Power & Market

Why American Foreign Policy Fails

Why American Foreign Policy Fails

One thing to be said in favor of the American conservative establishment is the fact that they at least pay lip service to the idea of a free market. They have also memorized the typical talking points in its defense, including the greater prosperity it provides, the morality of private property, and the impossibility of successful central planning. On this last point, however, mainstream conservatives generally fail to extend the logic to perhaps its most obvious modern example: the catastrophic effects of American foreign policy.

In his 1945 article “The Use of Knowledge in Society,” F. A. Hayek discusses how no central planners could possibly know enough to make rational decisions for the economy, regardless of their experience and intelligence. Since the economy functions according to the myriad decentralized actions of countless individuals, any attempt by central planners to supplant the free market is sure to fail, as they will not know how to satisfy the needs of the public, and have no way of fully analyzing the costs and tradeoffs of what they intend to do.

It is clear that this is true in the market for consumer and capital goods, but why does it suddenly cease to be relevant with regards to unilateral foreign policy decisions? The short answer is that it doesn’t. If central planners can’t run an economy for millions of individuals, there is no way that they can run an entire world for billions of them. Actions like direct military intervention and financial and weapons support are bound to have effects that the foreign policy establishment could not predict.

A cursory overview of some of the most famous interventions in American history illustrate exactly this. In World War I, for example, Woodrow Wilson decided to intervene to make the world “safe for democracy.” American support for the British and French was ultimately decisive in defeating the Central Powers. Yet Wilson and his ilk clearly could not have predicted that, by so decisively defeating Germany, they were setting the stage for the rise of the National Socialists, one of the most destructive governments in the history of mankind (and, ironically, the case most often used to argue against non-intervention).

Or take Iran. By deposing Mohammad Mosaddegh in 1953 and cementing the rule of the Shah, the Americans intended on securing oil interests and maintaining an ally in the region. Much to their chagrin, though, this support for the Shah caused widespread discontent to a degree that Ayatollah Khomeini was able to seize power, and Iran now stands as one of the chief geopolitical adversaries to the American regime.

Most relevant to today, however, are American interventions in the Middle East spurring on terrorist threats. Osama bin Laden famously included in his reasons for orchestrating the 9/11 attacks the First Gulf War and sanctions against Iraq, massive financial and military support for Israel, and the presence of American troops in Saudi Arabia. All of these actions were meant to promote stability in the Middle East but ended up taking American lives and making the nation as a whole less safe.

The foreign policy establishment enjoys describing the geopolitical arena as a kind of real-life chessboard, where pieces can be moved, and strategies developed for specific outcomes. Yet the real world does not work like this. Just as these self-styled omniscient bureaucrats are unable to determine the optimal money supply or the structure of the manufacturing sector without screwing things up, they are also woefully unequipped with building the world anew. Just because they failed to predict these horrible aftermaths is no personal flaw on their part; no one could possibly pull off such a feat. But when these officials attempt to convince the public of the proper course to take with countries like Ukraine and Israel, it is important to heed Hayek’s message, and remember the countless ways that they have failed in the past.

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