Sea Change

The Cato Institute's Ted Galen Carpenter asks whether the United States can afford the naval confrontation with China envisioned by Robert Kaplan.

Robert D. Kaplan's often incisive analysis of the current and prospective geostrategic rivalry in the South China Sea ("The South China Sea Is the Future of Conflict," September/October 2011) suffers from three deficiencies. First, Kaplan says surprisingly little about how such East Asian powers as Japan and South Korea are likely to respond to the looming prospect of a Chinese bid for hegemony. A second deficiency is his comparison of China's projection of power in the South China Sea today to the United States' drive to make the Caribbean a U.S. lake in the early 20th century. The United States had no credible competitors in the Western Hemisphere capable of thwarting its ambitions. China faces a more challenging environment. Japan and India are credible competitors, and Indonesia has the potential to achieve that status.

The third problem is Kaplan's prescription for the United States. His conclusion that the optimal situation is a U.S. air and naval presence at approximately the current level creates an incentive structure that inhibits the development of an East Asian balance of power.

Countries like Japan, South Korea, and Taiwan woefully underinvest in their own defenses because they believe that they can rely indefinitely on U.S. protection. Given America's own fiscal woes and its excessive commitments in other regions, their expectation may prove to be more illusion than substance in the coming decades. If Washington wants to complicate Beijing's strategic calculations in the South China Sea and elsewhere, it needs to change the incentive structure so that China's logical competitors realize that they must put forth more serious efforts. Kaplan's insistence on preserving the current oversized U.S. military presence in the Western Pacific would encourage the continuation of an unhealthy security dependence.

Senior Fellow
The Cato Institute
Washington, D.C. 

Robert D. Kaplan replies:

It is a pleasure to be engaged by Ted Galen Carpenter, whose own incisive analyses about subjects as diverse as Mexico and East Asia I read regularly. Carpenter asks a serious question: If wealthy countries such as South Korea and Japan do not do more in their own military defense, why should American taxpayers pick up the burden? I am in agreement that hundreds of billions of dollars could be saved from our defense budget through various means, but I do not agree that this should be done by reducing the presence of carrier strike groups in the Western Pacific.

It is an exaggeration to say that East Asian nations are simply not rising to the challenge that China's military poses. I write these lines from Vietnam, where I can tell you that, as the Australian analyst Desmond Ball writes, East Asia is in the midst of an "action-reaction" arms race, rather than a more benign general defense buildup. South China Sea nations are enlarging their submarine fleets, even as South Korea and Japan continue to modernize their own navies in reaction to what China is doing.

Carpenter seems willing to bet that if we do less, East Asian countries will do more. But that may not be the case, since all these countries have no choice but to accept China as their biggest trading partner. It is the very combination of China's economic might, rising military strength, demographic heft, and geographical proximity that could force a form of Finlandization on countries of East Asia were the United States to reduce its naval and air presence.

I am all for leveraging like-minded others to do more in their own defense so as to reduce our own burden; but it cannot be done by forcing an either-or decision on them. It is precisely our willingness to keep our own forces at adequate strength that is encouraging smaller countries of the region to enlarge or at least modernize their own militaries. On another matter, while the differences between the South China Sea and the Caribbean are real, it is the similarities that are fascinating and therefore worth recording.



Duchy of Hazard

Fernand Grulms of Luxembourg's national financial center is not amused by Eric Pape's tongue-in-cheek take on the country.

Eric Pape ("The Lap of Luxembourgery," September/October 2011) describes Luxembourg as a country rotten to the core. We write not to question the article's style or humor, but to get some facts straight.

Among the numerous inaccuracies in this article is the myth of the GDP per capita figure. This figure is relatively meaningless when applied to Luxembourg and cannot be used to demonstrate the country's wealth. Luxembourg's GDP is generated not only by the local workforce but, as Pape admits, by a large number of cross-border commuters. These represent some 150,000 out of a total working population of just 340,000. With foreign workers added to the head count, Luxembourg's per capita GDP falls by around 45 percent.

Pape writes that Luxembourg's per capita external debt (some $3.76 million per person) is 84 times that of the debt-ridden United States. According to Eurostat statistics, the global level of Luxembourg public debt in 2010 was €7.66 billion (around €15,200 per capita.) Hence the external debt cannot be several trillion euros.

In addition to relying on inaccurate statistics, Pape's article also displays a poor understanding of politics. He says that democracy in Luxembourg is a joke because the ruling family is hereditary and appoints certain members of parliament. This is not true. Moreover, parliamentary monarchy is a widespread model, which democracies including Britain, Denmark, the Netherlands, Norway, Spain, and Sweden have adopted.

Luxembourgers do not suffer from a sense-of-humor failure, but we expect articles about our country to be well-researched and constructively argued. Given that Foreign Policy is an opinion leader in its field, poorly crafted texts can mislead readers and raise questions about the credibility of a distinguished publication.

Chief Executive Officer
Luxembourg for Finance

Eric Pape replies:

I was willing to risk my well-being when Foreign Policy sent me, its intrepid reporter, into the bowels of Luxembourg to write an irony-laden dispatch that mocks myself and parachute journalism in general, but I try my best to relegate my banking and debt analysis as a journalist to my own banking and debts.

So, for the most sensitive numbers -- those suggesting that Luxembourg has an outlandish external debt (which is not to be confused with the country's honorably low public debt) -- I sought out "experts." One was the genial (and sadly recently deceased) parliamentarian and banking-world expert Lucien Thiel. Thiel readily acknowledged the famously high external debt data that I brought up with him, and he contextualized it as the natural extension of the tiny country's unparalleled success with investment funds, among other things. In his telling, Luxembourg's external debt is a sign that it is economically creative, and thriving.

Interestingly, Luxembourgian folk wrote to explain away pretty much all the data brought up in my dispatch. Could it be that Luxembourgers are so dejected that the only statistics that they have faith in involve good news: the puny public debt, low unemployment, and projections for vibrant economic growth? Maybe they are right about that. (As for the country's dismal score on the happiness ranking, I welcome travel donations so that I can visit similarly unhappy peoples and rank them myself.)

If Luxembourg really is the dark, corrupted heart of Europe, then one thing is clear to me: Evil sure picked a pleasant place to live.