow at the Hoover Institution. Eric A. Hanushek
is the Paul and Jean Hanna Senior Fellow at the Hoover Institution and a member
of Hoovers Koret Task Force on K12 Education. Paul E. Peterson is a senior
fellow at the Hoover Institution, a member of Hoovers Koret Task Force on K12
Education, and the editor in chief of Education Next. He is also the Henry Lee
Shattuck Professor of Government and the director of the Program on Education
Policy and Governance at Harvard University.
H O O V E R D IG E S T W INTE R 2015

117

weve got great universities and a rich country, what is it about our schools
that endangers our prosperity?
Paul E. Peterson: We once had the finest educational system in the world
at the elementary and secondary level as well. We in the nineteenth century
were the first to have universal elementary education. We were the first in
the twentieth century to build a system of secondary schools that was nationwide, and a very large
percentage of the
students attended
those schools. The
Europeans were
fighting over religious
issues and never got
down to the basics.
We left it all up to our local communities to build these schools and they did
it very rapidly. But somewhere around 1960 this steady improvement in our
educational system began to stabilize and stagnate, and the rest of the world
has caught up and passed us by.
Robinson: What is the link between our educational system and prosperity?
Eric A. Hanushek: In simplest terms, economic growth or the future wellbeing of a society depends upon the skills of its population. Its hard to get
away from that. If you look across the world, you see that countries that
have a more skilled population and more skilled workforce grow faster. The
United States has had the best economic institutions and that has allowed
us to escape our fate for awhile, because we have free and open labor and
capital markets, good property rights, less intrusion of governmentall the
things that economists think are really important for economic growth. That
has allowed us to do better than you would expect, given the quality of our
education.
Robinson: Sooner or later if you are producing badly educated kids, youll
have badly educated workers and managers. It will work its way through the
economic system.
Hanushek: Precisely.

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Robinson: You calculate in Endangering Prosperity the difference it would


make to the United States over the lifetime of a child if we improved our
educational performance (you use a big stretch of time, basically from today
until 2093): Matching the level of achievement of our northern neighbor,
Canada, would be the equivalent of adding 20 percent to the paycheck of
every worker for every year of work. Reaching the achievement level of Singapore would be the equivalent of a 43 percent salary increase. Projecting
anything over eight decades is very tricky. How robust do you consider this
finding? Or is it just a kind of heuristic to say wed be richer if we knew more?
Hanushek: Well, whats really robust is looking at history, and history over
the last half century says that there is a very tight relationship between the
skills of a population and growth rates. Youre correct that projecting into the
future is hazardous; many countries might not even be there in eighty years.
If anything like history holds for the
future, you get these numbers that
Why did the United States
are just completely out of sight
emerge as the dominant
seven, ten times our current GDP
industrial power by the time
in terms of value. Your skepticism
is correct because the numbers
of World War I when we were
are so largeno one knows what a
just a little agricultural nation
trillion dollars is. And thats what
on the fringes of the world a
were talking about. But if you think
hundred years
that were wrong and that were
earlier? We did it through
overly optimistic, just cut these
our educational system.
numbers in half. If you cut them in
half, you still have numbers that
suggest that we can deal with our current fiscal problems. Or we could deal
with our income-distribution problems, and still have money left over.
Robinson: You just touched on something very important in my judgment
about the book. You make the case that unless Americans know more, they
will be poorer than they need to be, and this comparisonour current trajectory versus Canada, Singapore, etc.that all sounds as though you are trying
to make us richer. In fact, there are a few passages in the book where you
reveal what I would take to be deeper motives. You write about the problem
of inequality, the budget problem, and various social tensions of all kinds.
What youre saying is that if you have economic growth, all kinds of things in

H O O V E R D IG E S T W INTER 2015

119

a country go better. Youre not saying purely we can all be richer; youre saying we could live in a better, more peaceful, friendlier society.
Peterson: Thats what people do with their money. When they have wealth,
they can use it to do good things. Thats why we want wealth and to create wealth. We now know that human capital is the most important thing
for creating wealth. Why arent we creating as much human capital as we
possibly can in this country? Its quite extraordinary because our history
says that we always did this in the past. Why did the United States emerge
as the dominant industrial power by the time of World War I when we were
just a little agricultural nation on the fringes of the world a hundred years
earlier? And we went through a terrible civil war in the meantime. We did
it through our educational system. We had national markets that helped a
lot, but our educational system was the engine that drove human growth in
the nineteenth and twentieth centuries. Why are we giving up on it? Why
is it that the American public doesnt say: we have to come to grips with
this problem; we cant just sit on our hands and let vested interests run our
school system?
WHAT CAN BE DONE
Robinson: In Endangering Prosperity you provide a litany of national summonses to action. In 1958 Congress enacts the National Defense Education
Act. In 1983 President Reagans task force concludes in A Nation at Risk: If
a foreign power had done to us what our own school system has done, we
would consider it an act of war. In 1989 President George H. W. Bush joins all
fifty governors in setting the goal that the United States would top international rankings by 2000. In 1993 President Clinton reaffirms that goal. In
2001 President George W. Bush signs the No Child Left Behind Act. In 2012
a task force chaired by former New York City schools chancellor Joel Klein
and former secretary of state Condoleezza Rice concludes: Americas failure
to educate is affecting its national security. After all of this, we rank thirtysecond. You asked the questionI return it to youwhy?
Peterson: Why is this happening? Thats a big question. We dont try to
answer it in this book, but we think that vested interests have captured
control of our school system. The people who are working in the schools
are trying to create a system that runs very well for the adults who work
there. They are so concerned about that they dont focus on the needs of the
students. What I think we need to do about it is to look very closely at the
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quality of our teachers; how can we attract better teachers into education
is a terribly important thing. We need to give parents a lot more choice so
they can choose among schools, which will force schools to pay more attention to the quality of their teachers. We need to hold students accountable
and tell students: this is what you have to learn, and we want to see that
you are learning it before we give you that diploma.
Robinson: And while all these national summonses were taking place, it
is not as if nothing was happening. In Endangering Prosperity are the most
exasperating sentences I have read in months: Current education expenditures per pupil in dollars adjusted for inflation are some two and a half
times what they were in 1970. An educational moon shot has taken place.
If money were the answer, the solution would be in place. It is a commonplace of American life in the twenty-first century that if you spend more
money on something, you get more of it. We are now spending two and a
half times per pupil what we spent in 1970, and getting less actual education. How is that possible? Where is the money going?
Hanushek: If I could reinforce that a little bit. In the book we also spend a
lot of time trying to compare individual states to the rest of the world, and
to each other. So we have fifty experiments with the different states. If you
look at the change in what each state has spent since 1990 and look at what
has happened to student performance, you find that there is no correlation
between the states that spent the most and growth rates in achievement.
The state that has spent the least in real-term increases over the past two
decades is Florida, and it has the third-fastest growth in achievement in
that time period. Other states that have spent a lot of money have gotten
no improvement or maybe even a decline in their student achievement.
Robinson: Another quotation from Endangering Prosperity: The battle
is a conflict between the needs of school-age children and the interests
of those adults who have agreed to educate them in our public schools.
The school workforce too often favors only those changes to the status
quo that enhance their income or lighten their workload. Youre professionalsyou have to maintain a dispassionate tonebut this layman
says: Oh, I get it, its the teachers unions; that money has gone to making
grownups more comfortable; hiring more teachers aides; higher salaries
and bigger pensions. You do not say that in the book, but thats whats
going on, isnt it?
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Peterson: It is true also that we have smaller classes than we did. There
are a lot of people who think small classes are the answer. Unfortunately,
it doesnt get you very much, and its incredibly expensive. Its not so much
that teachers are earning so much more relative to other occupations today
than they did in the past, but a lot more money is going into pensions and
medical services, and the payment for that is coming from the taxpayer
rather than the employee.
Hanushek: Teachers salaries have gone up, but unfortunately the salaries paid
to individual teachers are unrelated to how good they are in the classroom.
If we just raise everybodys salary, we are not raising the salaries of the most
effective.
Peterson: There are more people inside the school district than ever before
per hundred students. But a lot of them are sitting in officesthey may not
be teaching at all.
Robinson: So weve bought smaller classes, which gets us very little, and
weve added teachers.
Peterson: And administrators. And specialists.
Robinson: From Endangering Prosperity: In some parts of the United States
and some parts of the world, rapid student achievement gains are being realized. If it can happen elsewhere, including in parts of the United States, there
is no reason it cannot happen throughout the country. Well, OK, what do you
propose? Frontal assaults on teachers unions? We have had some experiments with that in the political systemthere have been initiatives here in
California, school choice initiatives, and they dont work. Teachers unions
are well funded and well organized. What do we do?
Hanushek: Thats not quite right. In the past five years, states have dramatically changed the rules for schools, teachers unions, and evaluation of teachers. Now perhaps half of the states require annual evaluations of all teachers.
Many other states require evaluation of classroom effectiveness before a
teacher gets tenure. That might sound surprisingit seems so obvious that
should be donebut until five years ago, very few states required a judgment
about teacher effectiveness.
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COMPETING WITH THE WORLD: Hoover fellows Paul E. Peterson, left,


and Eric A. Hanushek are the authors, with Ludger Woessmann, of the
new book Endangering Prosperity: A Global View of the American School
(Brookings Institution Press). Economic growth or the future well-being
of a society depends upon the skills of its population, says Hanushek.
[Uncommon KnowledgeHoover Institution]

Peterson: Were taking small steps in the right directionin some states.
A court case just happened in California (Vergara vs. California) that is very
interesting because there is a possibility now that the school system can
dismiss its least effective teachers, which has been extremely difficult.
Hanushek: The argument in Vergara was very simple: that certain state
statutes had the effect of maintaining some grossly ineffective teachers in
the schools, and some students had to get one of these grossly ineffective
teachers. So that was a violation of equal protection of students. It also turns
out to be the case that if you look at major urban centers, schools with more
disadvantaged students have more grossly ineffective teachers. So there was
also discrimination on the basis of the backgrounds of kids.
STANDARDS (AND PERFORMANCE)
Robinson: You cant talk about education without talking about the core curriculum.
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Peterson: My own feeling about the Common Core is that it has given unions
the excuse to say: lets stop testing students and lets stop expecting teachers
to perform. Thats definitely the negative side. I think its important that we
have national standards; we have to set up national expectations for students. The Common Core, for all its limitations, has moved in that direction.
Other countries have itFrance, Korea, Canada at the provincial level. Its
not that we dont need to think about the problem that the Common Core is
trying to address, its just that we cannot give up other things to get to it.
Robinson: Heres something that sticks in the conservative craw: the Tenth
Amendment. Powers not granted by the US Constitution to the federal government belong to the states. And here we are establishing national standards.
Hanushek: Im not against strong standards. I think theyre goodeven
national standards. There is a question about how you get to them and so
forth. My concern is that theres a big difference between saying what kids
should know and having them actually know it. When we look across individual states today, which have had a cacophony of different standards, we find
no correlation between how rigorous the standards are and student achievement. To me, it comes back to what Paul was saying, that you cant give up
on the things that are pushing kids to learn more: accountability, choice, pay
that is related to the performance of teachers.
LEADERSHIP
Robinson: U.S. News & World Report this past January: Although President
Barack Obama did not lay out any new plans for education reform in his State of
the Union address Tuesday, Obama chose to kick off his speech with a teacher
anecdote: Today in America, a teacher spent extra time with a student who
needed it, and did her part to lift Americas graduation rate. If you could offer
the president one or two sentences of advice on education, what would you say?
Peterson: Its great that the president supports education. I think thats one of
the good things about this president. Hes been trying to support reform.
Robinson: Even as he has gutted No Child Left Behind?
Peterson: Well, he has tried to replace it with some alternatives, including
support for charter schools and merit pay. I dont want to fault the president
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altogether when it comes to education policy, but I dont think hes followed
through. I dont think hes able to do more than rhetorical things. Its easy on
the rhetoric side; its hard work on the implementation.
Hanushek: Weve had this fixation on getting high school graduation rates up,
and that probably is important, but only if kids know something when they
graduate. The central message of our book is that whats important is what
students know in terms of actual achievement, skills, and math and science. Its
not how many years of schooling students have had; its what they know.
Robinson: We rank thirty-second in math right now. A decade from now
where will we rank?
Hanushek: I am an optimist, because I have seen that at least half the states
have made real attempts to change the way schools are operated and to
pay attention to the quality of teachershow they are evaluated, how they
are paid, who is kept in the schools. I think its actually in the interest of the
teachers unions to get behind this, or else theyre going to get run over.
Robinson: Does this feel to you like communist Eastern Europe and the
Soviet Union, where when it began to collapse, it happened fast? We learned
in 1989 that that system was rotten through and through. Does education
feel to you like that? Will things reach some critical point of political will, and
then things will change quickly?
Hanushek: Im not sure about that. On the pessimistic side, I would point out
that two years ago we had this awful strike in the Chicago schools where the
schools were closed down for a few weeks on the platform of good old unionism: pay us more, thats what we care about. Its a struggle now within the
teachers unions, within the teacher core (which is not the same as the teachers unions), and within the public. Why Im optimistic, though, is that so many
state legislatures have now started to say: look, we just have to do something.

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VA LUES

An Officer and
a Philosopher
The late Hoover fellow Joseph McNamara was a
most remarkable thing: a visionary police chief.

By Tunku Varadarajan

ere used to cerebral soldiers. Every American generation has given us a sprinkling. Contemporary generals
are expected to be tough and irrepressible. They are also
expected to be thoughtful and, increasingly, humane. Not so
our copsor at least not until very recently. If an American police chief has
had a philosophy, it has been the stuff of no nonsense, one with which he has
presided over an armed workforce that keeps order in a Manichaean world.
In October I attended a memorial service for a mana copwho was a
glorious exception, a philosopher-policeman. He was Joseph D. McNamara, a
man who had been chief of the San Jose Police Department from 1976 to 1991.
He retired from the force just days after calling for the resignation of Daryl
Gates, chief of the Los Angeles Police Department, four of whose officers had
savagely beaten an unarmed black man named Rodney Kingan act of violence, caught on tape, that came to be seen as the nadir of American policing.
McNamara had been one of a very few senior American police officials
who had condemned Gates in public. In an op-ed written in April 1991 while
Joseph D. McNamara (19342014) was a research fellow at the Hoover Institution. Tunku Varadarajan is the Virginia Hobbs Carpenter Research Fellow at
Hoover, the editor of Hoovers online publication Defining Ideas, and a contributor to the Herbert and Jane Dwight Working Group on Islamism and the International Order.

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A COPS COP: After Joseph McNamara retired as San Joses police


chief in 1991, he became a research fellow at the Hoover Institution.
He continued to write prolificallyop-eds for newspapers,
the Wall Street Journal in particular, and crime novels of a lively
(and sometimes bestselling) flavor. [San Jose Police Department]

he was still running the San Jose Police Department, McNamara said that
the videotape of the LAPD brutality affects the credibility of all police
officers. It has cast a cloud over policing that wont be lifted until police
chiefs drop their own code of silence and speak out against one of their owns
peculiar philosophy of policing.
McNamara died in September of pancreatic cancer. He had, in the time
since his retirement in 1991, been a research fellow at the Hoover Institution,
where I was his colleague for the past seven years. He wrote prolificallyopeds for newspapers, the Wall Street Journal in particular, and crime novels of
a lively (and sometimes bestselling) flavor. His obituary in the New York Times
recognized him as the father of community policing in this country, which
he was indisputably; but he was also much more.
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In an e-mail to me, Ray Kelly, until


recently the chief of the New York Police
Department, described McNamara as a
visionary leader in law enforcement at
a time when they were in short supply.
Starting as a beat cop in Harlem in the
1950s, he became a scholar and an advocate for progressive policing throughout
the country. Never afraid to speak his
mind, he was the most influential police
officer-academic of his time.
Although McNamara received a PhD
in public administration from Harvard
(having earned his bachelors degree
through night classes at the John Jay
School of Criminal Justice), he started
his life on the force pounding the streets
of some of Americas toughest precincts.
Perhaps for that reason, and from beat
McNamaras obituary in
experience acquired the hard way, he
one publication recogbelieved in the stop-and-frisk policing
nized him as the father
policy that lately has been demonized in
of community policing
New York and beyond. McNamara saw
stop-and-frisk as a policy that benefits,
in this country.
on balance, the communities in whose
midst it is practiced. He supported it for
utilitarian reasons: in inconveniencing (or worse) a few citizens, it increased
the safety of a much larger number. Yet he was alive to its political flaws as a
policing tool.
McNamara was only thirty-nine, and not long out of Harvard, when he left
the NYPD to become police chief of Kansas City, Missouri. I was then the
youngest big-city police chief in America, he wrote in his last essay before
his death, an op-ed for Reuters on the events in Ferguson, Missouri. In the
piece, McNamara recalled a very similar incident that occurred only a few
days after he took charge in Kansas City, on a crystal clear day in 1973. An
unarmed eighteen-year-old black man had been killed by a uniformed officer
as he fled the scene of a daylight break-in at a home.
After the shooting, and despite fierce opposition from his own ranks,
McNamara instituted a form of policing that called on officers to be more

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sensitive to the people they policed, to work closely with leaders, churches,
and the like, and to be respectful of the citizens they were paid to protect,
especially those from ethnic minorities. This was a radical idea and deeply
resented by the force. Speaking at McNamaras memorial in San Jose, Chris
Moore, a retired San Jose police chief, said that Joe engaged the community in a way that no police chief had done to date. He believed that to have
legitimate policing in a democratic society, you had to have the consent of the
governed. Today, community policing is Americas default mode, however
imperfectly it may be practiced.
McNamara also was ahead of his time in other ways. He created a rotation
policy at the San Jose Police Department, where he arrived after three years
at Kansas City. Officers werent allowed to take root in departments, where
they ran their own fiefs and kept younger officers out of fresh avenues of
experience. He revolutionized the practice of promotion, instituting a rule of
ten, which allowed him to fill positions by choosing from the ten most senior
available candidates. This enabled him to pick more recently recruited
ethnic-minority officers for promotion, and had a salutary effect on police
and community relations.
He also had some of the strictest rules
McNamara saw stop
in America governing the use of deadly
and frisk as a policy that
force by officers. After the young man
benefits, on balance, the
was shot in his first days as police chief
communities where it is
at Kansas City, McNamara shredded the
departments policing manual. He didnt
practiced.
believe that officers should use their firearms unless there was imminent danger
to human life. His officers were ordered never to fire except under those
circumstances, a command that sprang from the depths of his own morality
and from his personal practice as a cop.
In November 2006, a black man named Sean Bell was shot dead by NYPD
officers who fired fifty rounds at him. It was an incident that inflamed New
York and brought back memoriesstill raw in the black communityof the
shooting in 1999 of Amadou Diallo. Writing in the Wall Street Journal, McNamara said, After the Diallo case, I wrote that I, my father, older brother, and
countless other relatives had collectively served the NYPD for more than a
century and a half and that none of us would have fired at Diallo. I say the
same about the lethal volley that took Mr. Bells life.
McNamara remained an implacable foe of the way in which American
policing became the heavily armed affair that it is today. In the aftermath

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of the Ferguson episode, he called on American police forces to recalibrate


current militarization policies, in which officer safety is paramount. The
fundamental police duty is protection of life. Officer safety should never
supersede democratic policing. He went on to ask, What justification do the
police have for killing an unarmed suspect? The answer is always: none.
In all these respects, Joseph McNamara, described by a succession of
retired police chiefs at his memorial as being twenty years before his time,
deserves to be recognized not just as Americas foremost philosopher-cop,
but as one of the most consequential American policemen of the past fifty
years.
H

Reprinted by permission of the Wall Street Journal.


2014 Dow Jones & Co. All rights reserved.

Available from the Hoover Institution Press is


Eric Hoffer: The Longshoreman Philosopher,
by Tom Bethell. To order, call 800.888.4741 or
visit www.hooverpress.org.

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VA LUE S

In Nobodys
Pocket
Poorly paid politicians are easily corrupted.
Offering them a competitive salary
could be a price worth paying.

By Thomas Sowell

he bribery convictions of former Virginia governor Bob McDonnell and his wife are only the latest in a seemingly never-ending
series of convictions of government officials.
A little item on the Internet featured government officials in
prison, either currently or in recent times. Among them were a mayor of
New Orleans, a mayor of Detroit, and a mayor of Washington; a governor of
Connecticut, a governor of Louisiana, and two governors of Illinois; and four
members of Congress.
However much these and other government officials may have richly
deserved being behind bars, the country does not deserve to have its confidence in government repeatedly undermined. A country with 100 percent
cynicism about its government cannot be governed. And nobody wants
anarchy.
In short, the damage done by government officials who betray the publics
trust goes far beyond the money stolen or misused, or whatever particular
abuse of power landed them behind bars.

Thomas Sowell is the Rose and Milton Friedman Senior Fellow on Public Policy
at the Hoover Institution.
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The difference between a government united behind its leaders and a


government where no leader can take decisive action with an assurance of
public support is a difference between a country that can, and a country that
cannot, deal effectively with the challenges it will inevitably face, whether at
home or abroad.
When President John F. Kennedy took the United States to the brink of
nuclear war in 1962justifiably, I believehe did so with more public sup-

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port than any president could muster today, even though Kennedy had been
elected with the thinnest of margins.
His immediate successorsLyndon Johnson and Richard Nixonwere
both big-time liars who lost the implicit trust that previous presidents had
enjoyed, and that none has enjoyed since, even when these later presidents
were truthful.
Like many other things, public confidence is much easier to maintain than
it is to repair. The main beneficiary is the public itself, when it has a government that keeps faith with it and can better serve the people while relying on
their support.
Most of the things that have landed government officials behind bars have
involved money.
Without making excuses for those individuals, who were all old enough
to know better, the rest of us need to face up to the fact that we are being
incredibly penny wise and pound foolish with the salaries we pay those who
control millions of dollars at the municipal level, billions of dollars at the
state level, and trillions of dollars at the federal level.
A successful economist, engineer, or surgeon who leaves the private
sector to become a member of Congress would take a
serious pay cut.
A corporate CEO would have to take an
even bigger pay cut to become president of the United States.
If the current mess in Washington doesnt convince us that we
need better people in public office,
it is hard to know what could.
What do we do when we want a
more upscale producta better house
or car, for example? We pay more to get it!
If we want better people in government, we
are going to have to start paying them enough that
people would not be sacrificing their families
well-being by going to Washington or a state
capitol, or serving as a judge.
It is not a question of whether the people
currently serving in Congress, in the courts, or
[Taylor JonesFor the Hoover Digest]

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as chief executives at the municipal, state, or national level deserve a raise.


Most of them dont. It is a question of whether we need far better replacements for them.
That means drawing from a wider pool, including people with real knowledge and expertise in the private sector, who currently make a lot more
money than we are paying government officials. Cheap politicians turn out to
be very expensive politicians, in the way they waste money, even if they are
not stealing it.
We could pay every member of Congress a million dollars a year, for a
whole century, for less than it costs to run the Department of Agriculture for
one year.
The least we can do is make it harder to bribe them. Trying to bribe a
millionaire would be harder than bribing some government official with a
modest salary and a couple of kids going to expensive colleges.
The biggest obstacle to doing so is envy, especially under its more lofty
name, social justice.
H

Reprinted by permission of Creators Syndicate (www.creators.com).


2014 Creators Syndicate Inc. All rights reserved.

Available from the Hoover Institution Press is


Ever Wonder Why? And Other Controversial Essays,
by Thomas Sowell. To order, call 800.888.4741
or visit www.hooverpress.org.

134

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THE GRE AT WA R C E N T E N N I A L

Are We
Reliving 1914?
There are disturbing parallels
and heartening differences.

By Niall Ferguson

ore than a century has passed since the guns of August 1914
ended the era of European predominance with a deafening
bang. Could such a catastrophe recur in our time?
The initial sequence of events after a Malaysian jetliner
was shot down over eastern Ukraine was remarkably similar to the one that
followed the assassination of Austrian Archduke Franz Ferdinand in June
1914. Now, as then, a crisis begins with an act of state-sponsored terrorism.
Now, as then, Russia sides with the troublemakers. Once again, ownership of
a seemingly unimportant region of Eastern Europe is disputed.
In 1914 it was Bosnia-Herzegovina, formerly an Ottoman province,
annexed by Austria-Hungary in 1908 but claimed by the proponents of a
united South Slav state. Today we have not only the annexation of Crimea
by Russia but also the potential secession from Ukraine of Donetsk and
Lugansk, where pro-Russian separatists have proclaimed independent
peoples republics.
Even before the downing of the jetliner, Washington had tightened sanctions against Russia. Both the United States and the European Union then
took the next step, imposing sanctions on whole sectors of the Russian
economy rather than just individuals and specific firms.
Niall Ferguson is a senior fellow at the Hoover Institution and the Laurence A.
Tisch Professor of History at Harvard University.
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[Taylor JonesFor the Hoover Digest]

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At the very least, hope has now been dashed that a post-Soviet Russia could
peacefully be integrated into a Western world order based on free markets and
democracy. At worst, what began as a little local difficulty in eastern Ukraine
could be about to explode into a much larger struggle for mastery in Europe.
WHILE MARKETS SLEPT
So how to explain the relative equanimity of financial markets in the face of
this gathering storm? Blame the historians. To those who subscribe to the
view that the First World War had its origins in distinctive pathologies of
early twentieth-century Europe such as imperialism, militarism, nationalism,
and secret diplomacy, todays crisis is nothing to worry about. For modern
Europeans have renounced imperialism, have all but disarmed themNo one priced in the
selves, feel embarrassed by nationalguns of August 1914.
ism, and conduct their diplomacy via
Twitter rather than secret telegrams.
Even more complacent are those who insist on laying all the
blame for 1914 on Germany. Todays Germans prefer winning
World Cups to losing world wars. In almost every respect, Angela
Merkel, their chancellor, is the historical antithesis of Kaiser Wilhelm II: female, democratically elected, supremely cautious, and
almost comically circumspect when asked what makes her feel
proud to be German. (Our well-sealed windows, she once told
Bild newspaper.)

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Yet the narratives woven by historians over the past hundred years must
be treated with caution. Whether they blame isms or Germans, the majority of academic explanations of the First World War suffer from a fundamental flaw. The purported deep-seated causes seem largely to have been missed
by contemporaries, for whomwith very few exceptionsthe war came as a
complete surprise.
As the year 1914 began, the New York Times looked forward to a growing
rapprochement between Germany, France, and England over the Balkans.
The British horizon in the direction of Germany seems to be clearing, the
Times also reported. In Germany all signs pointed to numerous conflicts between the government . . . and the
Social-Democratic party during the coming
What about the role of
year. Plans were afoot for an international
conference in New York to celebrate one
globalization today in
hundred years of peace among Englishdefusing international
speaking peoples.
conflict? Sorry, you could
Among the best-informed people in 1914
have made the same
were the bankers of the City of London,
argument a hundred years who certainly stood to lose a lot of money in
ago.
the event of a world war. Yet the correspondence of the Rothschilds, then the most
powerful financial dynasty, reveals an almost total failure to anticipate the
scale of the conflagration.
As the Economist reported, it was only on July 31by which time fighting
had begunthat the financial world saw the meaning of war . . . in a flash.
It has become a commonplace idea that todays frothy financial markets
are oblivious to the stream of bad news from Eastern Europe, not to mention
the Middle East. But that does not mean the news is not really bad at all. New
York and London were equally blas about the origins of the First World War.
It was not until three weeks after the Sarajevo assassination that the Times
of London even mentioned the possibility that a European political crisis
might lead to financial instability. Nine days later the stock exchange closed
its doors, overwhelmed by panic selling as investors suddenly woke up to the
reality of world war. Let no one reassure you that this crisis has somehow
been priced in. No one priced in the guns of August 1914.
This should give not only historians pause. If great historical events can
sometimes have causes that are too small for contemporaries to notice,
might not a comparable crisis be in the making today? What exactly makes

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our crisis different? Is it because we now have the United Nations and other
international institutions?
Hardly: with Russia a permanent member of the UN Security Council,
that institution has been gridlocked over Ukraine. Is it because we now have
the EU? Certainly, that eliminates the risk that any Western European state
might overtly take Russias side, as France and Britain did in 1914, but it has
not stopped EU members with significant energy imports from Russia fighting tooth and nail against tougher sanctions.
What about the role of globalization in defusing international conflict?
Sorry, you could have made the same argument a hundred years ago (indeed,
Norman Angell did, in his book The Great Illusion). Very high levels of economic interdependence do not always inoculate countries against going to
war with each other.
LEADERS HAVE CHOICES
Often I am told that the existence of nuclear weapons has reduced the probability of a world war in our time. But even if that were true, it surely does
not apply here. In making their calculations about sanctions, European leaders did not give a moments thought to Russias vast superiority in missiles
and warheads.
A better answer relates to the balance of conventional forcesand the
balance of the will to use them. Since the end of the Cold War, by any meaningful measure, Europeans have disarmed themselves and are incapable of
fighting wars unassisted by the United States. More important, European
peoples have lost their stomach for fighting.
A century ago the overwhelming majority of Britons supported the governments argument that the German violation of Belgian neutrality was a
legitimate casus belliincluding my grandfather, who rushed to enlist.
And today? Even after the downing of the Malaysian jetliner, just one in
ten British voters would favor deploying Western troops to defend Ukraine
against Russia. The fundamental asymmetry in the Ukrainian crisis is that
the Kremlin is able and willing to use military force; Europeansand Americans, for that matterwant to go no further than economic sanctions.
And yet there is another and still better way of explaining the difference
between 1914 and 2014and that is to recognize that what happened a hundred years ago was itself a very improbable disaster, which required a whole
succession of diplomatic and military miscalculations to happen. One way
of making this point is to use computer simulations to rerun the 1914 crisis,

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something which is now possible thanks to the sophisticated strategy game


Making History: The Great War.
Like Muzzy Lanes earlier War of the World game, which allowed players
to replay the events of the Second World War, this game makes it clear that
decision makers are not in the grip of vast, impersonal forces but have meaningful strategic choices. It is perfectly possible to rerun the July 1914 crisis
multiple times and not end up with a world war.
The real lesson of history is that a relatively small crisis over a chunk of
third-rate Eastern European real estate will produce a global conflict only if
decision makers make a series of blunders.
As it happens, I think it is a blunder to use sanctions to give President
Putin no choice but folding or fighting. Butassuming there are no more
downed jetlinersthe price for that blunder will be paid mainly by the people
of Ukraine. The blunders of a century ago led to the deaths of more than ten
million people, mostly young men, drawn from all over the world.
As we commemorate the First World War, let no one swallow the old but
tenacious lie that their sacrifice was a necessary and noble one. On the
contrary, the war is best understood as the greatest error of modern history.
That is a harsh truth that many historians still find unpalatable. But then, as
A. J. P. Taylor once observed, most people who study history only learn from
the mistakes of the past how to make new ones.
H

Reprinted by permission of the Financial Times.


2014 Financial Times Ltd. All rights reserved.
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H O O VER DI GEST WI N TER 201 5

THE GRE AT WA R C E N T E N N I A L

The Afterlives
of Empires
World War I may have destroyed empires, but their
internal tensions lived on. Why todays little wars
are the direct descendants of the Great War.

By Timothy Garton Ash

here is war in Europe. No, Im not using the historic present tense
to evoke August 1914. Im talking about August 2014. What has
been happening in eastern Ukraine is warambiguous war, as
a British parliamentary committee calls it, rather than outright,
declared war between two sovereign states, but still war. And war rages
around the edges of Europe and in Syria, Iraq, and Gaza.
I do not say Europe is at war. I leave the hyperbole to Bernard-Henry
Lvy. Most European countries are not directly engaged in armed conflict.
Still, we should be under no illusions. For decades we have lived with the
comforting notion that Europe has been at peace since 1945. This was
always an overstatement. In parts of Eastern Europe, low-level armed conflict continued into the early 1950s, followed by the Soviet invasion of Hungary in 1956 and of Czechoslovakia in 1968. In the 1990s, former Yugoslavia
was torn apart in a series of warsas a recent report by the EUs special
investigative task force, credibly charging Kosovo Liberation Army leaders
with war crimes, has reminded us.
Timothy Garton Ash is a senior fellow at the Hoover Institution and the Professor of European Studies, director of the European Studies Center, and Gerd
Bucerius Senior Research Fellow in Contemporary History, all at St. Antonys College, Oxford University.
H O O V E R D IG E S T W INTE R 2015

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Kosovo was where I first saw the corpses sticking out of makeshift body
bags and blood in the snow. While that blood was still fresh, I talked to one
KLA commander, Ramush Haradinaj, who memorably observed: Me, I
couldnt be no Mother Teresa. (He subsequently became prime minister of
Kosovo, resigned when indicted for war crimes in The Hague, but was twice
acquitted.) Then I would fly back to Western Europe to find people arguing
over which acronym had kept the peace in Europe. Was it the EU, NATO,
or perhaps the OECD (that is, economic interdependence), the OSCE (panEuropean security structures), or even the UN? The premise was false then,
and is even more so now. There is war in Europe, and around its ragged edge.
For all the differences, the dirty little wars of 2014 have an important
connection to the horrendous great one that began in 1914. Many of them
involve struggles of definition and control over patchwork territories left
behind by the multiethnic empires that clashed a hundred years ago, and
their successor states. Thus, for example, the battle for eastern Ukraine
is about the boundaries of the Russian
empire. Some of the Russians, from RusIn Western Europe,
sia itself, who are now leading the armed
people argue over
pro-Russian movement in eastern Ukraine
which acronym has
have characterized themselves as imperial nationalists. (From their point of view,
kept the peace.
they are not separatists but unionists.)
In a fine piece of satire in the New York Review of Books, Vladimir Sorokin
describes Putins Russia as being pregnant with Ukraine. The infants
name, he writes, will be beautiful: Farewell to Empire.
During the Balkan wars of the 1990s, jigsaw pieces from the Austro-Hungarian and Ottoman empires were fought over and then reassembled into
new, smaller puzzles, such as Bosnia, Kosovo, and Macedonia. Many of the
frontiers on todays map of the Middle East go back to the postFirst World
War settlement, when Western colonial powers spliced together disparate
parts of the former Ottoman empire into new protectorates: Iraq, Syria,
Palestine. The big exception is of course the state of Israel, but that too can
trace a lineage back to the deadly afterlife of European empires. For Nazi
Germany, which attempted to exterminate the Jews, was the last hideous
fling of German racial and territorial imperialism.
So what is Europe going to do now about its own long-term consequences?
The first thing is simply to wake up to the fact that we live in a dangerous
neighborhood. Being Greater Switzerland is neither a moral nor a practical
option: not moral, because Europeans, of all people, should never be silent

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while war crimes are being committed; not practical, because we cannot
insulate ourselves from the effects. Todays fighters in Syria could be tomorrows terrorists in Europe. Todays dispossessed are tomorrows illegal immigrants. Let these little wars burn, and you will be shot down out of the sky on
your way from the Netherlands to Malaysia. No one is safe.
Whereas in the past the irresistible wake-up call was the annexation
of a territory, most Western Europeans slept through Putins Anschluss of
Crimea. As Stephen Holmes and Ivan Krastev point out in Foreign Affairs,
the shooting down of the Malaysian airliner last July was a turning point,
not least because commercial air corridors are the places businesspeople
live. Without that transformative event, it is unlikely that Chancellor Angela
Merkel could have persuaded German public opinion, and German business,
of the need for tougher sanctions on Putins Russia.
But what use is the EUs slow, soft economic power against the Kremlins rapid, hard power? Or, indeed, against all the rapid, hard powers of the
Middle East? What use is butter against
guns? The answer is: more than you
During the Balkan wars of
might think. Europe alone cannot stop
the 1990s, jigsaw pieces
war in the Middle East. Only working
with the United States, and with some
from the Austro-Hungarimore cooperation fromof all places
an and Ottoman empires
Russia, can it bring peace to Syria or
were fought over and then
Gaza. It does, however, have the power
reassembled into new,
to punish Russia for having its artilsmaller puzzles.
lery shell the regular Ukrainian army,
from Russian soil, while that army tries
to reconquer its own territoryand to persuade and enable the legitimate
Ukrainian authorities to make the most generous internal settlement possible as soon as control over its sovereign territory has been restored.
Even the minor sanctions that Europe implemented gnawed away at the
edges of the Putin regime. The larger sanctions Europe agreed to will, with
time, have a larger impact. Liberal democracies are usually more slow to act
than dictatorships, and a voluntary community of twenty-eight such democracies is bound to be slower still. Economic measures take more time to bite
than military ones but they can be more effective in the end.
One hundred years ago we had the guns of August, in Barbara Tuchmans resonant phrase. In 2014 we saw the butter of August. Note the different role played by Germany, then and now. Slowly, step by step, the Berlin
government is doing the right thing. Germany is bringing the unique weight

H O O V E R D IG E S T W INTER 2015

143

of its economic relationship with Russia to bear, while quite reasonably


insisting that the pain is shared with France, Britain, and Italy. Some things
do change. Some even get better.
H

Reprinted by permission.
2014 Guardian News and Media Ltd. All rights reserved.

New from the Hoover Institution Press is


In Retreat: Americas Withdrawal
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144

H O O VER DI GEST WI N TER 201 5

THE GRE AT WA R C E N T E N N I A L

Myths of the
Great War
The statesmen of 1914 knew how terrible the
conflict would bebut they marched all the same.

By Mark Harrison

he events of the Great War continue to resonate around the


world. Most obviously, is China the Germany of today? Will
Chinas rise, unlike Germanys, remain peaceful? The journalist
Gideon Rachman wrote not long ago in the Financial Times:

The analogy [of China today] with Germany before the First
World War is striking. . . . It is, at least, encouraging that the
Chinese leadership has made an intense study of the rise of great
powers over the agesand is determined to avoid the mistakes of
both Germany and Japan.

The idea that Chinas leaders wish to avoid Germanys mistakes is reassuring. But what mistakes do they seek to avoid? We ourselves continue to
debate, and sometimes misunderstand, what mistakes were made, and even
whether they were mistakes at all. This is not reassuring.
Lets review four popular myths of the Great War. These concern misinterpretations of how the war started, how it was won, how it was lost, and
how the peace was made. Each has implications for today.

Mark Harrison is a research fellow at the Hoover Institution, a professor of


economics at the University of Warwick, and an associate of Warwicks Centre
for Competitive Advantage in the Global Economy.
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HOW IT BEGAN: AN INADVERTENT CLASH?


Interviewed last year at Davos, Japanese Premier Shinzo Abe likened modern China and Japan to Britain and Germany in 1913. He noted that strong
commercial ties had not prevented the latter powers from going to war. He
warned against a similar inadvertent conflict.
In fact, the record is clear, despite attempts to falsify it (as described by
historian Holger Herwig). There was no inadvertent conflict. The decisions
that began the Great War show all the signs of agency, calculation, and foresight, including correct anticipation of how others were likely to respond.
Agency is shown by the fact that in each country the decision was made
by a handful of people. These governing circles included waverers, but at the
critical moment the advocates of war, civilian as well as military, were able
to dominate. Agency was not weakened by alliance commitments or mobilization timetables. In its blank check
to Austria, for example, Germany went
far beyond its alliance obligation. Italy, in
The decisions that began
contrast, eventually took up arms against
the Great War show
former allies.
all the signs of agency,
No country went to war for commercalculation, and foresight.
cial advantage. Business interests favored
peace in all countries. Public opinion was
considered mainly when the leading actors worried about the legitimacy of
actions they had already decided on. If capital and labor had been represented in the Austrian, German, and Russian cabinets, there would have been no
war.
What ruled the leaders calculation in every country was the idea of the
national interest, based on shared beliefs and values. All the decision makers were subscribers to a negative-sum game of power, not the positive-sum
game of commerce and development. The Ottoman and Austro-Hungarian
empires were in decline. This triggered a struggle for geopolitical advantage.
The first movers expected that action would be followed by counteraction.
While the ignorant many hoped for a short war, the informed few rationally
feared a longer, wider conflict. They planned for this, acknowledging that
final victory was far from certain.
The European powers understood deterrence. No one started a war in
1909 or 1912at that time they were deterred. War came in 1914 because in
that moment deterrence failed.
Deterrence was weakened by the atmosphere in Berlin and Vienna, which
was far from triumphalist. The German and Austrian leaders believed that

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RATIONAL PESSIMISM: Australian soldiers wearing gas masks wait


in a trench near Zonnebeke, Belgium, in the Ypres sector in September
1917. When the war broke out, German and Austrian leaders, believing
that their enemies were growing in strength, turned into risk-takers.
[Australian War Memorial Photo Collection / Captain Frank Hurley]

H O O V E R D IG E S T W INTER 2015

147

their enemies were growing in strength. They knew that defeat was possible,
but they also feared the future would never favor victory more than the present. This rational pessimism turned them into risk-takers.
The failure of deterrence was an immediate cause of the war. A deeper
cause was the authoritarian regimes of the Central Powers and Russia, under
which a few war advocates could decide the fate of millions in secret.
HOW IT WAS WON: NEEDLESS SLAUGHTER?
Another myth characterizes fighting in the Great War as a needless waste
of life. In fact, there was no other way to defeat the enemy. Attrition was not
a result of trench warfare. Also, casualties on both sides were heavier in the
opening and closing stages (and were heavier still in World War II) when men
fought in the open.
Attrition became a calculated strategy on both sides. From the Allied
standpoint, the rationality of attrition is not immediately clear. The French
and British generally lost troops at a faster rate than the Germans. Based on
that alone, the Allies could have expected to lose the war.
As Stephen Broadberry and I showed in The Economics of World War I, the
forgotten margin that explains Allied victory was economic. This was a war
of firepower as well as manpower. The Allies produced far more munitions,
including the offensive weaponry that finally broke the stalemate on the
Western Front.
HOW IT WAS LOST: THE FOOD WEAPON?
Hunger was decisive in the collapse of the German home front in 1918. Was
Germany starved out of the war by Allied use of the food weapon? In Germany, this myth became prevalent and assumed historic significance in Hitlers
words of 1939, cited in Lizzie Collinghams The Taste of War: World War Two
and the Battle for Food:
I need the Ukraine, so that no one is able to starve us again, like in
the last war.
It is true that Germany imported 2025 percent of calories for human
consumption before the war. Wartime imports were limited by an Allied
blockade at sea and (via pressure on neutrals) on land. At the same time,
German civilians suffered greatly: hunger-related mortality is estimated at
around 750,000.
But decisions made in Berlin, not London, did the main damage to German food supplies. The decision to attack Germanys main food suppliers

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struck the first blow. In 1913, the German economy was more interlinked with
future adversaries than allies. Britain, France, Italy, and Russia accounted
for 36 percent of pre-war German trade. Britain alone provided more German trade than the 12 percent share of Austria-Hungary, Bulgaria, and the
Ottoman empire combined.
German mobilization diverted young
men, horses, and chemical fertilizers from
No country went to war
agricultural use to the front line. Farmers
incentives to sell food were weakened when for commercial
German industry was converted to war
advantage. Business
production and ceased to supply the couninterests favored peace
tryside with manufactures. Government
in all countries.
initiatives to hold down food prices for the
consumer did further damage.
Because trade supplied at most one-quarter of German calories and German farmers the remaining three-quarters, it is implausible to see the loss of
trade as the primary factor. Germanys own war effort probably did more to
undermine food supplies.
HOW PEACE WAS MADE: FOLLY AT VERSAILLES?
Since John Maynard Keynes (The Economic Consequences of the Peace, 1919),
many serious consequences have been ascribed to the Treaty of Versailles.
According to the financier and philanthropist George Soros, for example, the
French insistence on reparations led to the rise of Hitler. Moreover, Soros
continues in a discussion of European debt problems:
Angela Merkels [similar] policies are giving rise to extremist
movements in the rest of Europe.
The burdens on Germany arising from the peace treaty can be assessed
ex ante and ex post. Ex post, there is hardly an issue. Germany actually paid
less than one fifth of the 50 billion gold marks that were due. From 1924
onward, there was no net drain from the Germany economy because repayments were covered by American loans. Eventually, Hitler defaulted on both
loans and reparations.
The ex-ante burden on Germany was certainly heavy, although comparable in magnitude with the public debts that France and Britain carried at the
time. German governments could have covered most of it by accepting the
treaty limits on military spending. Instead, they evaded it by means of a war
of attrition against foreign creditors.

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The Allied pursuit of reparations was unwise and unnecessarily complicated Europes postwar readjustment, but it is wrong to conclude that it
radicalized German politics. The political extremism arising from the treaty
was short-lived. In successive elections from 1920 through 1928, a growing
majority of German votes went to moderate parties that supported constitutional government.
In fact, Weimar democracys bad name is undeserved. It was the Great
Depression that reawakened German nationalism and put Hitler in power.
A DIFFERENT PERSPECTIVE
The history of the Great War has implications for today. Secretive, authoritarian regimes become dangerous when they fear the future. Deterrence
matters. Trench warfare was terrible, but not uniquely so. It is total war that
is terrible and total war cannot be done cheaply. The blockade of Germany
provides one more case study of economic sanctions that have been less
effective than believed by both perpetrators and victims. The Treaty of
Versailles, however unwise, was not a slow fuse for another war. It started a
game of cant pay/wont pay that typically ends peacefully, and would have
done so in this case without the Great Depression.
H

Reprinted from Vox (www.voxEU.org), a publication of the Centre for Economic Policy Research. 2014 VoxEU.org. The full text of Myths of the
Great War is available online as Working Paper No. 188, published by the
Centre for Competitive Advantage in the Global Economy.

Published by the Yale-Hoover Series on Stalin,


Stalinism, and the Cold War is Guns and Rubles:
The Defense Industry in the Stalinist State,
edited by Mark Harrison. To order, call 800.405.1619
or visit http://yalepress.yale.edu/yupbooks/order.asp.

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H O O VER DI GEST WI N TER 201 5

HISTORY A N D C ULT UR E

The Bill
of Wrongs
Visitors to the National Archives, please
check your reverence at the door.

By Andrew Ferguson

t wasnt so long ago that visitors to the National Archives, in Washington, DC, were expected to ascend. A trip to see the nations founding
documents was an uplifting experience, literally. A broad flight of stone
steps drew visitors up from the summer glare and clamor of Constitution Avenue to a porch high above, and from there through great bronze
doors into the cool and quiet of a vast rotunda. Once inside, another rise of
stairs brought them in line of sight of the Declaration of Independence, set
upright in a bronze display case, and a final group of stairs placed them face
to face with the Declaration itself, faded behind glass and washed in a yellow
light. The Constitution was there, too, and the first page of the Bill of Rights.
A fitting payoff for all that climbing.
The Archives is still one of the premier attractions for tourists in Washington, but visitors no longer make such a grand ascent.
Theyre not allowed to. As at the Capitol building and the Supreme
Court, unauthorized citizens can no longer climb the broad staircase outside
to enter through the bronze doorways. Instead, as at the Capitol and the
Supreme Court, they gain access around the back of the building, on the bottom floor, and then once admitted they get to the ceremonial spaces by the
backstairs, like a scullery maid.

Andrew Ferguson is a senior editor at the Weekly Standard.


H O O V E R D IG E S T W INTE R 2015

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Visitors to the Archives will see something new this year, after they pass
through a ground-level, hard-to-find, low-ceilinged entryway bristling with
cops and metal detectors. A few years ago, the philanthropist David M.
Rubenstein donated $13.5 million to build a history museum on the ground
floor. The David M. Rubenstein Gallery opened in December. It should not be
confused with the David M. Rubenstein Leadership Hall, which is at Mount
Vernon, or the David M. Rubenstein
Rare Book & Manuscript Library,
which is at Duke, or the David M.
Historians have been so
busy correcting omissions Rubenstein National Center for White
House History, which is on Lafayette
to American history that
Square, and certainly not with the
theyve lost the thread of the
David M. Rubenstein Family Giant
story theyre supposed to be
Panda Habitat. Thats at the zoo.
correcting.
The gallery houses a permanent
exhibit titled Records of Rights. A
press release says the exhibit is a journey of exploring Americas continual
efforts to perfect liberty and democracy. The journey begins with what
nobody has dared to call the David M. Rubenstein Magna Carta, which
he bought for $21.3 million a few years ago and immediately loaned to the
Archives. On either side of the glass case are translations of the document
and brief, informative histories of what the Magna Carta has meant for the
development of popular government.
A SCAMPER THROUGH HISTORY
This part of Records of Rights is pretty straightforward, refreshingly
so for anyone who has the bad habit of frequenting contemporary history
museums. In keeping with todays curatorial fashion, the Archives museum
is pitched to the intelligence and attentiveness of a slightly unruly 12-year-old
boy. Wide aisles and open spaces accommodate running, skipping, and scampering, and the muted, pinpoint lighting offers many shadows from which
to pounce on unsuspecting classmates. The exhibits are ruthlessly interactivealthough not immersive, which is now the ideal of museum designers. Interactive is a close second, though. At every point our impatient
little prepubescent is confronted with stage-prop doors and touch screens
and passageways and optical illusions and shifting soundscapes and moving images and hand tools and levers on the theory that, because children
like to tap, slam, poke, jiggle, open, shut, hit, throttle, bump, and slide, they
should always and everywhere be encouraged to do so, even on those occa-

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sions when they might be expected to just sit still and shut up. But of course
theres nowhere to sit.
The disarming forthrightness of the Magna Carta exhibit seems like a
ruse in retrospect, for the rest of the museums content is shaped by the
interests and views of academic historians. These days historians are consumed by their indignation at American injustice. Even the most ulcerated
mossbacks have come to see that the
traditional study of US history omitted
many indispensable elementsto cite
The exhibits readily
one fashionable example, the decisive
acknowledge that the
use of colored troops during the Civil
founders and other
War. Historians have been so busy corpowerful white men
recting these omissions that theyve
lost the thread of the main story theyre talked a good game. But
the curators are here to
supposed to be correcting. Records of
Rights is all corrective, a bill of grievmake us wake up and
ances presented by the curators to the
smell the coffee, with
hapless tourists who stumble in from
the goal of perfecting
the glare on Constitution Avenue.
democracy.
Like Gaul, Records of Rights is
divided into three parts. Each part concerns an oppressed group. The first, Bending Towards Justice, depicts the
oppression of African-Americans. The next part, Remembering the Ladies,
depicts the oppression of women. The third, Yearning to Breathe Free,
depicts the oppression of immigrantsthough by this time, as Edward Rothstein noted in a scathing review in the New York Times, youll be at a loss to
come up with a reason why any immigrant would want to come here. Under
the section Equal Rights, we find stories about Jim Crow laws, violence
against Asian immigrants, and discriminatory voting laws. Under Rights
to Freedom and Justice, we find stories about slavery and other forms of
servitude, the Ku Klux Klan and mob violence, and Japanese internment.
American history is truly a glorious pageant.
The exhibits readily acknowledge that the founders and other powerful
white men talked a good game. But the curators are here to make us wake
up and smell the coffee, with the goal of perfecting democracy, as the press
release said. The juxtaposition of artifacts makes the point clear. The curators take care that any glimmer of American idealismsay, the deed to the
Statue of Liberty, included in the immigrant exhibitis quickly snuffed out
with a companion artifact: in this case, the Chinese Exclusion Act of 1882.

H O O V E R D IG E S T W INTER 2015

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The original Nineteenth Amendment is shown, recognizing womens right


to vote. A grand achievement, yes? Look right next to it: the Equal Rights
Amendment, introduced in Congress as a way to end discrimination against
women. America rejected it. Pfffft.
Events of little or no historical significance, however interesting in themselves, are elevated into landmarks simply because they echo the curators
parochialism: the Zoot Suit riots, the Double V campaign by the Pittsburgh
Courier newspaper, Muhammad Alis fight for justice. I am one of many millions of lucky Americans who had forgotten all about the National Womens
Conference in Houston in 1977until I ran into a large section devoted to
The Spirit of Houston, complete with video and still pictures: Attendees
at the 1977 National Womens Conference in Houston are shown here supporting privacy of ones body. At the same time, major strands of American
history are ignored altogether, though they are surely essential to the work of
the Archives. Evidently the major contribution the military made to American life was to get desegregated after World War II. That was the war when
all those Japanese-Americans got interned.
LOOKING DOWN AT THE DOCUMENTS
What About Contemporary Issues? the curators ask at various points in
the exhibit. They answer with a disclaimer that they simply lack the material to deal with current controversies: Most of the records in Records of
Rights were created before 1980 because the National Archives generally
receives permanent records when they are thirty years or older.
Its a sly evasion, for even the most manic twelve-year-old will see current
controversies hovering everywhere around the exhibit, with the unfailing
message that much work remains to be done in our democracy-perfection
project. We learn about the victims in the war on drugs (not innocent
bystanders caught in gang crossfire, but dealers harshly sentenced for selling
crack). The section on womens rights proceeds blow by blow until it reaches
a triumphant culmination: a photograph showing President Obama signing
the Lilly Ledbetter Fair Pay Act in 2009. Pelosi looks particularly happy. And
we get a 1949 letter from Harry Truman to a friend who had criticized the
presidents plan to socialize the nations medical care.
Nobody is working for socialized medicine, Truman writes, in the same
peevish, imperial tone that his admirers call plain speaking. There are
a lot of people like you who need straightening out on this subject. Some
things never change.

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Meanwhile, as they wander from injustice to injustice, visitors will likely


begin to feel the drag of the dcor, which weighs as heavily on the spirit as the
exhibits themselves, for all the bright flourishes of touch screens and video.
Cyclone fencing and cinderblock evoke the immigrant experience; another
fence is intended to show the barriers thrown up against marching suffragettes; badly painted walls of faux brick under a corrugated metal ceiling suggest a segregated bus station in the 1950s Deep South. Stenciled on one wall
are the words PRIVATE PROPERTY. The words are meant to be chilling.
At last visitors do get to ascend, though without grandeur. Off to the side
of the exhibit, opposite the gift shop, a marble staircase leads to the rotunda
where the nations charters are displayed. Earlier generations of curators and
archivists referred to this room as the shrine. Now the word is used ironically
if at all. After the bludgeoning administered by Records of Rights, the chance
to see the Declaration and the Constitution seems less a patriotic mission than
an afterthought. You enter through an unassuming side door. The little steps
that used to raise you to eye level with the Declaration are gone, along with the
imposing bronze showcase that set it above and apart. Now the founding documents are encased hip high, so you can look down on them.
What an attraction for tourists! Ive been to the Archives a few times
lately, and I cant measure the reaction of the Americans who have come
from all over. Are they surprised to learn that the caretakers of the countrys
patrimony are so contemptuous of it? Or is it old news by now?
At least the old grand stairway is still there, outside, on the other side of
the great bronze doors. Its only used as an exit, however, and nowadays the
summer glare and clamor of Constitution Avenue come as a relief.
H

Reprinted by permission of the Weekly Standard (www.weeklystandard.


com). 2014 The Weekly Standard LLC. All rights reserved.

New from the Hoover Institution Press is


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155

H I STORY AND CULT UR E

Rocket Man
Mission Control played Tchaikovsky, the countdown
ended, and then the huge Soviet rocket composed its
own last movementa fireball. A Cold War weapons
designer recalls a darkly comic memory.

By Vitaly Leonidovich Katayev

arshal Kirill Moskalenko, chief inspector of the Ministry of


Defense, often visited the test range, first as commander
in chief of the Strategic Rocket Forces and later as the top
inspector.
The marshal was actively interested in all the events at the test range and
watched over the provision of every amenity, even meals for soldiers and
officers. His inspections were useful in snapping our people into action.
According to test-range folklore, just before one of Marshal Moskalenkos
visits the personnel noticed that the grass in front of headquarters hadnt
been watered for a long time, and it had withered and turned yellow. They
froze in fear: the marshals rage was imminent. A compressor was urgently
summoned and driven to the spot, where it was used to paint the yellow
grass a cheerful green.
I remember Marshal Moskalenko for a different reason.
On this occasion there was scheduled another launch of the R-16 rocket,
which had already sent many people into coffins, including Chief Marshal
of Artillery Mitrofan Ivanovich Nedelin in a notorious accident in October
Vitaly Leonidovich Katayev (19322001) joined the Defense Industry Department of the Central Committee of the Soviet Communist Party in 1975, after fifteen
years as a designer in the Soviet defense industry. He served as deputy head of defense until the department was disbanded in 1993. His papers are deposited at the
Hoover Institution Library and Archives.

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1960. Moskalenko, who came to the pad the day of my recollection, decided to
watch the launch from close proximity, not through a periscope from inside
the bunker.
Usually before a launch, all the residents of the pad were driven out to
the steppe. Test managersboth civilian and militarystayed in the bunker
during a launch. Moskalenko decided to watch this launch from a pavilion
on a hill, about two hundred meters away from the launchpad. This pavilion,
along with a covered caponier near it and a not very deep trench, had been
built earlier for launch observation. However, since the Nedelin accident, the
pavilion had remained empty during rocket launches, now considered too
close to the launchpad. But no one dared to say no to the marshal, and he
took a position in the pavilion together with five or six officers. Gas masks,
field glasses, and mineral water were delivered. The breeze blew favorably
from the pavilion towards the launchpad.
The weather was sunny and excellent.
As the leading designer, I was delegated A rocket poised on
the pad is alive and
to the pavilion to answer any possible
questions by the marshal. There was no
capricious, unpredictable
need for this, but I was very pleased about
and dangerous.
it: at last, my long-standing desire had
It can murder or reward,
come true to watch the rocket launch from
with a will of its own.
a close distance. Another of our test operators, Anton Bondarenko, tagged along with
me. He had been disabled from childhood, when both his legs were cut off by
a streetcar. Anton carried his massive body on crutches. He stumbled along
to the pavilion and apologized for being late. He had had to catch a ride since
walking on crutches doesnt get one very far.
The launching pads diesel power stationinsurance against a power
shortagehummed monotonously. Few people were left around the pad. Colonel Aleksandr Kurushin, the chief of launching pad number 43, announced
his famous line to the whole place: I am Kurushin. I go into the bunker!
As was the tradition, Tchaikovskys Piano Concerto no. 1 started to play.
This signaled the thirty-minute warning. Rockets and Tchaikovsky: what
was the connection? And why Tchaikovsky and not Scriabins Prometheus, for
example? Or Bachs organ music? Or that of some other composer? And why
was music needed here at all? I took a long time to consider various combinations. I played the music in my head.
What is a rocket on a launchpad for a human? Its a whole kaleidoscope of
sights, emotions, hopes, frustrations, and wild happiness. The rocket is a con-

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centrated essence of concerns and the labor of tens of thousands of people. In


some ways, it is their common idol. It is alive and capricious, unpredictable
and dangerous. It can murder or reward, with a will of its own. And everybody waits to see how this idol will choose to act.
And what does the launchpad look like before a rocket launch? It is a completely empty place, with no people. Tension is in the air. Powerful spotlights
hang from masts, as at a stadium. There is the girded platform of the launch
table in the center of the pad. Brightly lit, the white obelisk of the rocket
points up against a sky that is black at night or blue by day. Each of its slaves
handles the idol with tenderness and love, wearing white coats and white
gloves. This was the only way they worked at the assembly workshop. Once
the rocket goes into serial production and becomes tamed, like a seemingly
docile lion, it will be allowed to dress in green, which is the more typical color
of its masters.
At the entrance to the launchpad, where the fueled rocket was standing,
each friend of the rocket was given a heat-resistant steel bracelet with a
stamped number. Many people had been simply incinerated during the previous catastrophe, and it had been difficult to identify them. But now everyones ashes would be numbered.
Everyone behaved differently before the launch. The brain cannot easily
contain so many emotions at once. Some exhibited heightened chattiness and
exaltation, with unnecessary gestures. Others developed an inner shivering,
a vibration. When the first sounds of the piano were heard at the launchpad,
people somehow shook off part of this heavy load of emotions. This music
was chosen by a very smart man.
I can relive the moment still. In the pavilion, we are listening to Tchaikovsky. A public address system reaches there. The five-minute warning is
announced. Moments later, Tchaikovskys music is muted. An announcement
comes over the loudspeaker: Pull down!
Aye, aye, pull down, the telemetrists respond.
This means that telemetric recording tape would be slightly pulled aside
so that there would be a few seconds of emptiness marking the start of the
launching process; they are now ready to pull their recording tapes, starting
with a new tape.
Key to launch! the announcer barks again.
Aye, key to launch.
Launch!
Aye, launch!

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[Taylor JonesFor the Hoover Digest]


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A muffled burst. A rusty cloud rushes away from the rocket. Talk inside
the pavilion stops. We wait tensely for the sharp nose of the rocket to appear
from out of the cloud.
Do it, do it! we cry.
Bending down with tension, we seem to be trying to pull the rocket up by
hand.
Come, baby, come! we plead.
But theres no rocket! No rocket! Its not there! One second after another
ticks by as we try to comprehend what is happening. No! The rockets
engines are ondid it fail to lift itself up? What is holding it? Fingers clutch
the pavilions handrails.
Go, darlin, go! we cheer vainly.
The wind blows the launch cloud away a bit, and it becomes more transparent. One can see very well: the rocket has left the launchpad and is moving just above the ground. Only two out
of three engines of the rockets first stage
A rusty cloud rushes
have started. The effort of two engines is
away from the rocket.
insufficient for a flight, but the rockets
control system is keeping it vertical with
We wait tensely for the
the finesse of a balance master. Thus,
sharp nose of the rocket
vertically, with strain, sobbing, blowing
to appear from out of the
away the sand with the engines stream,
cloud.
the rocket floats just above the ground,
slightly wagging its hipsthe protruding
cowling of the control thrusters. To this day, it is unforgettable.
Oh! The rocket is dancing a death tango! Put the music on! we exclaim.
The public address loudspeaker is silent. The rocket flies, but where?
Operators havent sorted it out yet, confused by the telemetric data. Finally,
they find the formula, and a stumbling voice cuts through the loudspeaker:
The rocket is in movement!
But the rocket is moving towards the pavilion. Toward us! Not too fast,
but it is getting closer.
There is motion in the pavilion. The marshals entourage is the first to rush
out of the pavilion and head haphazardly down the path. Their general direction
is away from the rocket. I dash to the nearest shelter, jumping over the trench.
Somebody dashes behind me. I dont see who it is, but the back of Bondarenkos
white shirthe manages to find a place for himself face down in a narrow
trenchis marked with a dirty shoe print. Somebody has run across Antons
back, over the trench. Later, Anton would curse that person but find it funny.

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I dive into an open door and immediately jostle my way close to the thick
reinforced glass and lean on it with both hands: where is the rocket? I just
have time to take in the awful scene: blowing sand up with a fiery stream and
a muffled roar, the rocket stumbles against a pile of metal railings around the
launchpad with its bottom part and falls on its side.
The explosion rocks us. A brown cloud, spinning fast, rolls up and sideways but does not reach the pavilion. The wind helps direct it away. Besides,
the pavilion was built by experts. I look carefully where the explosion cloud
has moved, away from us. Good! Luck is with us! All this unfolds in a few
seconds (reading about it takes much longer).
I crawl out. Silence. Anton, stuck in the trench, is already unbending himself.
I can do it myself! he protests. Some reptile stepped
Stepped on what?
On his back! I help him get out. He tries to explain something but stutters
more than usual.
I just wave my hand: its time to get
Straining, sobbing,
back to the pavilion to see what is going on
blasting away the sand
there.
A grand performance is on: the last act,
with the engines stream,
the finale of a tragicomedy!
the rocket floats just
It turned out that during all these
above the ground, slightly
events Marshal Moskalenko didnt move
wagging its hips.
from his place. True, I could not imagine this marshal running away from any
threat, even if his life depended on it. He was strict, always pompous and
slow, sparing his movements, over sixty years old. Surely Moskalenko saw
the rocket moving toward him perfectly well. Maybe a thought such as this
crossed his mind: this rocket is a killer of marshals and commanders in chief
of the Strategic Rocket Forces; it will kill a second marshal, this time me. Not
bad for history!
But who knows what Moskalenko thought at that moment. The marshal
did not run. He remained standing still, alone in the pavilion. Thank God: fate
kept the marshal safe when the rocket didnt reach the pavilion. Interesting
did he believe in God?
And now, half turning, Moskalenko silently looked from above at the
runaway officers who had deserted him; they were returning to the pavilion,
shrunken and staring at the ground.
The marshal didnt say a word of reproach. He said nothing about this
case to managers of the test range. I dont think he shared it with anybody at
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the Ministry of Defense, lest the information reach the Central Committee.
They might have disapproved, saying, Why did you go there? They might
have considered his bravery to be vain bravado. They have their own rules at
the Central Committee, after all. But the marshals silence spoke louder than
words.
H

Excerpted from A Memoir of the Missile Age: One Mans Journey, by Vitaly Leonidovich Katayev (Hoover Institution Press). 2014 by the Board
of Trustees of the Leland Stanford Junior University. All rights reserved.

Forthcoming from the Hoover Institution Press is A


Memoir of the Missile Age: One Mans Journey, by
Vitaly Leonidovich Katayev. To order, call 800.888.4741
or visit www.hooverpress.org.

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HISTORY A N D C ULT UR E

The Quiet Sea?


Calm may reign around the Mediterranean,
but peace on these historic shores is
far from inevitable.

By Victor Davis Hanson

rom the deck of a ship on the Mediterranean, the islands that pass
by appear as calm as the weather. Huge yachts, not warships, are
docked in island ports. I havent seen a naval officer in ten days.
But it has rarely been so in the seas brutal past.
The Mediterranean (in the middle of the earth) has been historys
constant cauldron. It provided too-easy access between three vastly different
and usually rival continents: Asia, Africa, and Europe. And it helped birth
and spread three major and often warring religions: Judaism, Christianity,
and Islam. Without it, there would have been no Roman or Ottoman empire.
Most of the Mediterraneans history, then, is of abject violence. The unfortunate islands situated in the seas vortexespecially Cyprus, Crete, Malta,
and Sicilywere invaded, occupied, and fought over constantly by Greeks,
Romans, Byzantines, Venetians, Franks, Ottomans, British, Italians, and
Germans. To chronicle these islands history is to study massive castles and
walls, which are still what first greet any visitor to port. The Ottoman siege
of Famagusta on Cyprus, the defense of Malta by the Knights Hospitaller, the
German air drop on Crete, and the Allied invasion of Sicily mark some of the
most audacious battles in military history.

Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow at the
Hoover Institution and the chair of Hoovers Working Group on the Role of Military History in Contemporary Conflict.
H O O V E R D IG E S T W INTE R 2015

163

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Gibraltarwhich governed
who made it into the Mediterraneanand Constantinople
which determined who went in
and out of the Black Seawere
often the linchpins of empire.
With the completion of the Suez
Canal in the nineteenth century,
the Mediterranean revived in
the industrial age, as the canal
soon would become Europes
shortcut to the oil fields of the
Middle East.
For the past seventy years,
the Mediterranean has been
quieter than at any other time
in its long historyat least
since the second century AD,
during the reign of the five
so-called good emperors of
Rome, when all the shores of the
three continents were tranquil
and interconnected by what the
Romans called mare nostrum,
our sea. Why?

WINDS OF HISTORY: ClaudeJoseph Vernets painting A


Storm on a Mediterranean
Coast (1767) depicts an
angry sea and shipwrecked
survivorsa scene that would
seem unfamiliar to sailors
plying todays Mediterranean.
From the very beginnings of
the American experiment, the
Mediterranean had an odd
ability to draw Americans into
its turmoil.
[Claude-Joseph Vernet / J. Paul Getty Museum]

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Largely because of American warships. Except for the Turkish invasion of


Cyprus in 1974 and occasional violent spillage offshore of the various Middle
East wars, the US Sixth Fleet, based in Naples since shortly after World War
II, has been able, with its NATO partners, to keep pirates out, aggressors
down, and peaceful nations in.
Amid the current violence of the Arab Spring on the shores of North
Africa, the Middle East fighting in Gaza and Syria, and Russias aggression in
Crimea, the Mediterranean nevertheless remains calm. No one today thinks
of storming Malta, as did the Ottomans and the Nazis. Sicily is quiet in a way
it never was before 1945. Cretans fear neither Muslim invaders nor German
paratroopers. Unlike elsewhere on the seas of the worldthe rising tensions
in the South China Sea, Irans ascendance in the Persian Gulf, the piratical
raids on the Red Seathere are no active
troublemakers on the Mediterranean.
Will that always be so?
No one today thinks of
If the United States recedes and lowers
storming Malta, as did the
its naval profile, it is not hard to see how
Ottomans and the Nazis.
the Mediterranean could once again heat
up. Amid the relative peace of a divided
Cyprus, we forget that the islands fate has never been resolved. An increasingly Islamist Turkey is becoming neo-Ottoman in its relationship to Greece
and Israel. If Vladimir Putins Russia continues to rebuild its military as
the United States continues to downgrade its own, it is not hard to envision
Russian ships leaving their now-permanent Crimean ports on new missions
out of the Dardanelles. China is expanding all the way to African and South
American shores, but it so far keeps out of the Mediterranean. But will it
always? Iran is wary of sending its warships into the Mediterranean only
because of the US fleet.
The great European fleets of the pastthe Spanish, the French, and the
Britishare shadows of their former selves. Some of the worst violence in
the world todaythe civil war in Syria, the bloodletting in Libya, the war
in Gazatakes place on the shores of the Mediterranean, but so far has not
spread to sea.
Americans might think the Mediterranean is too distant to care much
about. But from our very beginnings that sea had an odd ability to draw us
into its turmoil. To the shores of Tripoli is a refrain known to most Americans, and we also remember the Barbary Coastthe scene of our nations
first foreign fights and our most recent, in Benghazi. The first landing of
American soldiers against Germany during World War II was in North

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H O O VER DI GEST WI N TER 201 5

Africa, not too far from where Ronald Reagan ordered the Air Force to bomb
Libya.
As we dismantle our military, we should remember that historys natural
order of things unfortunately is not peace, but instability and war. Peace, as
a character in Platos Laws remarked, is a brief parenthesis. It occasionally breaks out because aggressors are deterred by the superior military
forces of those committed to the general peaceand all nations understand
the consequences of weaker aggressive nations stirring up trouble. Barack
Obama is relearning that ancient lesson as he sends forces back into Iraq
against Islamic extremists (whom he once foolishly dismissed as jayvees)
after he needlessly pulled all deterrent US peacekeepers out of the country
and squandered an inherited quiet.
We can see the results of the new lower profile of the US fleet also in the
South China Sea, as Japan squares off against China, and South Korea, Taiwan, and the Philippines anxiously watch. As the world heats up, and as the
US global deterrent forces erode, there is no intrinsic reason why historys
most contested sea might not be so again. We should remember that when
we talk of defense cuts, and before we pull too many American ships out of a
maritime intersection where peace has usually been the exception.
H

Reprinted by permission of National Review Online. 2014 National


Review, Inc. All rights reserved.
New from the Hoover Institution Press is
The Struggle for Mastery in the Fertile Crescent,
by Fouad Ajami. To order, call 800.888.4741
or visit www.hooverpress.org.

H O O V E R D IG E S T W INTER 2015

167

H O OVER ARCHIVE S

So Many Others
Stood Silent
Jan Karski brought the Holocaust to the worlds
attention and fought to free Poland, his homeland.
He also amassed historical treasure
for the Hoover Archives.

By Nicholas Siekierski

an Karski, born in the year the First World War began, grew up
to play an extraordinary role in the second. As a Polish resistance
fighter and secret courier, Karski led a life of courage and commitment, capped with a lasting contribution to historical memory.
Karski, who died in 2000, was posthumously awarded the Presidential
Medal of Freedom in 2012 by President Barack Obama for acts of exceptional
bravery during the war. Among these were four secret missions he undertook for the Polish Underground State, all before the age of thirty, to inform
Western leaders, including President Franklin D. Roosevelt personally, about
the barbaric acts being committed by the Nazis in Poland and the beginnings
of the Holocaust.
Less well known is his legacy as one of the great builders of the Hoover
Institution Library and Archives. After the war, Karski was commissioned by
Herbert Hoover to develop its collections, and thanks to his efforts the Polish

Nicholas Siekierski is a former assistant archivist and exhibit and outreach


coordinator at the Hoover Institution Library and Archives. He is pursuing his
doctorate at the Tadeusz Manteuffel Institute of History at the Polish Academy of
Sciences in Warsaw.

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The bestselling Story of a Secret State, published in 1944, recounted the


experiences of Jan Karski (19142000) as a courier for the Polish Underground State. The memoir is still in print seventy years after it
was published. [Hoover Institution ArchivesJan Karski Papers]

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and Baltic collections are the richest of their kind outside of their respective
countries. Karski also donated his own papers to the institution.
Karskis life story is mainly known from his own reminiscences, the bestselling Story of a Secret State, published in 1944, which recounts his experiences as a courier for the Polish Underground State. Born Jan Kozielewski
in Lodz in 1914, he attended university and became a civil servant. When
Germany occupied Poland, he joined the Home Armythe dominant resistance movementtook the nom de guerre Karski, and began a series of secret
missions to report to the Polish government in exile, first in France and later
in Britain. During one mission he was captured by the Gestapo, was tortured,
and attempted suicide to avoid disclosing any secrets. He was rescued from a
hospital by Polish underground fighters.
In his most important mission, in fall 1942, he was smuggled into the Warsaw ghetto to meet with Jewish leaders and witness the atrocities committed
against Polands Jews. Karski, a Roman Catholic, also entered a transit camp
for Jews on their way to the Belzec concentration camp. When he reached
Britain, Karski briefed a host of officials, including Foreign Minister Anthony
Eden. During a visit to the United States months later, he gave a harrowing
account to President Roosevelt about conditions in Poland and the plight of
the Jews.

RESCUING THE ARCHIVES
The name of Herbert Hoover, the great philanthropist and honorary citizen
of Poland, was once known to each Polish child. Jan Karski also knew this
name. He was pleasantly surprised in March 1945, during his lecture series in
New York on the Polish Underground State, when Hoover took an interest in
him. Hoover recognized that Karski, thanks to his heroic past and the fame
gained through his book, enjoyed the widespread trust of Poles and would
be able to help the Hoover Library amass Polish publications and wartime
archives. Karski, then living in New York, was captivated by this proposition
and accepted the position of special acquisitions agent and representative of
the Hoover Library. It came with a budget (substantial for that time) of $250
per month and money for travel and expenses.
Karski obtained this appointment with the approval of Polish Ambassador
Jan Ciechanowski, with whom Herbert Hoover had been in discussions about
securing the archives of the Polish embassy in Washington, DC, and other
Polish governmental archives. It was expected that the United States would
shortly withdraw recognition of the Polish government in exile in London.

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Karski undertook four missions for the Polish Underground State, all
before the age of thirty, informing Western leaders, including President
Roosevelt himself, about the barbaric acts committed by the Nazis in
Poland and the beginnings of the Holocaust. [Hoover Institution Archives
Jan Karski Papers]

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Karski established strong contacts with Polish migr groups in the United States and corresponded with others in London. He also became involved
in Lithuanian, Latvian, and Estonian migr politics. The first shipments
of Polish materials collected personally by Karski or his London assistant,
Jzef Garlinski, began flowing to Stanford: books, periodicals, photographs,
microfilm of the underground press, and other documents. By the end of
1945, when Karski returned to Europe, there had been thirty such shipments,
totaling several tons.
The war in Europe was over and the cause of Polish independence, the
cause to which Karski had dedicated six years of his young manhood, was
lost. In early summer 1945, the founding conference of the United Nations
was ending in San Francisco without the participation of Poland. In Moscow,
sixteen leaders of the Polish
underground were on trial.
Jan Karski was posthumously
That summer, Karski
awarded the Presidential Medal of
raced to preserve the records
of the government in exile. In
Freedom in 2012 for exceptional
a June 30 telegram to London
bravery during World War II.
he wrote: The Hoover
Library repeats the question as to whether the Polish Government will relinquish the sealed Polish
archives, materials, and documents in their entirety or in part for safekeeping. This is the best political and technically advanced repository in the
world.
In reply, Minister of Foreign Affairs Adam Tarnowski telegraphed to
Ambassador Ciechanowski: UrgentI ask you Mr. Ambassador for all the
help you can provide to make possible Karskis urgent flight to London for
one week.
Unfortunately, there was no time for urgent discussions and trips. On
July 5, the United States and Great Britain withdrew their recognition of the
Polish government in London. France had withdrawn recognition on June
29. According to Karski, the last coded telegram from London to the Polish
Embassy in Washington ordered the entire archives of the embassy transferred to the Hoover Library. The embassy complied, sending nineteen crates
to Stanford University. They contained the archives not only from Washington but also from the embassies in London and Moscow-Kubyshev, which had
already been shipped from Europe for this purpose.

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A Karski Eagle was awarded in 2009 by the Jan Karski Society to the
Hoover Institution for its unique efforts to rescue and preserve the archival
legacy of independent Poland. The award is meant to recognize humanitarian service to others, with a special connection to Poland.
[Hoover Institution ArchivesJan Karski Papers]

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SEARCHING FAR AND WIDE


Karski tried to adapt to the seemingly final collapse of the Polish cause. First
he got married. The New York Times reported that on July 29, 1945, Karski
married Isabel Kerpel-Fronius, the ex-wife of a Budapest lawyer and daughter of the Venezuelan ambassador, Diogenes Escalante. Nonetheless, within a
short time he had renewed his consular efforts, which would make possible a
trip to Europe. Since his migr Polish passport was no longer valid, he took
another step toward the changed reality: he obtained a new passport issued
by the new pro-Soviet authorities in Poland.
On the eve of his departure for Europe, Karski declared to Herbert
Hoover his willingness to visit not only England, France, Italy, and Switzerland, but even Poland, believing that the very name of the Hoover Library
was sufficiently impressive to extricate him from any jail in case he is
arrested. His employers firmly discouraged him from such a trip, judging
that nothing he could find in Poland would be worth the risk. Undoubtedly
they were rightdozens of other former Polish officers, returning from the
West, paid with their lives.
Karski left for Europe aboard the Queen Elizabeth on December 30, 1945.
In his first letter from London, Karski expressed his delight that, thanks to
Hoovers recommendation, he had been treated with special privileges by the
captain and was able to chat with passengers such as Eleanor Roosevelt and
Senator Arthur Vandenberg.
His six months in Europe, including England, France, Italy, and Switzerland, were very productive. In London, he enlisted the aid of a lieutenant of
the Home Army, Jzef Garlinski, future distinguished historian of World War
II and the Polish underground, as well as his wife, Eileen, an Irishwoman who
was also a Home Army veteran. The Garlinskis helped Karski schedule meetings with dozens of peoplePolish government officials and staff, well-known
representatives of Polish Londonand expedite materials to California.
Karski arranged for the Hoover Library to hire Garlinski as an agent-acquisitor for the next two years. Garlinskis daily notes, made for Karski, are a
gold mine of information about migr life in London at the time. Karski also
struck preliminary agreements regarding archives of the Ministry of Foreign
Affairs and the Ministry of Information and Documentation that were temporarily stored in Dublin. (These documents did not make their way to Hoover
until the end of the 1950s, after Ireland finally withdrew recognition of the
then-symbolic Polish government in London.)
The main achievement of Karskis trip to Italy were meetings with General Wadysaw Anders and documentation officers from the Second Polish
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Corps, the exile force Anders commanded. Anders agreed to deposit microfilms of his archives, but because of logistics issues, time ran out to microfilm
the materials. In the end nearly the entire documentation of the Polish armed
forces was transferred in its original form to the Hoover Library via transports from Naples, Ancona, and Cairo several months after Karski returned
to the United States in July 1946.
Thanks to Karskis European expedition, the Hoover Library became the
largest and richest repository of archival documentation related to modern
Polish history outside Poland. A large part of the collections were closed to
researchers, typically for twenty years. Even so, the number of open collections was so great that the library had to hire workers to organize and
describe them. Former president Hoover thought Jan Karski was the best
candidate to lead this effort. Karski, however, wasnt interested. After seven
years of wandering and struggles, in his words, he yearned for a change.
Karski opted to move to Venezuela. Within a few years, though, he seemed
ready to uproot himself again. In fall 1948 he visited the office of the representative of the Hoover Library in New York. Several weeks later he wrote
from Caracas to Harold Fisher, director of the library, saying he wasnt cut
out for business in South America and was thinking of returning to the
United States for a doctorate and an academic career. Fisher could not offer
Karski work in the library because the Polish position had been taken by
another migr Pole, but Fisher did encourage him to apply to Georgetown
University. Karski wrote once more to Fisher in December 1949, expressing optimism and gratitude for his good advice. He had spent two semesters
as a teaching assistant in the political science department, lecturing on the
political climate in Eastern Europe, and also was working on his doctorate.
I should have done this long ago, he wrote. Karski went on to earn his PhD
from Georgetown and teach there for forty years.
MEMORIES AND SCARS
At the Hoover Institution, the memory of Jan Karski and his achievements
has faded. In 1988, my father, Maciej Siekierski, curator of the Eastern European Collection at Hoover, was working on an article for the Polish Review.
In the documentation of several Hoover collections he came across references to Karski. He established contact and maintained it through the last
ten years of Professor Karskis life. He visited Karski several times in Chevy
Chase, Maryland, and in turn Karski visited the Hoover Institution in 1995.
During that visit the former secret courier once again saw a large part of
the documents that he had hand-packed for shipment half a century earlier.
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He was delighted with the conditions in the Hoover Archives and the full
access to his acquisitions. He was also very happy to hear that Hoover was
in the final stages of organizing its Polish government collections, microfilming them and planning to transfer the films to Warsaw. He determined that
the Hoover Institution was the only proper place to deposit his own papers,
which he formalized in his will.
My father visited Karski for the last time in December 1999, just after the
formal transfer of the first group of Hoover Polish microfilms, about a million frames, to the Polish minister of foreign affairs, Bronisaw Geremek, in
Warsaw. Karski was visibly moved. My father also brought with him a formal
invitation from the director of the library and archives for a longer stay at
Hoover in the coming year. Unfortunately, Karski never made the visit. He
died on July 13, 2000, at the age of eighty-six.
I met Jan Karski in Maryland when I accompanied my father on one of
his collecting trips. I was only a boy and didnt fully appreciate whom I was
meeting. I remember his light-blue eyes and his face, which despite scars
from the beating and torture he suffered in the war, exuded poise and a sense
of nobility. When he was as old as I am now, in 1942, he had already survived
a brutal interrogation by the Gestapo and was preparing for his most famous
mission. He had witnessed the horrors of the Warsaw ghetto, meeting with
leaders of the Jewish Bund and seeing the Holocaust firsthand. He had
informed Allied leaders, briefing President Roosevelt personally, of the plight
of the Jews and appealed for those leaders help. He bore physical and mental
scars of his experiences for the rest of his life. As President Obama said in his
proclamation awarding Karski the Medal of Freedom, So many others stood
silent.
H

Special to the Hoover Digest.


Available from the Hoover Institution Press is
In Search of Poland: The Superpowers Response
to Solidarity, 19801989, by Arthur Rachwald.
To order, call 800.888.4741
or visit www.hooverpress.org.

176

H O O VER DI GEST WI N TER 201 5

A bronze statue of Jan Karski looks out over Survivors Park in Lodz,
Poland. A similar sculpture sits outside the former New York consulate
of the wartime Polish government, as well as in other cities in Poland,
the United States, and Israel.[Zorro2212 / Creative Commons]

H O O V E R D IG E S T W INTER 2015

177

On the Cover

his striking poster is a scene of frozen action: two deer suspended


mid-leap, a car braking in a dark forest. Dont Kill Our Wild Life
is an admonition of its timea time of faster cars, more extensive
highways, and increasingly popular national parks. It was also a time
when peoples artuplifting yet practical messages paid for by the governmentwas everywhere. This image, created by John Wagner for the National
Park Service, was part of a torrent of posters, sculptures, murals, and other artwork produced during the Depression years. America paid thousands of artists
to work, but at the same time argued over the role of public-supported art.
The Works Progress Administration created jobs for some 8.5 million
Americans in the 1930s. Those workers built roads and bridges, parks,
schools, and airports. The WPA also operated an art division, the Federal Art
Project, whose New York division printed this safety poster. (The projects
predecessor, the Public Works of Art Project of 193334, is remembered
fondly in San Francisco for the murals in Coit Tower, the PWAPs biggest
job.) The poster was produced via serigraphy, or silk-screening, a technique
adapted in the 30s to revolutionize mass production of the WPAs posters.
The WPA posters had no signature style but exploited asymmetrical formats, innovative lettering, and color that ranged from subtle to eye-slapping,
according to an article in Civilization magazine. Since the client was the
government, with no product to sell but information, artists could be bold.
They were bold in other ways, too. Facing thousands of layoffs in the federal program in the mid1930s, thirty-seven artists picketed director Audrey
McMahons New York headquarters in May 1936, demanding work. Turned
away, they decided to invade and occupy her office. Police dragged them
away. Artists also went on strike, held parades, and protested. More than two
hundred were arrested in the so-called relief riots of December 1936 called
to oppose looming layoffs. (The federal art project would survive until 1943.)
Government-sponsored art had fervent supporters and enemies. Pleading for continued funding in 1936, Ralph M. Pearson wrote that art is being
pulled out of the studio, the museum. . . . It is at work in buildings. It is being
used! Historian and critic Lewis Mumford wrote in the New Republic, These
projects have given the artist a home.
178

H O O VER DI GEST WI N TER 201 5

But when a traveling WPA


art exhibit arrived in San Francisco in 1937, one viewer was
highly critical: Currently within
the walls of the Legion are New
Horizons, a survey of WPA
arthorizons, which are too
obscured and bleakhorizons
befogged with lack of clarity,
understanding, or feeling, wrote
Leo S. Gosliner.
Another critic, translator
Harry Lorin Binsse, backed
public funding in principle
but warned that Uncle Sam
shouldnt be fairy godmother to
a lot of untalented escapists who
get self-satisfaction from smearing paint on canvas.
A WPA report from 1936 made this curious observation: The federal art
project has already brought about a healthier psychological attitude among
artists, who now feel themselves to be, as never before, a normal part of
society.
Healthier how? All along, some Americans had seen the WPA overall
and the art projects in particular as too friendly to socialism, even Soviet
dogma. Americans fought over how much, and whether, the US government
should support such potentially subversive ideas. But it was good to keep
Americans working. Thus, in one view, federal money was putting the disaffected artists to work both for the nations good and their own.
The late 1930s saw the controversy climax with the mellifluous CoffeePepper Bill, which sought to make government support for the arts permanent. Congress did not pass it.
By the time it shut down in 1943, the Federal Art Project had helped
launch the careers of such alumni as Jackson Pollock, Willem de Kooning,
and Mark Rothko. Debates over federal arts funding continue today.
Wagners highway safety poster is still widely reproduced and admired for
its cool elegance. A few years back an artist reworked it with a hulking silhouette replacing the prancing deer. The new slogan: Watch for Bigfoot.

Charles Lindsey
H

H O O V E R D IG E S T W INTER 2015

179

HOOVER INSTITUTION ON WAR, REVOLUTION AND PEACE

Board of Overseers
Chair
Thomas J. Tierney

Vice Chairs
Boyd C. Smith
Thomas F. Stephenson

Members
Marc L. Abramowitz
Victoria Tory Agnich
Jack R. Anderson
Barbara Barrett
Robert G. Barrett
Donald R. Beall
Stephen D. Bechtel Jr.
Peter B. Bedford
Peter S. Bing
Walter E. Blessey Jr.
Joanne Whittier Blokker
William K. Blount
James J. Bochnowski
William K. Bowes Jr.
Dick Boyce
James J. Carroll III
Robert H. Castellini
Rod Cooper
Paul Lewis Lew Davies III
John B. De Nault
Steven A. Denning*
Dixon R. Doll
Joseph W. Donner
Herbert M. Dwight
Gerald E. Egan

180

Charles H. Chuck Esserman


Jeffrey A. Farber
Henry A. Fernandez
Carly Fiorina
James E. Forrest
Stephen B. Gaddis
Samuel L. Ginn
Michael Gleba
Cynthia Fry Gunn
Paul G. Haaga Jr.
Arthur E. Hall
Everett J. Hauck
W. Kurt Hauser
John L. Hennessy*
Warner W. Henry
Sarah Page Herrick
Heather R. Higgins
Allan Hoover III
Margaret Hoover
Preston B. Hotchkis
Philip Hudner
Gail A. Jaquish
Charles B. Johnson
Franklin P. Johnson Jr.
Mark Chapin Johnson
John Jordan
Steve Kahng
Mary Myers Kauppila
David B. Kennedy
Raymond V. Knowles Jr.
Donald L. Koch
Richard Kovacevich
Henry N. Kuechler III

H O O VER DI GEST WI N TER 201 5

Peyton M. Lake
Carl V. Larson Jr.
Allen J. Lauer
Howard H. Leach
Walter Loewenstern Jr.
Frank B. Mapel
Shirley Cox Matteson
Richard B. Mayor
Craig O. McCaw
Bowen H. McCoy
Burton J. McMurtry
Mary G. Meeker
Roger S. Mertz
Jeremiah Milbank III
Mitchell Milias
David T. Morgenthaler Sr.
Charles T. Munger Jr.
George E. Myers
Robert G. ODonnell
Robert J. Oster
Joel C. Peterson
James E. Piereson
Stan Polovets
Jay A. Precourt
George J. Records
Christopher R. Redlich Jr.
Kathleen Cab Rogers
James N. Russell
Roderick W. Shepard
Thomas M. Siebel
George W. Siguler
William E. Simon Jr.

H O O V E R D IG E S T W INTE R 2015

James W. Smith, MD
William C. Steere Jr.
W. Clarke Swanson Jr.
Curtis Sloane Tamkin
Tad Taube
Robert A. Teitsworth
L. Sherman Telleen
David T. Traitel
Victor S. Trione
Don Tykeson
Nani S. Warren
Jack R. Wheatley
Paul H. Wick
Norman Tad Williamson
Richard G. Wolford
Marcia R. Wythes
*Ex officio members of the Board

Distinguished Overseers
Martin Anderson
Wendy H. Borcherdt
William C. Edwards
Robert H. Malott

Overseers Emeritus
Frederick L. Allen
Susanne Fitger Donnelly
Bill Laughlin
John R. Stahr
Robert J. Swain
Dody Waugh

181

The Hoover Institution gratefully acknowledges the support of


its benefactors in establishing the communications and information
dissemination program.
Significant gifts for the support of the Hoover Digest
are acknowledged from

Bertha and John Garabedian Charitable Foundation


The Jordan Vineyard and Winery
Joan and David Traitel
u u u

The Hoover Institution gratefully acknowledges generous support


from the Founders of the Program on
American Institutions and Economic Performance

Tad and Dianne Taube


Taube Family Foundation
Koret Foundation
and a Cornerstone Gift from

Sarah Scaife Foundation


u u u

Professional journalists are invited to visit the Hoover Institution to share


their perspectives and engage in a dialogue with the Hoover community.
Leadership and significant gift support to reinvigorate and sustain the
William and Barbara Edwards Media Fellows Program
are acknowledged from

William K. Bowes Jr.


William C. Edwards
Charles B. Johnson
Tad and Cici Williamson

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Interview: Eric Hanushek + Paul Peterson
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