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March 14, 2004
David Warsh, Proprietor


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Cold War? Yes, But…

BERLIN — Economic Principals had contended for a long time that another sort of Cold War began with events of 9/11. The 3/11 bombing in Madrid reinforces this view. Whoever is to blame, it is further evidence that a new ideological struggle has replaced the old one.

Instead of the state against the market, this one pits religious fundamentalism and separatism against the forces of modernity.

And even though it makes a great deal of difference which group committed the atrocity in Madrid — Basque separatists or Islamic fundamentalists? — the basic issue is still the same. What will government do about it? The long-term response to terrorism is at the heart of politics in countries as different as Spain, Israel, Iraq, Russia and the United States

We give names and dates to eras because these narrative devices organize our perceptions and create boundaries on acceptable conduct. The struggle between communism and the West provided such a deep structure for 75 years, especially half a century of outright military opposition.

The sudden disappearance of the constraints associated with a global struggle goes a long way towards explaining the anything-goes atmosphere of the 1990s. Peace broke out in 1990. People in positions of responsibility all around the world went a little crazy as a result.

At the heart of phenomena of the ’90s as seemingly diverse as ethnic murder in the Balkans, economic stagnation in Japan, impeachment proceedings and the subsequent stock market bubble in the United States was a breakdown of discipline and self-control ultimately related to the end of the Cold War.

Now a new confrontation has become apparent — between open and relatively tolerant nation-states and those who are prepared to resist integration with mass terror and nuclear blackmail. Usually, but not always this opposition stems from religious conviction. Sometimes it is nothing more than simple gangsterism.

The re-emergence of a bi-polar world in new and troubling form explains the conduct of those who are in power as the new century begins, George W. Bush and Vladimir Putin in particular.

Putin, about to be re-elected by a landslide, is in the process of clawing back some of the authority that the Russian state gave up so completely when the Soviet Union collapsed. Among students of economic development, there is widespread agreement that China managed its transition to a market economy far better than has the former Soviet Union, by relaxing economic controls while maintaining relatively tight political reins. Can Russia readjust the balance? Will China grow more democratic? There is reason to believe that economic growth is a great civilizer.

For Bush, on the other hand, no such landslide is in sight. But the president of the United States is trying to do basically the same thing — to act with what he asserts is appropriate authority to defuse an intolerably dangerous situation in the Mideast. He has waged a second war in Iraq, deliberately seeking to destabilize a region which has grown stagnant and corrupt over fifty years on windfall oil profits. He hopes the new equilibrium will be better.

The very closeness of the 2000 election in which came to power has dictated his strategy ever since. He’s a gambler.

This much seems clear: something fundamental has changed. But then it is in the nature of a Cold War that it is not a war at all. It is a dynamic standoff. Many little moves are involved, this way and that, made with varying degrees of confidence and risk. Change comes, but slowly.

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