Germany is Mercury, the U.S. is Mars

WASHINGTON – Germany and the United States are Mercury and Mars. Germany is Mercury, the Roman god of commerce and the U.S., Mars, the god of war.

Germany has emerged over the past decade as the big winner in the West from globalization, the “Exportmeister” of the world in its class. It is the paradigm of a geoeconomic power, one that relies on its economic rather than its military power for its influence and which defines its national interest largely in economic terms.

Germany’s world-class companies have a global reach and a global vision. Beyond the realm of pure politics, they are cornerstones in giving Germany shaping powers on the global stage.

A “shaping power” — while not a super power — is a state that has the power to shape outcomes and events. It offers an important status at a time when we see the emergence of a polycentric highly interdependent world with rising non-Western powers playing a larger role in global and regional decision-making.

The official German government paper on this concept puts the idea of “Gestaltungsmacht” (as shaping powers are called in German) in the following terms: “These countries are economic locomotives that substantially influence regional cooperation and also have an impact in other global regions and play an increasingly important role in international decision-making. . . . We see them as more than developing countries but as new shaping powers.”

Shaping powers base their influence on economics and, rather than acting within the confines of traditional alliances (such as the European Union, NATO and the Group of Seven), they fashion networks with new actors both at home and abroad.

Given Germany’s great reliance on exports and its dependence on the import of natural resources, it needs to have a reputation as a reliable economic partner. Generally speaking, sanctions, drawing red lines and employing military force all run counter to Germany’s geoeconomic interests.

In this sense, risk aversion, already a deeply embedded trait in German political culture, is reinforced. In my view, that has produced the “Nein Nation,” a Germany that increasingly says no to policies that might endanger these economic interests. Its use of sanctions against Russia is an important departure from this posture.

America, in contrast, is both a major economic and military power with global security interests. The U.S. has a tendency to look to its imposing military instruments in dealing with foreign policy. Accordingly, it has developed a national security state that is as imposing as the German commercial one.

The resurgence of nationalism and military force as seen in Russia’s challenge in Ukraine and the growing Chinese military challenge in East Asia have opened questions concerning which type of power is best suited to operate in the 21st globalized century.

The divergence in the discussion over how to respond in Ukraine, between Chancellor Angela Merkel’s ruling out of military options and the growing support in the U.S. on arming Ukraine, illustrates the potential for real-life differences in these two approaches.

The German model may seem to many Americans as one-dimensional and lacking in the necessary military tool in its diplomatic arsenal. Critics have a point when they argue that Germany has let its defense capabilities atrophy. Even geoeconomic powers need a strong military to hedge against risks in an unknown future. That is certainly something which the Ukraine case has made clear.

However, Germans are correct to argue that a geoeconomic approach will win out against the classic, if not antique, geopolitical approach of Russian President Vladimir Putin. Putin seems to be at war with globalization and the interdependence it brings. He has reversed Soviet leader Mikhail Gorbachev’s adaptation of Peter the Great’s strategy for the modernization of Russia.

As Gorbachev understood, the Soviet Union (now Russia) could not be a first-tier power if it relied too heavily on the military dimension. In fact, it was this over-reliance on the military dimension that led to military spending at a level of over 25 percent of the GDP of the Soviet Union, helping to cripple its economy.

Putin has famously called the collapse of the Soviet Union the greatest geopolitical catastrophe of the 20th century. But he fails to understand that the collapse came from within from a corroded technological and economic base.

That is why Putin’s turn at Russia’s helm will end up being another geopolitical catastrophe for the country. Germans are right to argue that economic power and the interdependence it has brought will prevail over the exercise of military force and the disregard for what former U.S. official Zbigniew Brzezinski has called the “global awakening.”

As he wrote in 2008, “For the first time in history, almost all of humanity is politically activated, politically conscious and politically interactive. Global activism is generating a surge in the quest for cultural respect and economic opportunity in a world scarred by memories of colonial or imperial domination.”

The issue for the U.S. is that it is of course a geopolitical power as well as a geoeconomic power. But the country’s leadership has to realize that it is increasingly neglecting its geoeconomic power in favor of its military dimension, at the cost of its influence.

The limits of military power have been made very clear by the U.S. experience in Iraq and Afghanistan, while the neglect of economic power has become increasingly salient.

At the recent International Monetary Fund and World Bank spring meetings, concerns about America’s declining economic power dominated the week. It was Washington’s blunder in opposing the Asian Infrastructure and Investment Bank, which led geoeconomic Germany and other key European partners to join the AIIB.

This blunder followed the failure of the U.S. Congress to enact IMF reform, which would have recognized the shift in the global economic balance toward Asia — something successive U.S. administrations have long advocated, chiding “old Europe.”

On a broader level, the continuing gridlock in Washington endangers economic reform at home, including much-needed infrastructure investment.

The potential free trade agreements that would enhance American leadership both in Asia and the Pacific are very contentious as well on Capitol Hill, which will not please nations in Asia and Europe. The TPP and TTIP are at the heart of the new geoeconomics and will have a longer term impact on American influence than its response to Ukraine.

If the U.S. wants to continue to be a shaping power in this century, it will have to reduce its over concentration on military options — which remarkably has been a bipartisan phenomenon. The U.S. needs to rediscover its geoeconomic potential. Otherwise, it risks making the mistakes of Putin — and losing the insights of Merkel.

Dr. Stephen F. Szabo is the executive director of the Transatlantic Academy in Washington. This article is adapted from an excerpt of “Germany, Russia, and the Pursuit of Geo-Economics”(Bloomsbury Publishing, Dec. 18, 2014).