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The Great Degeneration: How Institutions Decay and Economies Die
The Great Degeneration: How Institutions Decay and Economies Die
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4.0 out of 5 stars The Decline of the West, December 6, 2014
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Not too long ago Niall Ferguson wrote a book called Civilization: The West and the Rest extolling the " killer apps" that are responsible for the West's prosperity relative to the Rest. If other nations would only adopt these apps (competition, science, property, medicine, consumerism, and work ethic), they too would prosper. The present volume is about how the Rest have successfully taken up the challenge and the West has lost its way.

According to Ferguson, the West is displaying symptoms of what Adam Smith in The Wealth of Nations (Modern Library) called "the stationary state". A stationary state is one where the majority is stuck in low and stagnate wages with a corrupt and rent-seeking elite. The West seems to have come to this point, mired in slow growth, low birthrate, growing inequality, and growing indebtedness.

Ferguson dismisses some of the recently cited sources of this decline such as geography, climate, culture or religion. Instead he locates the cause of decline in institutions. The West's success was due to four institutions: democracy, capitalism, rule of law and civil society. These four institutions which were the source of our prosperity have degenerated into dysfunction.

Democracy, which from the beginning was the source of our political and economic rights, has sown the seeds of its own destruction. Elected officials are forever increasing benefits without increasing the requisite taxes, thus creating huge debts for future generations. And any politician that attempts to reverse this course is promptly voted out of office.

Ferguson claims the recent financial crisis was caused by too much regulation rather than too little. Needless to say this makes him popular on Wall Street. However, what Wall Street fails to notice is that Ferguson also calls for more forceful application of existing laws. In fact, the author is baffled that the malefactors of the last crisis were not convicted and jailed.

Regarding rule of law, Ferguson believes laws have become overly long and convoluted. Rule of law benefits those who write the laws. They benefit from more and more laws, even laws that contradict each other. We are now subject to the "rule of lawyers". This state of affairs actually makes it more difficult to enforce laws, thus creating ironically a lawlessness.

The fourth declining institution is civil society. According to the author, there has been a decrease of certain religious and social charitable organizations. This being due to the so called cradle-to-grave security provided by the modern welfare state. I can't say that I would agree on this point. There seem to be more NGOs and NPOs created daily doing things that government cannot. I do not see the cradle-to-grave security, where there is only middle class decline.

That being said, beyond the four institutions, there are many other factors that come into play in the rise and fall of nations. However, this institutional analysis is very informatative and interesting.

The Origins of Political Order: From Prehuman Times to the French Revolution
The Origins of Political Order: From Prehuman Times to the French Revolution
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5.0 out of 5 stars Democracy, Rule of Law, and the State, November 27, 2014
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When the Soviet Union collapsed, Eastern Europe embraced liberal democracy. It was a time of great optimism. Many believed that history had reached its final stage, Francis Fukuyama became the philosopher of the moment proclaiming that history had come to an end. He predicted that the rest of the world would follow with capitalist economies and democratic governments. Now almost 25 years later that outcome is still far from certain.

In the present work, Fukuyama has not lost his faith in where history is going, however is argument is more cautious and nuanced. He traces the evolution of political order from prehistoric times to the French Revolution. He believes that in order to arrive at a good and sustainable political order three institutions must be present. First there must be a central state that is both competent and uncorrupt. Second there must be rule of law applied equally to rulers and the ruled. And finally there must be accountability in the form of democratic elections. He applies these standards mainly to four regions: China, India, the Middle East and the West. Needless to say much is left, there are many other ingredients in political order: nationalism, religion, culture, to name a few. However, there are many insights to be gained from the this kind of triadic structural analysis.

Why is liberal democracy the final destination when it is far from obvious today? Fukuyama is not a crude determinist, he insists he is putting history before theory. He agues that liberal democracy is the best system under which human nature can be fully realized. Although authoritarian governments have achieved a certain amount of success in meeting human needs, they will always fall short as the human desire for status and recognition can only be realized when the three institutions of a liberal democracy are present.

The author describes the development of civilizations from clans and tribes to functioning states. The first modern state developed in China in the 3rd century BC, however it lacked rule of law. On the other hand, in India, the Middle East, and the West there was rule of law but no central state to administer the law. It was not until the Glorious Revolution in England that a rudimentary form of accountable government came into existence. The book ends with the French Revolution where all three components of the modern political order were in place, however the outcome was not as prescribed by theory and certainly not the end of history.

Fukuyama reminds us that good outcomes are hard to come by, that there are many contingent factors, and there can be backsliding. A good political order can take decades or centuries to achieve, and it is never guaranteed. However there will always be a drift in that direction because of his view of human nature. We are always striving to get there and once we get there doesn't mean it is final. That is the subject of his second volume with regard to the United States. The author's theory is a kind of indeterminate determinism.

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy
Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy
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5.0 out of 5 stars The End of History Revisited, November 15, 2014
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Francis Fukuyama is famously known for declaring "the end of history" in a 1989 essay of the same name. The end of history being capitalism in economics and democracy in government. More obvious then than now, democratic capitalism is still, according to the author, the final destination of modern society.

In a previous volume - The Origins of Political Order: From Prehuman Times to the French Revolution By Francis Fukuyama - of which the present volume is the second and final installment, Fukuyama describes and analyzes the political order of societies from prehistoric times to the French Revolution. The present volume takes us from the French Revolution to the present. This two-volume set is possibly the best account we have to date of the current state of democracy.

According to Fukuyama, every political order is a balance of three elements: strong and effective state, rule of law and political accountability. In order to achieve a well functioning democracy we need the right balance of these three elements. They also need to be achieved in the right sequence. If democracy is attained before there is a strong state, democracy will fail. This is what has happened in many parts of Africa, democracy created chaos before government had the capacity to create order. Likewise, a strong state and rule of law will also fail without democratic accountability. Although this proposition is being challenged at the present time by China and Russia, Fukuyama believes that in the long run authoritarian capitalism will also fail.

In the present volume, the most interesting section is the author's discussion of the current state of democracy in the US. In the course of the past 30 years government has become more massive, more corrupt, and less effective at governing. It wasn't always so. From the end of the 19th century and in the beginning the 20th the American state was transformed into a strong and effective entity. During the progressive era the US for the first time attained an effective federal bureaucracy with the ability to carry out government mandates. During the era of the New Deal government infrastructure was strengthened even more, creating the welfare state. In both cases, the country was also fighting world wars which, according to this account, is a great strengthener of the state.

But what has happened in the last 30 years? America has again become ungovernable. The reasons are several: bureaucracy has become bloated, declining middle class, income inequality, undue influence of special interests and partisan gridlock. Washington can no longer get things done because no one has any interest in getting things. Political players are more beholden to special interests and wealthy donors than they are to the public at large. Democratic accountability has been weakened because of gerrymandering and media bubbles. The result is governmental paralysis. We are unable to carry out some of the most basic government functions such as creating a budget, building infrastructure, and investing in healthcare and education.

Fukuyama notes that the institutions with the least amount of democratic oversight are the most trusted, such as the military and NASA. The least trusted is Congress, which has the most government oversight and the most transparency. The implication here is that government needs given more power and independence to carry out its mandate. Currently there are too many political players obstructing the system. Many have the power to say no, but no one has the power to get anything done.

Yet Fukuyama remains confident that change is possible. Even though there are many obstacles to creating strong, effective, and smaller government it can still be done. Ironically the end of history is still a work in progress.
Comment Comment (1) | Permalink | Most recent comment: Jan 29, 2015 9:39 AM PST

The Betrayal of American Prosperity: Free Market Delusions, America's Decline, and How We Must Compete in the Post-Dollar Era
The Betrayal of American Prosperity: Free Market Delusions, America's Decline, and How We Must Compete in the Post-Dollar Era
by Clyde V. Prestowitz
Edition: Hardcover
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5.0 out of 5 stars The Trade Deficit and the Erosion of American Prosperity, October 24, 2010
This book begins by informing us that our biggest import item from China is computer equipment ($46 billion) and our biggest export to China is waste paper and scrap metal ($7.6 billion). We are currently running a trade deficit of about $700 billion annually, about half of it with China. Clyde Prestowitz, erstwhile trade negotiator for the Reagan administration, tells us that we have been squandering our industrial strength and hence our prosperity for about the last 50 years. It is not too late to change course, but we don't have much time left.

How did we come to this? From about 1800 to about 1950 America grew from an agarian society into the richest nation the world has ever known. During those years it behaved much like China is behaving today, an emerging nation looking only after its own interests. Government and business worked in partnership promoting new technologies, investing heavily in infrastructure, and protecting and nurturing key industries. We treated the country like a business. Today our business is losing about $700 billion annually.

One of the errors of our ways is that we are a nation of consumers rather than producers, we are spenders rather than savers. Consumption is about 72% of our GDP. In the 1950s it was about 58%, the same as Japan and Europe today. (Read also Aftershock: The Next Economy and America's Future by Robert Reich.) We have become the consumers of the world's manufactured goods, and to make matters worse, they have lent us money to . This is obviously unsustainable in the long run.

Another negative trend is that we have become addicted to cheap oil which is actually not cheap when you add in the related environmental and military cost. Much of our $700 billion military budget goes toward maintaining the flow of oil. Keeping fuel relatively cheap at the pump prevents us from seeing the real cost and developing alternatives.

As a trade negotiator Prestowitz experienced first hand America's persistent strategy of sacrificing economic objectives for geopolitical objectives. Many times over the last 50 years America gave other countries full access to our markets without getting access to theirs. A prime example of this is allowing Japan and the other Asian tigers to practice their mercantilism in exchange for being our bulwark against Chinese communism. It worked only too well. The Chinese are now practicing the same mercantilism with devalued currency and restricted access to their markets. In an odd twist we need to share trade secrets and invest in productive capacity in order to have any access at all. Just recently Boeing offered to help China develop commercial airliners, our last big ticket export item.

That being said, Prestowitz finds most corrosive of all our faith in free trade. He devotes a good deal of space refuting the ideology of market fundamentalism, in which both of our major political parties believe. What may have worked in the time of Ricardo is no longer true today. The notion that free markets are self-correcting and that all will be well as long as government does not interfere is as pernicious as it is simple-minded. It is probably the main cause of our decline. Other countries want us to practice free trade while they do not. They take advantage of our naivety as well as role a system enforcer. (Read also How the Economy Was Lost: The War of the Worlds by Paul Craig Roberts.) Free trade worked to an extent when companies were still national. But today's globalized companies are loyal only to shareholders, not country.

Prestowitz also believes the strong dollar and its role as the world's currency is eroding our prosperity. Our competitors buy our dollars to keep its value high. They thereby subsidize their exports to our markets while our exports remain expensive. Not only is this harmful to what remains of our industrial base, it also makes us more irresponsible. Instead of finding ways to sell to other countries to make money, we just print some more. Many falsely believe that trade deficits don't matter.

Although some gallant efforts have been made of late by our Treasury Secretary for more balanced trade and more market-determined currencies, it may be too little too late. We thought the day of reckoning already arrived with the Great Recession, but Prestowitz thinks it was only a prelude of more to come.

Aftershock: The Next Economy and America's Future
Aftershock: The Next Economy and America's Future
by Robert B. Reich
Edition: Hardcover
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5.0 out of 5 stars The Widening Income Gap and the Beleaguered Consumer, October 3, 2010
The defining statistic of this book is the fact that by 2007 the top 1 percent of America's earners garnered 23 percent of the nation's income. It hasn't been that high since 1928 which of course was right before the Great Depression. Robert Reich thinks that this is one of the reasons we are now in the Great Recession. The recovery, if and when it starts, will be very weak since the middle class has not gained any real buying power for the last 30 years.

Consumers constitute 70 percent of all economic activity in the United States, and if they are no longer employed or overburdened with debt they can no longer be the engine of growth that drives the economy. Many say that this figure is too high and that consumers should learn to live within their means. Reich, on the other hand, thinks their means should be increased.

There was time in American history that Reich refers to as the Great Prosperity, the years 1947-1975. (Read also Reich's book Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (Vintage) for more on this period.) This was a time when income was more equally distributed. The top 1 percent received about 9 percent of the nation's income. The top marginal tax rate ranged from 70 to 90 percent.

During the Great Prosperity a single earner - usually male - could provide a middle class lifestyle for an average family. Since then wages have stagnated and families have found other ways to increase cashflow. Over the years women entered the workforce, people worked two or three jobs, and finally, during the last decade, they lived on credit cards and home equity to maintain middle class lifestyles. Now they have run out of sources of income.

Reich makes some suggestions that will have his critics up in arms. One of his proposals is a more progressive tax rate. In his plan the top 1 percent - those making over $400K anually - would pay a 55 percent marginal rate. This would be a relatively mild increase compared to the era of Great Prosperity. The top 2 percent would pay a 50 percent marginal rate and the top 5 percent would pay about 40 percent.

On the other end of the spectrum, those earning less than $20k would be supplemented and the large middle class - those with incomes ranging from $50k to $160k would be paying anywhere from a 10 to 20 percent rate. He believes something of this magnitude needs to be done to get the economy growing again. But it won't happen in the current political climate.

Many say progressive taxation and redistributive income is unfair, or worse yet, confiscatory. The fact of the matter is all taxation is redistributive. Taxation is the price of civilized society - to borrow from Oliver Wendell Holmes.

The current Tea Party movement is doing the bidding of the super rich. They are terrified of the poor and, in their view, the undeserving ending up with some of their money. Unbeknownst to them, the better off the poor and the middle class are, the better off the super rich will also be. Reich's modest proposal will not only strengthen the economy, it will also strengthen our democracy.
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Parisians: An Adventure History of Paris
Parisians: An Adventure History of Paris
by Graham Robb
Edition: Hardcover
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5.0 out of 5 stars Paris for the Flaneur, April 14, 2010
Graham Robb is a modern-day flaneur. The concept of the flaneur was popularized by Charles Baudelaire who defined it as someone who strolls about the city in order to observe it and experience it, someone who might also be an esthete and a dandy. This book contains 19 anecdotes that are meditations on historical characters and the geographical locations with which they are associated. There is of course no better city to be a flaneur than Paris, a city where every street and building has a story to tell.

Robb has a novelist's imagination and eye for detail. The first episode is set in the late 18th century and concerns a young man coming to Paris from Corsica. The lad makes his way to the Palais Royal to experience to the pleasures of the flesh for the first time. The young man we find out later on was Napoleon. Apparently the residence Cardinal Richelieu and French Royalty had become the place to go for nightlife in Paris.

Before Baron Haussmann cleared whole neighborhoods to lay out wide boulevards along straight lines, Paris was a network of convoluted, narrow streets. It was a city without maps. Robb tells the story of Marie-Antoinette as she was fleeing the mobs during the French Revolution. She was trying to get to Vincennes but accidentally gave her coachman the wrong directions and ended up in the hands of her enemies.

One of the most interesting and little-known figures brought to light by this study is Charles Axel Guillaumot. In the late 1700s the streets of the Left Bank were starting to cave in as a result of many years of quarrying below the city. Guillaumot, who was an architect and surveyor, decided to reinforce the caverns underneath the city and use them as a place to bury the dead, thus creating the infamous Catacombs.

There is also a chapter on Hitler's one and only whirlwind tour of the city with his sculptor Arno Breker and architect Albert Speer. The tour lasted only two and half hours but apparently Hilter beside himself after absorbing the splendor of the city. It reminds us that he was an artist before he became a politician.

Every chapter is beautifully written and full of surprises. One can imagine that there are many more stories such as these. They seem arbitrary but nevertheless insightful. Robb has repeated the succuss of an earlier work, The Discovery of France: A Historical Geographyin which he does for rural France what he does for Paris in this volume.
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Taming the Gods: Religion and Democracy on Three Continents
Taming the Gods: Religion and Democracy on Three Continents
by Ian Buruma
Edition: Hardcover
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2 of 3 people found the following review helpful
4.0 out of 5 stars Domesticating Religion, April 12, 2010
Do we need to read another book about the tensions between church and state? Between religion and politics? If this is the book in question, the answer would be yes. Ian Buruma, a Dutch journalist and student of Asian cultures, has spent many years meditating on the place of religion in liberal democracies. He is perhaps best known for writing Murder in Amsterdam: Liberal Europe, Islam, and the Limits of Tolerence. There he examined how a highly tolerant society dealt with the murder of a filmmaker by a member of a highly intolerant minority. Needless to say there are many issues beyond rule of law.

In the present book, which is both brief and scholarly, Buruma takes a look at how different cultures find their balance between the religious faith and secular government. He examines not only Europe and America, but also China and Japan.

There is a stereotypical view that sees Americans as deeply religious and Europeans as staunchly secular. Buruma looks beyond this and finds that their respective attitudes derive from a common source: namely fear of change and instability. Using de Tocqueville as his guide, Buruma argues that Protestantism served as a common ground and source of stablity in American democracy. Europe, on the other hand, had a very different experience. Indeed each European country's experience was different from that of the others. One thing they did have in common was their share of religious fanaticism and intolerance. It is for this reason they follow more strictly the Enlightenment principle of separation of church and state.

Buruma himself is an agnostic and staunch defender of Enlightenment values, true to his European background. He argues correctly that secular liberal democracy is the highest form of government. Religion can be a force that holds governments together, and it can be a force that divides and causes civil strife. The rise of Islamic fundamentalism in Europe has put pressures not only on governments but society's tolerance as well. Buruma nevertheless argues that all voices must be heard no matter how illiberal, as long as they stop short of violence. For this he has been criticized as someone not standing up for European values when in fact he was doing just that. Therein lies Europe's dilemma and the crux of the problem between religious faith and secular governance.

When China Rules the World: The End of the Western World and the Birth of a New Global Order
When China Rules the World: The End of the Western World and the Birth of a New Global Order
by Martin Jacques
Edition: Hardcover
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5 of 7 people found the following review helpful
4.0 out of 5 stars Is China a Threat?, February 15, 2010
The title of this book is shocking, the subtitle even more so. This of course was a tactic used by the author and publisher to sell increase sales. The actual thesis of this book is not that shocking. Most books that have been written about China's extraodinary recent development focus primarily on its economic ascendance. (China Shakes the World: A Titan's Rise and Troubled Future -- and the Challenge for America and China, Inc.: How the Rise of the Next Superpower Challenges America and the World, are two salient examples.) The assumption of these works is that although China has grown by leaps and bounds in recent years, it will have to westernize or "modernize" in order to develop further. Martin Jacques disagrees: he argues that China will offer an entirely new model of development, one that the West would find disagreeable.

Jacques is a former editor of Marxism Today and a frequent contributor to The Guardian. He has also spent many years in Asia, mostly in China. He makes no secret of his predilection for statism in general and the Chinese government's management of its economy in particular. The claims he makes about the demise of the "Anglo-American model" of capitalism will find many takers at this juncture in history. However overstated that the claim may be, it is true that the power shift from West to East has accelerated due to the recent economic crisis.

The Chinese goverment has been highly competent in its handling of the current recession as of this writing. Whether this will be true in the long run remains to be seen. Already there are signs of inflation, overheating, and property bubbles.

The author also tends to gloss over many of the things the government hasn't handled well: namely, corruption, political dissent, environmental degradation, intellectual property theft, and discrimination against all who are not Han Chinese. Jacques seems comfortable with the Chinese government's mission to control all aspects of politics and life, as long as the entrepreneurs keep producing economic growth. Unlike most western observers who think China will eventually acquiesce to current international norms, Jacques believes China will set its own terms and conditions. China will create a new hierarchical world placing itself at top and center, regaining the position it held about 200 years ago.

It is doubtful that the current Chinese leadership will buy this argument, let alone western readers. It is also doubtful that China can maintain its current pace of growth without some major changes occurring. (Read Factory Girls: From Village to City in a Changing China on the changing status of women. Or witness the recent incident with Googles' struggles with hacking and censorship.). China may not westernize per se, but it will have to change greatly to accomodate the modern world as we know it. In any case, it will end up being at least different version of modernity.

Although this book has some flaws it exposes the reader to new possible futures in which China will be a superpower.

The Next Hundred Million: America in 2050
The Next Hundred Million: America in 2050
by Joel Kotkin
Edition: Hardcover
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77 of 92 people found the following review helpful
4.0 out of 5 stars A Case for American Optimism, February 7, 2010
Joel Kotkin estimates that by 2050 the United States will be home to 400 million people, about 100 million more than today. Looking at demographic trends, fertility rates, and immigration patterns, he predicts that the US will have the greatest population growth of all the advanced industrial nations. It has already been well-documented that Japan and European countries, with low fertility rates and restrictive immigration policies, will decline in population in the coming years. As an example, the Russian population will decline by 30 percent by 2050, not only because of low fertility rates and little immigration, but also because of high mortality rates.

The author argues that China, with its one-child policy, will find itself by 2050 with about 30 percent of the population over age 60. This policy will also hamper it from overtaking the US in terms of GDP anytime soon. This prediction illustrates one of the pitfalls of futurology: I have read elsewhere that China has abandoned its one-child policy due to "shortages" of factory workers. Take away the one-child policy and again China is an economic dynamo.

As in his previous book, The City: A Global History (Modern Library Chronicles), Kotkin is a champion of suburbia and the exurbs. This distinguishes him from Richard Florida who champions the creative class of the metropolitan areas. Kotkin believes future growth, both demographic and economic, will be in the lesser known heartland suburbias, where the standard of living is lower and regulations are fewer. Growth will not be as robust in "luxury cities" such as San Francisco and New York which are more attractive for young and single adults as well as childless couples. These bohemian types, according to the author, focus more on art and lifestyle, rather than creating jobs and families.

It is obvious from the trends that Kotkin outlines in his current book that most of the population growth and economic expansion will come from immigrant communities, most notably Asian and Hispanic. He points out that between 1990 and 2005 one in four venture-backed public companies was started by either Chinese or Indian diaspora.

Kotkin paints a rosy picture of the future: America will still be a preeminent superpower, sharing that position, however, with China and India. It is good to keep in mind that predicting the future is a shaky business. Projecting a few of the current trends far into the future can be an empty exercise when certain facts on the ground change or when others are overlooked.
Comment Comments (2) | Permalink | Most recent comment: Feb 3, 2011 9:12 PM PST

The Grand Strategy of the Byzantine Empire
The Grand Strategy of the Byzantine Empire
by Edward N. Luttwak
Edition: Hardcover
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5.0 out of 5 stars A Guide for Superpowers in Decline, November 29, 2009
In a previous work called The Grand Strategy of the Roman Empire: From the First Century A.D. to the Third (Johns Hopkins Paperbacks), Edward Luttwak described the strategies of a vast and powerful empire, from its apex to its eventual fall. In the present work, he outlines the strategies of the Byzantine Empire, a smaller and less wealthy cousin of the Romans. Small and weak as it was, it managed to survive, and sometimes thrive, for another 1,000 years.

Byzantine, as it is used as an adjective in everyday conversation, usually denotes someone or some entity that is scheming, devious, deceitful, and annoyingly complicated. This pretty much describes the national-security policy of the Byzantine Empire. They could not afford, nor did they have the manpower, to field an army to confront the enemy in classic force against force confrontation. Their enemies where many and they came from all sides. Even though this so-called empire had a small and well-trained army, they used force only as a last resort.

There is much here to learn for small countries such as Isreal, of which Luttwak is a vigourous supporter. There is also much to learn here for declining superpowers such as the United States, which finds itself today with less wealth, less power, and fewer friends.

Thanks in no small part to Edward Gibbon the military strategies of the Roman Empire have always been glorified and those of Byzantium have always been denigrated. They have been viewed as disreputable, decadent, and no doubt illegitimate. However, when dealing with a ruthless enemy and one's survival, the scope of what is legitimate is suddenly enlarged. The tactics of deceit, bribery, subversion, and divide-and-conquer can be very effective. The war in Iraq turned when these tactics where used with the Sunni insurgency. This will also be true in Afghanistan when these tactics are successfully applied. The Taliban can only be conquered by dividing it against itself.

Although Luttwak is not in the Obama camp - in fact he has few kind words for Obama - it can be said that Obama is practicing what Luttwak preaches. In a rapidly nuclearizing world, what else can an impoverished superpower do but use diplomacy, subversion, and minimal direct force. The days of multi-billion dollar invasions are over. We have reached the Byzantine phase of empire, but will this grand strategy serve use for the next 1,000 years?
Comment Comments (2) | Permalink | Most recent comment: Dec 5, 2009 6:48 AM PST

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