Return of the Silviosaur

Italian politics these days is like Sunset Boulevard meets Jurassic Park.

With one tactless remark last week, an Italian cabinet minister may have inadvertently triggered the fall of the country's technocratic government and the return to center stage of former Prime Minister Silvio Berlusconi.

Corrado Passera, the normally suave and experienced economic development minister told a television interviewer that "a return to the past would not be good for Italy." The remark was an explicit reference to Berlusconi's Popolo della Libertà-led government, which stepped down in November of last year. The immediate reaction was a salvo of criticism from leaders of the PdL and the party's decision to withdraw its support from Prime Minister Mario Monti's government. Berlusconi then strongly hinted that he was planning to throw his hat back in the ring: "I cannot let my country fall into a recessive spiral without end. It's not possible to go on like this," he said in a statement, noting that he had been "besieged by requests" to run.

On Saturday, Monti announced that his government would resign, saying the PdL's withdrawal of support clearly represented "a no-confidence vote for the government and its policies." Later that day, Berlusconi confirmed what was already obvious to everyone. "I am running to win," he told reporters. Elections must now be held within 60 days of the dissolution of parliament, and the world will wait to see if  Berlusconi can return to the prime minister's office for a fourth time. If he does, the consequences for Italy and for the rest of Europe are likely to be dire. Even if he does not win, the negative effects will color the whole campaign.

Berlusconi had been hinting at this for a while. A couple of weeks ago, he promised  that he would "pull a dinosaur out of the hat"; the implication was that he was the dinosaur. The given explanation is predictable: Monti's economic policies, according to Berlusconi, are not working, and he has to return in order to save Italy... again. But, given that this is Berlusconi we're talking about, the real reasons are more complicated.

The first is Sunset Boulevard on the Tiber. Berlusconi is the aging star who refuses to accept that he is past his prime and still craves the adulation and attention of fawning fans and the media. He is 76 and despite (or sometimes because of) the very visible pancake makeup, he looks his age and more. His comeback bid is a dangerous ploy, as he also knows that he risks an electoral disaster and bitter criticism from his own former party faithful. The potential for humiliation is likely the reason he has waited so long to jump back in. But that risk evidently wasn't enough.

Berlusconi may also want to return to politics in order to protect himself and his friends. Last week, the cabinet debated a decree that would prevent anyone convicted of crimes carrying a two-year sentence or more from running for office. As the law would only apply to those convicted at all three levels of Italy's court system, only a couple of parliamentarians would be affected -- though quite a few more at lower levels of government.

Even though Berlusconi has faced dozens of criminal indictments over the years and was convicted of tax fraud by a Milan court in October, he has never been convicted at the highest level. But there is talk that before the law is passed, it might be modified to include first- or second-level convictions, in which case Berlusconi would be in trouble personally. The current draft law says that anyone convicted while in office will have to stand down. Berlusconi is expecting judgment in February on the so-called Ruby case, in which he is accused of soliciting an underage prostitute and abusing his power. That would only be a lowest-level conviction, but he likely feels the noose tightening. Some of his close associates, including longtime friend Senator Marcello Dell'Utri, who was convicted at all three levels for false accounting and given a sentence of two years and three months, are feeling the heat as well.

Berlusconi and PdL party secretary Angelino Alfano have also made it clear that another reason for their decision to abandon Monti's government is the lack of progress on justice reform, though they have a fairly unique understanding of that concept. When Berlusconi was prime minister and Alfano was justice minister, they did nothing to answer the most pressing issue facing Italian justice: the years it takes to reach a definitive sentence. This is not only a problem of equity and justice but a serious discouragement to investment; no one is going to invest in Italy if they can't expect the courts to decide civil cases.

Berlusconi's main concern, by contrast, is that judges and magistrates should bear personal civil liability for their actions. In his ideal world, if a prosecution fails, the prosecutor should be personally liable for damages to the accused. It is a measure that smells of vendetta, as well as a way to discourage any prosecutor, not just the over-zealous. His other hobbyhorse is limiting police use of telephone taps. It is no coincidence that wire taps, both those used in court proceedings and those leaked to the media, like the conversations of the girls who went to his parties, have been very damaging to his reputation.

According to current polls, a return to power would still be a long shot for Berlusconi. The center-right is on a downward slope at the moment; they lost regional elections in Sicily in October, and the PdL is currently polling anywhere between 12 and 20 percent nationwide, a disaster compared to the 37 percent they garnered in 2008. Monti had been polling at around 47 percent prior to his announcement. But it's definitely to Berlusconi's advantage to have the election sooner -- when public anger against Monti's pro-European, pro-austerity policies is high -- rather than later, when party infighting will only drag the PdL further down.

There's also a new player on the scene whose emergence may be to the former prime minister's advantage. The Five Star Movement, a recently created party led by the popular comedian Beppe Grillo -- a kind of Genoese Stephen Colbert -- has emerged as the second most popular party in the country, according to pollsters. The party's ideology is mostly left-wing but is defined more by anger against Italy's traditional parties and politics. Berlusconi, though often a target of Grillo's barbs himself, hopes to tap into this discontent and regain some of the alienated center-right voters who have embraced the new party's populist, euroskeptic message. About half of Italy's electorate is either undecided or planning not to vote. They do not like Monti's austerity measures or the old parties. If Berlusconi can mobilize even a small proportion of them, he will increase his share enormously.

The consequences of Berlusconi's threatened return have already been felt. The spread between German and Italian government bonds, which had dipped below 300 for the first time since early last year, immediately jumped to well over 300 after his announcement last week, a tangible demonstration that Berlusconi's claim to be "saving the Italian economy" was nonsense. European stocks plunged on Monday following news of Monti's departure and the potential of Berlusconi's return. It now falls to the old triumvirate of President Giorgio Napolitano, the European Union, and the markets to persuade Berlusconi to step back. If they fail, Italy may once again find itself at the mercy of the Silviosaur.



Decline Is a Choice

The West has nothing to fear but fear itself.

The collapse of the Soviet Union in 1991 was supposed to mark both the "end of history" and the birth of an international community founded on the universal acceptance of Western values -- a world in which "market democracy" was the norm. Instead, the West has suffered a litany of disappointments -- from costly wars to financial crises to the rise of non-Western powers -- that has left it deeply disillusioned. Far from a cooperative, rule-based order, the contemporary world is a place of vast, permanent competition -- a muddled melee among regional poles, countries, governments, businesses, banks, financial funds, rating agencies, producers, consumers, individuals, international media, and criminal organizations, if not also between "civilizations." This competition continues even in the forums that are supposed to regulate it: the World Trade Organization, the G-20, and others.

After the end of the Cold War, those in the West with universalist sensibilities -- particularly in Europe -- strove to promote international exchange. Of course, this exchange was supposed to be unidirectional -- the projection of the values of freedom and progress and the market economy onto the rest of the world. But, to the consternation of the proselytizing West, the outside world is now being projected onto it. Just as colonized peoples turned colonizers' ideas -- liberté, égalité -- against them, the globalized peoples have begun to leverage the deregulated global economy to their advantage. As a result, we have seen the rise of the BRICS (Brazil, Russia, India, China, and South Africa) and dozens of other "emerging" countries that signal the end of Western control over global affairs.

Faced with this disorienting new reality, part of the Western elite has taken refuge in denial, insisting on ever more openness and globalization -- and falling further and further out of touch with public opinion. Meanwhile, the accumulation of these upheavals is producing a sense of vertigo and even panic among Western populations. All the world's flows -- trade, finance, migration, culture -- seem totally unchecked and uncontrollable, at least by the West and the international organizations that have, until now, served their interests. In the United States, the Republican Party is adrift. Unable to accept the end of a John Wayne-esque era, party leaders seek at once to isolate the United States and curb the threat of competition from the "rest." This reaction, no doubt, contributed to the GOP's defeat on Nov. 6.

In Europe, we are seeing the rise of utopian and protest votes, quasi-mutinies at the polls, a sharp increase in anti-incumbency, and, on the flip side, voter abstention and general distrust. These phenomena are linked not only to the economic crisis and the recession but also to a gnawing feeling of powerlessness that is undermining civic confidence. Nowhere is the psychological distress more acute than in France, where surveys have found that citizens are more worried about the future than in Afghanistan.

The anxiety that prevails in Europe about the emerging world order has created a new audience for catastrophic predictions. This intellectual current, fed by apocalyptic extrapolations of all kinds, seeks utopian panaceas in the form of rational world government, European federalism, international civil society, and international justice. Such ideals offer a substitute for confidence in the market and the veneration of multilateralism and the international "community." It is a mindset that stands in stark contrast with that of non-European peoples, who brim with optimism and regard the future with confidence and appetite.

Today, use of the phrase "win-win globalization" amounts to provocation, at least in Europe. Europeans have been especially disappointed by the current shifts because many desperately wanted to believe they were living in a post-tragic world that had evolved beyond history and identity. It was their age of innocence. But instead they got austerity and an almost post-democratic system of sanctions to ensure budgetary discipline.

For the moment at least, the debate over eurozone economic policy has been settled in favor of iron-fisted Merkelian rule. But the election of François Hollande in France has opened a crucial parallel debate about growth and the appropriate balance between efficiency and democracy in Europe. As a result, it is not impossible to imagine a compromise involving reforms that are not overly harsh or hasty and that are gradual enough to be socially and politically palatable.

It is on this kind of deal-making that the West's future will turn. Given the magnitude of the global shifts under way, the course charted by Western governments today will have a monumental impact on world politics tomorrow. The challenges facing the United States and Europe today are different but intertwined: Europeans must awaken from their strategic slumber; Americans must accept the new global realities and adapt their strategy accordingly.

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The emergence of certain countries, formerly referred to as "Third World" or by the well-intentioned euphemism "developing countries" (even when they were not), is now an undeniable fact. There is China with its more than 1.3 billion inhabitants and staggering economic growth, the whole of Asia, and the BRICS, minus Russia, which is more hovering than emerging. All told, some observers count as many as 100 emerging countries. This means that we now have the older developed countries of the G-7 and the OECD, the emerging or emerged countries (the most important of which are members of the G-20), and the pre-emerging countries from the so-called Global South, most of which are located in Africa. Indeed, half of the world's 20 fastest-growing economics are located in Africa.

A daily barrage of figures and statistics paints a picture of this brave new world. But with the exception of a handful of Western multinational corporations that have a short-term interest in recklessly transferring core or cutting-edge technology, the West remains stupefied by, if not oblivious to, the enormous adjustments that will be required in order to adapt. Already, the West has begun to lose its monopoly on industrial capacity, technical expertise, and even currency, now that China and Japan have begun trading in yuan and yen. Likewise, soft power is now part of the arsenal of a growing list of emerging countries. Even the balance of military power -- as reflected in rising military budgets in China, India, and Brazil -- is shifting ever so slightly, as is the geopolitical clout that is the handmaiden of military might. Indeed, how else can one explain India's and Brazil's decision to ally themselves with Russia and China in the U.N. Security Council to block Western intervention in Syria?

There is no aspect of Western supremacy that emerging countries are not prepared to challenge -- now or in the future -- from the distribution of power within international institutions to the values that underwrite them. For the first time in history, as former U.S. national security advisors Zbigniew Brzezinski and Brent Scowcroft rightly pointed out in 2008, "all of humanity is politically active."

But if emerging powers have grown increasingly assertive on the world stage, they do not appear poised to supplant their more established counterparts -- at least not yet. The meteoric rise of such powers over the last decade has, to a certain extent, obscured the fact that all suffer from vulnerabilities. Political risks, such as the uncertain future of the Russian and Chinese regimes and a limited but growing opposition in many other countries, could eventually impede their development. Likewise, inequality has risen to explosive levels in many emerging countries, just as growth rates are tapering off and high inflation has necessitated "cooling" policies in places like Brazil. Environmental problems, pollution, overexploitation, and scarcity also loom on the horizon.

It is important to remember, moreover, that per capita income is still very low in most emerging countries and will remain so for the foreseeable future. And while demographics can be an asset, they can also be a liability: India is weighed down by overpopulation, China by its aging population, and Russia by depopulation. Russia may have oil and gas, but it is struggling to establish a modern economy. There is also a tendency to overestimate the unity and homogeneity of the emerging powers. They come together to criticize the West and stake claims, but are just as often divided by individual rivalries -- strategic competition between China and India, commercial competition between Brazil and Argentina, and competition between Nigeria and South Africa over leadership in Africa.

Likewise, we tend to forget, especially in Europe, that Western countries retain considerable advantages. Not only do they dominate the word's international institutions, but Western countries still enjoy colossal wealth and economic power. The West comprises 58 percent of global GDP and 40 percent of international trade when you include Japan. Moreover, the American capacity for invention and creation remains unrivaled, and its soft power unequaled. The United States has won 39 percent of Nobel Prizes ever awarded and 48 percent of prizes in the sciences, medicine, and technology. What's more, the West boasts almost all the top global universities, and its education levels are still higher than in other parts of the world.

Finally, Western countries retain a military advantage that they are unlikely to relinquish anytime soon. U.S. defense spending continues to represent close to half of global military spending, and France and Britain have maintained their military capabilities. Moreover, the prospect of American disengagement is deeply worrying to neighbors of the largest emerging powers, strengthening the United States' position worldwide and making possible proposals like President Barack Obama's plan to establish a trans-Pacific free trade zone that would exclude China. Lastly, American cultural supremacy is beyond question and to that we can add the vitality of Francophonie (even if the French elite is losing interest in it) and Hispanidad. In short, the West is in no danger of being eclipsed by the rest.

* * *

So what will the future hold? It seems clear that the West will never recover the unique position it held from the 16th through the 20th centuries, nor will the United States regain the kind of unchallenged power it enjoyed in 1945 or during the hyperpower decade of the 1990s. It will no longer be the only force shaping the world. At the same time, however, it is highly unlikely that China -- assuming that it even wants to -- will dominate the world as America has done, for the last century, with its hard power and soft power. Nor will Asia as a whole, much less the many emerging powers, whose interests are far too diverse to form a permanent bloc. We will not be entering a "post-American world" anytime soon. The United States will almost certainly retain its position of leadership -- albeit a leadership that is relative, contested, and challenged -- even after the overall size of China's economy has surpassed it around 2020.

It is likely, however, that China will try to tighten its grip on its neighbors and extend its influence over countries whose economies depend heavily on Chinese imports or investment, particularly those in Africa and Latin America. The balance of power among the world's major powers will thus continue to oscillate, following French analyst Pierre Hassner's prediction of a long chaos, or at the very least strategic disorder. Competition will be the defining feature of world politics.

* * *

Faced with these challenges, how should Western countries proceed? Formulating -- and sticking to -- a coherent strategy will be paramount if the West is to maximize its interests, even as the balance of power shifts in favor of emerging countries. Inevitably, this will mean accepting the necessary adjustments to international institutions and reaching agreements with new powers on rules and norms, as well as on reasonable timetables for any changes agreed upon. All this will require Europeans to re-embrace strategic and historical thought, start thinking of Europe as a power, focus on broader projects, end institutional bickering, and coordinate with each other (at least the largest countries) in order to make Europe a leader in the re-regulation of globalization run amok.

As often as possible, Europe should coordinate policies and strategies with the United States. Together, they should forge alliances, issue by issue, with one or more emerging powers. The West must also restimulate economic growth -- not just any kind of growth, but sustainable growth that will drive a "greening" process guided by new economic indicators that are more relevant than stale, simplistic measures like GDP. This growth must be based on market economies re-regulated by sensible rules and safeguards, in which the financial sector is scaled back to reasonable proportions and discouraged from seeking artificial financial gains and engaging in unlimited speculation that is largely unconnected to the real economy. The reordering of the economic sphere, in turn, will depend on our ability to re-legitimize our democratic systems and make them effective once again, perhaps by redirecting some of the energy produced by protest movements or "direct" democracy and better protecting our political systems from the tyranny of focus groups and incessant polling.

There is a striking contrast between the West's current position -- and the medium- and long-run potential it still maintains -- and the atmosphere of anxiety that predominates. Europe is weighed down by pessimism, France by melancholy. But if Europe cleans up its finances, kick-starts sufficient levels of growth, and improves efficiency without becoming too technocratic, its future will be enviable.

Europe's primary handicap in the multipolar scuffle that has just begun is its pessimism. It should take a cue from Franklin D. Roosevelt and embrace the idea that "the only thing we have to fear is fear itself." The United States, meanwhile, continues to believe in its role, in its capacity for recovery, and in itself. This American religion -- optimism -- is still intact, even if the structure of the electorate that rehired Obama represents a spectacular and irreversible demographic shift. And by giving the incumbent president a second chance in spite of a number of disappointments, the majority of Americans demonstrated an understanding that the United States will not be able to meet the challenges ahead by moving backward. But there are two Americas. Mitt Romney's America and Obama's America have fundamentally different conceptions of how best to respond to the rise of the "rest," and this division will no doubt make consensus on foreign policy very challenging.

From the outside, the psychological gap between the United States and Europe is growing wider. The striking contradiction between the global nature of the problems that must be confronted and the national frameworks within which decisions are made is strengthening the resolve of many countries to maintain enough power to impose their will on the international system -- or at least to prevent the system from imposing the will of others upon them. These countries are not putting their confidence in a hypothetical "global government," which will no doubt remain a utopia (though we could see some form of "collective government" in the future). The human race is characterized by thousands of years of differentiation; a few decades of Internet has not homogenized or made it "flat." Progress, therefore, will depend on cooperation, just as it always has.

Multipolar competition will occur alongside growing interdependence and mounting pressure from the global environmental time bomb. This situation could lead to increased confrontation and potentially even conflict. Responsible actors must therefore work to deepen cooperative norms. But the road to international cooperation will not be straight, smooth or without turmoil, especially because economic and financial competition, even if it is better regulated, will produce unstable and shifting power relations.

If this period of intense competition is to be managed peacefully, all the major powers -- starting with the United States and China -- must cede certain claims and parts of their mythology, without relinquishing the defense of their legitimate vital interests. These countries must then help their populations understand and accept such shifts, despite the existence of fears and the instinct for power. This will not be an easy task. Governance in China will be more difficult in the future than it has been during the past 25 years. And it is unclear whether the American people will learn to accept what their president clearly understands -- that its leadership, if it is to endure, must become more sophisticated, at times exercised "from behind" and at other moments practiced by proxy. Will the United States come to terms with this and benefit from a clear understanding of the new realities and forces at work in the world? Will it accept that, even if it does this, American leadership will still be relative, not absolute? The way the United States, which increasingly resembles a global-nation, responds to this challenge will have a major impact on the world of tomorrow and especially on its European allies. If the United States fails to respond -- and if Europe sinks deeper into despair -- the West won't just lose its monopoly on global power; it will be shut out of the global power structure altogether.

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