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One of the few core responsibilities of the federal government mandated by the Constitution of the United States is “to provide for the common defence.”2 Upon commissioning, every American military officer swears an oath to “support and defend” this Constitution.3 Accordingly, the core mission of the American military is to protect and defend our nation. This means deterring potential aggressors and, if deterrence fails, fighting and winning wars. Any consideration of the military’s role and American defense policy must start with that foundational principle. Yet if the need for a strong military begins with the mission to fight and win wars, it does not end there. As the quote from Theodore Roosevelt at the beginning of this essay illustrates, American leaders have long appreciated that a formidable military can produce abundant diplomatic and economic dividends, even—especially—when not wielded in wartime. The United States’ military capability supported our nation’s rise to global greatness over the past century, but this was often because of the increased influence and credibility produced by this capability rather than the overt use of force. Along the way, there developed an American strategic tradition that integrated military strength with diplomatic acumen, economic growth, and international influence.4 It is an historic tradition with an impressive heritage and continuing salience today. Drawing on the historical record, there are many ways beyond the kinetic use of force that a strong national defense bolsters our national power and global influence. A robust defense budget and defense policy also strengthens our nation in manifest other ways. A well-equipped defense enhances our capabilities and influence across virtually all other elements of national power: our economy, our diplomacy, our alliances, and our credibility and influence in the world. Conversely, an underresourced national defense threatens to diminish our national power across all of these other dimensions. A strong national defense is thus indispensable for a peaceful, successful, and free America—even if a shot is never fired. The diplomatic successes in building and maintaining a stable and peaceful international order achieved by the United States over the past century have been enabled by America’s military dominance. Conversely, the calamitous defense budget cuts and corresponding rise of potential peer competitors in the present day are already undermining America’s diplomatic and economic influence. A well-appointed military improves diplomacy with adversaries, strengthens our alliances, signals credibility and resolve, deters aggression, and enhances national morale. Yet this is not to disregard the manifest other dividends that a strong military can pay. There are multiple pathways by which investments in military hard power produce economic benefits. For example, the military’s role in protecting a stable international environment also creates predictable and secure conditions in which economic growth can flourish. The American security umbrella facilitated Western Europe’s postwar reconstruction and economic revival, and Asia’s half-century economic boom has been partly a function of America’s treaty alliances in the region maintaining peace and stability, exemplified by the United States Navy’s Seventh Fleet protecting an open maritime order, freedom of navigation, and secure sea lanes.

If Earth doesn't do us in, our fellow organisms might be up to the task. Germs and people have always coexisted, but occasionally the balance gets out of whack. The Black Plague killed one European in four during the 14th century; influenza took at least 20 million lives between 1918 and 1919; the AIDS epidemic has produced a similar death toll and is still going strong. From 1980 to 1992, reports the Centers for Disease Control and Prevention, mortality from infectious disease in the United States rose 58 percent. Old diseases such as cholera and measles have developed new resistance to antibiotics. Intensive agriculture and land development is bringing humans closer to animal pathogens. International travel means diseases can spread faster than ever. Michael Osterholm, an infectious disease expert who recently left the Minnesota Department of Health, described the situation as "like trying to swim against the current of a raging river." The grimmest possibility would be the emergence of a strain that spreads so fast we are caught off guard or that resists all chemical means of control, perhaps as a result of our stirring of the ecological pot. About 12,000 years ago, a sudden wave of mammal extinctions swept through the Americas. Ross MacPhee of the American Museum of Natural History argues the culprit was extremely virulent disease, which humans helped transport as they migrated into the New World.

Several recent works on China and Sino–US relations have made substantial contributions to the current understanding of how and under what circumstances a combination of nuclear deterrence and economic interdependence may reduce the risk of war between major powers. At least four conclusions can be drawn from the review above: first, those who say that interdependence may both inhibit and drive conflict are right. Interdependence raises the cost of conflict for all sides but asymmetrical or unbalanced dependencies and negative trade expectations may generate tensions leading to trade wars among inter-dependent states that in turn increase the risk of military conflict (Copeland, 2015: 1, 14, 437; Roach, 2014). The risk may increase if one of the interdependent countries is governed by an inward-looking socio-economic coalition (Solingen, 2015); second, the risk of war between China and the US should not just be analysed bilaterally but include their allies and partners. Third party countries could drag China or the US into confrontation; third, in this context it is of some comfort that the three main economic powers in Northeast Asia (China, Japan and South Korea) are all deeply integrated economically through production networks within a global system of trade and finance (Ravenhill, 2014; Yoshimatsu, 2014: 576); and fourth, decisions for war and peace are taken by very few people, who act on the basis of their future expectations. International relations theory must be supplemented by foreign policy analysis in order to assess the value attributed by national decision-makers to economic development and their assessments of risks and opportunities. If leaders on either side of the Atlantic begin to seriously fear or anticipate their own nation’s decline then they may blame this on external dependence, appeal to anti-foreign sentiments, contemplate the use of force to gain respect or credibility, adopt protectionist policies, and ultimately refuse to be deterred by either nuclear arms or prospects of socioeconomic calamities. Such a dangerous shift could happen abruptly, i.e. under the instigation of actions by a third party – or against a third party.

Yet as long as there is both nuclear deterrence and interdependence, the tensions in East Asia are unlikely to escalate to war. As Chan (2013) says, all states in the region are aware that they cannot count on support from either China or the US if they make provocative moves. The greatest risk is not that a territorial dispute leads to war under present circumstances but that changes in the world economy alter those circumstances in ways that render inter-state peace more precarious. If China and the US fail to rebalance their financial and trading relations (Roach, 2014) then a trade war could result, interrupting transnational production networks, provoking social distress, and exacerbating nationalist emotions. This could have unforeseen consequences in the field of security, with nuclear deterrence remaining the only factor to protect the world from Armageddon, and unreliably so. Deterrence could lose its credibility: one of the two great powers might gamble that the other yield in a cyber-war or conventional limited war, or third party countries might engage in conflict with each other, with a view to obliging Washington or Beijing to intervene.

Despite these reflections, in February 2022 I was shocked when Vladimir Putin tried to conquer Ukraine. The expected repercussions for Russia itself, and for the whole of humanity, were so destructive that it seemed an unlikely move even for a coldhearted megalomaniac. Yet the Russian autocrat chose to end the most peaceful era in human history, and to push humanity toward a new era of war that might be worse than anything we have seen before. Indeed, it might threaten the very survival of our species.

This is a tragedy, especially as the past few decades have shown that war isn’t an inevitable force of nature. It is a human choice that varies from place to place and time to time. Since 1945, we have not seen a single case of war between great powers, nor a single case of an internationally recognized state annihilated through foreign conquest. More limited regional and local conflicts remained relatively common; I live in Israel, so I know this perfectly well. But the Israeli occupation of the West Bank notwithstanding, countries have rarely tried to unilaterally expand their borders through violence. That’s one reason the Israeli occupation has drawn so much attention and criticism. What was the norm for thousands of years of imperial history has become anathema.

WASHINGTON, DC – Helping Ukraine win its war against Russia is essential for European and global security. The good news is that the United States and its allies have recently taken two major strategic steps in the right direction, providing more capable weapons, and limiting Russian fossil-fuel revenues. The bad news is that the Republican-controlled US House of Representatives threatens to ruin everything with a fight over the federal debt ceiling.

To understand what is at stake in Ukraine, think about a scenario in which Russia “wins,” in the sense that it keeps some or all of the territory it has seized. This would strengthen President Vladimir Putin’s grip on power and embolden him to expand Russia’s borders again. After all, that is what happened after the lame Western reaction to his land grab in 2014, when he occupied Crimea and parts of eastern Ukraine. Multiple voices on Russian propaganda channels are clear that the ambition is both territorial (most of Ukraine, Moldova, the Baltics, and parts of Poland, though not necessarily in that order), and strategic (defeat of the West and its values). Nothing that Russia wants is secret at this stage, as Julia Davis’s exceptional coverage of these voices makes clear.

The Spoils of Hegemony As the issuer of the international reserve currency, the United States has garnered two unique economic benefits from dollar hegemony. First, for other countries to be able to continually accumulate dollar reserves by purchasing dollar-denominated assets, capital has to flow out of the United States and goods have to flow in. Effectively, the international economy must allow the United States to purchase a growing quantity of goods in order to facilitate the flow of capital into the coffers of other nations. As a result, the value of the dollar has to be kept higher than the value of other currencies in order to cheapen the price of imported goods. While this arrangement has come at the cost of an ever-growing current account deficit, it has also subsidized US consumption and fueled the growth of the US economy. Effectively, when a US citizen buys a cheap imported good priced in dollars, the exporter of that good must use those dollars to purchase dollar-denominated assets or invest that dollar in the United States, compounding the exchange effects of the system and aiding US economic growth. The second benefit of this system is its effect on the market for US government debt. The largest market in the world for a single financial asset is the multi-trillion dollar market for American bonds. This market, considered by many to be the most liquid in the world, allows any nation or large investor to park massive amounts of cash into a stable asset with a relatively desirable rate of return. While the depth and stability of US financial markets as a whole were part of the original reason nations gravitated toward the dollar as a reserve currency, the explosive growth of US government debt has made US Treasury bonds the center of the foreign exchange market and the most widely held form of dollar reserves. The use of the US Treasury securities in currency reserves has created an almost unlimited demand for US debt; if the federal government wishes to issue debt, someone will buy it if only as a way to acquire dollar holdings. This artificially high demand means that the United States can issue debt at extremely low interest rates, especially relative to its national debt and overall economic profile. And while the United States has had to pay off its existing debt by issuing new securities, no nation wants to call in its debt for fear that it would devalue the rest of its dollar holdings. While precarious and arguably dangerous in the long term, the reality is that as long as the dollar is the international reserve currency, the United States will have a blank check that no one wants to cash. Whether or not you agree with US fiscal policy, it is indisputable that the ability to finance its debt has allowed the United States to provide its citizens with a high standard of living and fund its enormous military programs. Essentially, dollar hegemony has served as the backbone of US primacy. Domestically, the ability to run effectively unlimited budget deficits has allowed the United States to fund its massive entitlement programs and, more recently, afford sweeping bailouts at the height of the recession. The United States has used its unlimited allowance, afforded by dollar hegemony, to finance its high standard of living and maintain the prosperity required of a hegemon. More importantly, the United States has used the demand for American debt to fund its military apparatus. Each year, the United States spends over US $600 billion on its military, excluding spending on the wars in Iraq and Afghanistan, constituting over forty percent of global military spending. Since the establishment of the post-World War II international order, the United States and its allies have relied on US military might to enforce their wishes upon the world and maintain the Western-dominated order. The ability to intervene militarily in any conflict that threatens US interests and maintain US geopolitical influence and hegemony is a direct result of dollar hegemony. For the past sixty-five years, the United States has relied on its excessive spending to fund its position of privilege and relied on the dollar’s position as the international reserve currency to fund this spending. The United States’ Undoing? Despite the dollar’s long history as the international reserve currency, the past few years have seen a growing number of calls for the end of dollar hegemony. Countries as diverse as France, Russia, and China have decried the dollar’s monopoly in foreign exchange markets, while in 2009 reports of a shift away from dollar-based oil trading surfaced in the Middle East. Reported plans to move away from the dollar reflected international frustration at a system fueling the United States’ “exorbitant privilege,” as the French have called it, one that rests its stability on the financial conditions of a country mired in debt and facing a financial meltdown. The implications of a true end to dollar hegemony, a shift away from the dollar as a reserve currency and pricing standard for oil transactions, could be catastrophic for the United States. In the worst case scenario, a drastic drop in demand for dollar-denominated assets would cause the interest rates on Treasury Securities to skyrocket, sending ripples through the US economy as the value of the dollar plummets. What is certain, however, is that whatever decrease in demand for US debt occurs will constrain the federal government’s ability to spend and the ability of the United States to defend itself. The United States has built its foreign policy around its vast military capability; a sudden budgetary shock and drop in military spending would leave the United States vulnerable as it scrambles to regroup in a new security environment. The ability of the United States to respond to threats across the globe would be diminished, and enemies would be incentivized to take aggressive action to take advantage of this new weakness. In particular, a rapidly militarizing China might be emboldened by its partial decoupling from US economic fortunes to adopt a bolder stance in the South China Sea, threatening US allies and heightening tensions with the United States. While war with China is all but off the table in the status quo, an international system devoid of both US military might and Chinese dependence on US debt as a place to park excess liquidity might lead to the conflict feared on both sides of the Pacific.

In my opinion we are witnessing an Empire end-time struggle of the U.S. dollar hegemony over the world – the result of which may become the end of the dollar as we know it and grave financial pain for the American citizen, or even worse, World War 3.

You’ve probably seen or heard the word ‘hegemony’ before. But what is hegemony? Hegemony is the political, economic, or military predominance or control of one state over others. We are seeing before our eyes – the most critical clash of our time – the increasingly desperate attempts to sustain global dollar hegemony and dominance. What you need to know is that this ongoing battle is coming closer to a tipping point. The dollar is going to collapse. One day.

Geopolitics is dead. Long live geoeconomics. Since the turn of the millennium, the geoeconomics of sanctions and sweeteners has slowly been replacing the geopolitics of diplomacy and war. With U.S. forces actively engaged across a wide swath of Africa and the Middle East, the transition from geopolitics to geoeconomics may not seem all that obvious. But on closer inspection, it becomes clear that military intervention these days is limited to places that lack functioning economies that can be effectively sanctioned. Most of the world, and all of the economically productive world, lies in the sphere of geoeconomics.

That economically productive section of the world, spanning the Atlantic and Pacific basins with North America at its center, incorporates more than 80 percent of global GDP into an interwoven fabric of transnational production networks. In this zone of integration, outright war is obsolete as a tool of foreign policy. Those who suggest that the “great powers” of today might repeat the mistakes of 1914 and stumble into war fail to understand that 21st century economic integration is much deeper than the international trade of the early 20th century. It’s hard to imagine China invading Taiwan when Taiwanese firms employ more than 15 million people in China itself.

In early 2016, Obama Treasury Secretary Jack Lew cautioned that the dollar’s dominance as a global currency rested, in part, on the U.S. government’s reluctance to fully weaponize it. If foreign markets and governments “feel that we will deploy sanctions without sufficient justification or for inappropriate reasons,” he warned, “we should not be surprised if they look for ways to avoid doing business in the United States or in U.S. dollars.” Lew’s case stemmed from the more fundamental view that the dollar’s international role is “a source of tremendous strength for our economy, a benefit for U.S. companies and a driver of U.S. global leadership”—in other words, a role worth keeping. This view is emblematic of American financial governance since the Second World War. U.S. economic analysts, especially at the Treasury, have jealously guarded the dollar’s role and the many benefits it offers: the ability to run large deficits at low cost and disproportionate influence over the structure of the global economy, among others. Yet in their recent article in The New Republic, David Adler and Daniel Bessner argue the U.S. should abandon these advantages. In their view, the dollar’s role has encouraged American militarism and should be relinquished to curb such behavior. Dollar hegemony is not without cost, but to renounce it would be a profound mistake. Adler and Bessner’s view neglects the sizable economic benefits the dollar’s role confers on the U.S., as well as its possible use as an antidote to military adventurism. It ignores the enormous good that can be done with deficit spending, much of which has gone to the American military but could instead fund progressive programs. And it elides the inability of the U.S. and its global trading partners to shift away from dollar dominance without creating worldwide financial distress. Adler and Bessner are right that the U.S. has misused its privilege, but Washington should not abandon it; rather, American leaders should seek to transform it. Generations of American policymakers have been right to protect the dollar’s key currency role for economic reasons. Most notably, dollar hegemony affords the U.S. the ability to run large and prolonged budget and balance-of-payments deficits. The dollar represents 62 percent of allocated foreign exchange reserves, is used to invoice and settle roughly half of world trade, and accounts for 42 percent of global payments. Because governments, banks, and businesses worldwide need lots of dollars, the world market always stands ready to absorb new U.S.-dollar-denominated debt without charging higher interest rates. Adler and Bessner correctly point out that the rest of the world considers the dollar’s role as the world’s reserve currency to be an “exorbitant privilege,” a term coined in the 1960s by then French Finance Minister Valéry Giscard D’Estaing. The ability to spend beyond its means has enabled the U.S. to fund its impressive military might, whether one views that power as the fountainhead of Pax Americana or the source of illegitimate military adventurism. But these economic benefits go beyond just deficits. The demand for dollars also pushes up the dollar’s value against other currencies, enhancing American purchasing power and offering consumers access to imports on the cheap. The dollar’s role also means American firms rarely need to do business in foreign currencies, reducing transaction costs and exchange-rate risks. More broadly, America’s central economic role gives it outsize influence at crucial moments. At the height of the financial crisis that began in 2008, the Federal Reserve was able to inject vital liquidity into the global financial system by selectively offering dollar swap lines to trusted foreign central banks. Dollar hegemony enabled the U.S. to act swiftly, effectively, and on its own terms. In addition, the dollar’s role offers a potent alternative to kinetic military action as a means of pursuing foreign policy objectives. The dollar’s broad use means access to dollar liquidity—which in turn requires access to the U.S. financial system—is essential for foreign governments and businesses. For foreign banks, especially, being cut off from dollar access is essentially a death sentence. That makes sanctions that do so a powerful tool in the international arena. In 2005, for example, the U.S. used the dollar to strike a devastating blow against North Korea without firing a single shot or even formally enacting sanctions. Using authority provided by Section 311 of the Patriot Act, the Department of the Treasury crippled Banco Delta Asia, a bank accused of facilitating illegal activity by the North Korean government, by merely threatening to cut off its access to the American financial system. Deposit outflows began within days; within weeks the bank was placed under government administration to avoid a full collapse. Pyongyang was hit hard, as other banks ceased their business with it to avoid meeting the same fate. Similarly, though the Trump administration has worked hard to undo it, the Joint Comprehensive Plan of Action with Iran to limit the development of nuclear weapons was made possible, in part, by painful dollar sanctions that brought Iran to the table. Far from being a proximate cause of military conflict, the dollar’s central global role has often been used to contain adversaries without military intervention. Still, skeptics are right to point out that the dollar’s role has indirectly funded American interventionism and that dollar sanctions have been overused, provoking the ire of American allies. But these facts suggest we should use our dollar power to forge a more progressive U.S. order, not abandon the advantage altogether. America’s exorbitant privilege need not fund warships and missiles: The same low-interest borrowing could be used to fund a new universal health care system, expand access to higher education, or pursue any number of large-scale social policy objectives, including financing global public goods that no other country or consortium of countries is prepared to fund, such as climate change mitigation.

“Every time the debt ceiling comes up, it's an exercise in political jostling,” said Peter Essele, head of portfolio management for Commonwealth Financial Network. Despite the saber rattling, Essele argued that politicians in both parties have too much to lose to play chicken with the nation’s credit rating. “It's essentially a self-inflicted wound in the middle of a pandemic. During a period when we’re seeing slowing growth and above-average inflation, it would be political suicide for both parties,” he said. “There's certainly a situation where they could put us on the verge, but ultimately, it's in the best interests of politicians to have something worked out.” Some market observers worry, though, that a miscalculation — or even a procedural roadblock if Congress takes the fight down to the wire — could trigger just that kind of a collapse. The U.S. debt was downgraded from AAA to AA+ by Standard & Poor's in 2011. Further black marks on the nation’s credit rating would have greater consequences. “If you go down a couple more notches, that will get people's attention,” Martin said. “If the extraordinary measures are exhausted and something gets missed, I think that gets people's attention.” Beyond the ratings agencies, the U.S. would lose — perhaps permanently — its credibility on the global financial stage, Zandi warned. “It would also further start to undermine the viability of the dollar as a reserve currency, as a foundation of the global financial system,” he said. “Treasuries are the bedrock of the entire financial system. If there's any major disruption to the risk-free rate, the whole house of cards would basically collapse at that point,” Essele said. “The aftermath of that would basically be scorched earth in Washington.”

A failure to raise the U.S. debt ceiling could hurt the status of the greenback, even though China’s renminbi is still a long way from seriously rivaling it as a global reserve currency. That’s the view of U.S. Treasury Secretary Janet Yellen, who told lawmakers on Tuesday that a ceiling-related default would undermine the dollar’s status as an “absolutely secure” asset during turbulent economic times. “China has a long way to go in reforming its financial markets before the renminbi is a serious rival to the dollar,” Yellen said in testimony to the Senate Banking Committee. “But I can’t think of anything more harmful to the role of the dollar than failing to raise the debt ceiling.” The Treasury Department is set to run out of cash on about Oct. 18 unless Congress suspends or increases the debt limit, Yellen said Tuesday. That timeline is somewhat sooner than many on Wall Street had anticipated, and her warning intensified signs of financial-market concern amid an impasse between Republicans and Democrats on addressing the debt ceiling.

There's nothing "more harmful" to the US dollar than failing to lift the debt ceiling, Treasury Sec. Yellen said Tuesday. A government default would erode trust in the dollar, make borrowing more expensive in the US, and could also reshape international finance. Congress is at a stalemate over raising the limit, and lawmakers have just 20 days to do so. The US dollar has served as the world's reserve currency for decades. Banks and governments around the globe trust in its value, and that trust is integral to the US's economic strength. If Congress fails to raise the debt ceiling over the next few weeks, the damage to the dollar would be ruinous, Treasury Secretary Janet Yellen warned Tuesday. Lawmakers are barreling toward an October 18 deadline to either suspend or raise the limit on how much the government can borrow. If that sounds familiar, it's because Congress has already adjusted the ceiling 78 times since 1960. Intense brinkmanship between Democrats and the GOP could end that streak and force the government to default on its massive debt pile. Such an outcome would spark "a financial crisis and economic recession ," and permanently mar the power of the dollar, Yellen said in testimony to the Senate Banking Committee. "I can't think of anything more harmful to the role of the dollar than failing to raise the debt ceiling," the Treasury Secretary said. The fallout would also slam everyday Americans. If government borrowing slams into the debt ceiling, investors will demand greater returns from US Treasurys. That will drive interest rates sharply higher and raise the cost of borrowing for ordinary Americans. Interest payments on mortgages, car loans, and credit cards would skyrocket, Yellen said. FOR YOU MARKETS A young couple accumulated 30 rental properties in less than two years. They share how they got started on their first property and quickly scaled without using their own money. Progress toward a solution, however, is scant. Senate Republicans led by Minority Leader Mitch McConnell have said Democrats will have to raise the ceiling on their own, arguing such action allows them to spend irresponsible amounts of government cash. Democrats maintain raising the limit only covers past spending, and that Republicans' spending under President Donald Trump added trillions in government debt. It's far from the first time Yellen has sounded the alarm on debt-ceiling fallout. Hours ahead of the Senate hearing, Yellen sent lawmakers a letter that set October 18 as the deadline for a debt crisis. The Treasury's "extraordinary measures" to pay the government's debts would run out by that day, she said. The Treasury Secretary previously warned the ceiling would be reached by mid-October. Yellen also penned a September 20 column in The Wall Street Journal that shed more light on the dangers of a government default. Failing to raise the ceiling would result in "economic catastrophe" with harmful effects throughout the US economy, she said. "We could see indefinite delays in critical payments. Nearly 50 million seniors could stop receiving Social Security checks for a time," she said. "Troops could go unpaid. Millions of families who rely on the monthly child tax credit could see delays." Yellen hasn't spelled out the wider effects on international finance, but loss of faith in the dollar as the reserve currency could reshape the global financial system.

Today’s political gridlock around the debt ceiling was avoidable, and is a direct consequence of tax cuts on the wealthiest and corporations. These tax cuts have in fact brought us closer to the debt ceiling. Without them, debt would actually be falling. As new analysis by the Center for American Progress shows, today’s increasing debt ratio is primarily a result of recent tax cuts for the wealthiest: tax cuts since 2001 have added $10 trillion to the debt, and are responsible for over half the increase in the debt ratio since then. 54 Moreover, as the Institute on Taxation and Economic Policy has found, over 80% of the tax cuts passed between 2000 and 2018 went to the richest 40%; and most of it went to the richest 5%. 55 The tax cuts alone resulting from the 2017 Trump Tax Cuts and Jobs Act (TCJA) will have cost $1.7 trillion by the end of fiscal year 2023. 56 The availability of the trillions of dollars of new resourcing through achievable taxation on the very wealthiest Americans exposes the futility of a debt ceiling standoff. The inequality doesn’t stop there: proposed social spending cuts to resolve a standoff result in disproportionate impacts for people living in poverty; women and girls; and people of color.

Reviving America’s strategic position in the world in the wake of President Donald Trump will require a foreign policy that both firmly embraces democratic values and systematically pushes back against authoritarian competitors such as Russia and China. The Trump presidency has already severely undercut the United States’ global standing, causing immense harm to the nation’s strategic position, credibility, and moral authority. Allies are losing faith in American leadership while illiberal regimes are growing in number, stature, and audacity. Trump’s rise reflects a pre-existing deterioration in the vitality of democratic systems, a global phenomenon which his presidency has now turned into a crisis. The damage cannot be reversed simply by electing a different president or reverting to previous foreign policy approaches. Instead, the United States must adopt bold new policies to regain the advantage in great power competition and help vulnerable democracies, including its own, resist authoritarian influence and strengthen a growing global democratic community. This report explains why a democratic values-based foreign policy is the right choice for the United States on both a strategic and moral level. It also offers specific policy recommendations as a roadmap for how the next administration could pursue a democratic values-based foreign policy. Today, democracy is under strain in America and threatened across the globe. The spread of democratic governance, which for decades seemed all but inevitable, has stalled and now faces serious setbacks. Across the democratic world, ordinary people have lost trust in their institutions of government and delivered stunning rebukes to their political establishments. These setbacks have also emboldened authoritarian regimes. Russia, China, and other illiberal states have sought to exploit the openness of democratic societies for their geopolitical advantage and have put forward an alternative autocratic model for politics and economic development that undermines liberal democratic values. America’s enduring security, prosperity, and strength depend on the survival and success of democracy—both at home and abroad—as well as on the resilience of institutions, rules, and norms that protect the liberal democratic values on which the United States’ global standing is built. Yet at the very moment when liberal democracy faces its greatest ideological challenge since the Cold War, President Trump has chosen to reject America’s historic role as leader of the world’s democracies. He has treated democratic allies as ideological foes and murderous dictators as respected friends and equals while stoking nativist and isolationist impulses among the American people. President Trump has also systematically denigrated democratic values and norms at home through unprecedented attacks on the press, the independent judiciary, and law enforcement, as well as political purges of civil servants.1 While U.S. democratic institutions have shown resilience in the face of his challenges, it is already clear that some of the damage Trump does will outlast his presidency. The critical question today is whether the United States after Trump will summon the resolve to lead, protect, and expand the world’s democracies or stand by and suffer the consequences as autocracy and illiberalism crack the foundations of the American-led global system. Advancing a values-based foreign policy after Trump will inevitably invite a vigorous debate over how—or even whether—values should factor into U.S. foreign policy. Critics will likely point to America’s prior foreign policy errors and shortcomings, for example, the use of democracy promotion aims to justify misguided foreign policies such as the invasion of Iraq; the broader U.S. failure to promote democracy in the Middle East in the wake of the Arab Spring; and Cold War-era support for dictators who sided against the Soviet Union. Critics may also point to the urgency of domestic challenges relative to foreign policy ones or fear of U.S. overextension abroad to argue that a values-based foreign policy is unwise or simply not possible. This report takes these critiques seriously. However, in reflecting on the stakes for U.S. leadership, present and future, it arrives at the conclusion that an American foreign policy shorn of American values would ultimately deliver less security and prosperity at home, while making U.S. leadership in the world less sustainable and impactful. This report asserts that an approach that embraces America’s core democratic values will allow the United States to compete more effectively with authoritarian powers such as China and Russia and will deliver better results for the country in the long haul. To address setbacks abroad, the United States will need to pursue a new foreign policy that systematically puts liberal democratic values at the center of its engagement with the world. This will require more than just lip service. It will entail a meaningful, sustained shift in how the United States conducts its foreign relations, launched with quick and decisive action and sustained with persistence and strategic vision. A democratic values-based foreign policy strategy is rooted in faith in democratic self-government, not just as being better than all the alternatives but also as a value in and of itself. Such a foreign policy will also advance U.S. national interests. America’s presence as a prosperous, multi-ethnic, free democratic society poses a challenge to autocrats through the model it sets. Instead of taking this power for granted, it is time for America to cultivate it. At the heart of such an effort should be a realignment of American foreign policy to meet the challenge posed by resurgent illiberalism. This can be done by forging stronger cooperation among democratic states, including in the defense of democracies under assault and the expansion of the global democratic space. In both the short- and long-term, the United States will need to take the following steps: Restore democratic values and norms at home. Work with democratic allies to design and implement a counter-authoritarian playbook to push back against the encroachment on and abuse of the open systems of democratic states. Build stronger international networks of democracies to create a global democratic bulwark. Privilege U.S. relationships with democracies, and reflect this in U.S. policy decisions and spending. Strengthen international support mechanisms for populations nonviolently mobilizing for democracy around the world, while more systematically pressuring countries to uphold human rights and adhere to international law. Reorienting U.S. foreign policy toward a values-based approach will require policymakers to take the long view, recognize the intrinsic strength of democratic governance, and acknowledge that the best way to advance democracy worldwide is through the example set by successful democracies. Critically, it will also require U.S. leaders to heed the lessons of history by recognizing that the most effective way to promote and sustain democracy is supporting and encouraging democratic institutions and movements, rather than employing coercive measures. The United States has numerous tools to vigorously defend its values and advance democracy without seeking to impose it using force. Some may fear that a values-based foreign policy would come at the expense of traditional U.S. interests. But that critique misdiagnoses and underestimates the geopolitical challenge to U.S. interests that a rising illiberal tide presents. American interests will be far more difficult to secure if liberal democracy is supplanted as the pre-eminent and most sought-after political system. There will inevitably be times when U.S. interests will necessitate partnering with nondemocratic regimes. Still, a principled but pragmatic approach can do both: cooperate selectively with such regimes on matters of vital national interest while also recognizing that the greatest strategic gains to U.S. security and prosperity will rest on the success of other democracies and that America’s staying power and strategic resilience will depend on investing in them. The challenge: A democracy crisis at home and abroad For most of the past 50 years, the world has witnessed the dramatic spread of democratic governance throughout the globe. Between 1970 and 2010, the number of democratic states nearly tripled, with transitions to democracy stretching from the southern cone of South America to West Africa, Southeast Asia, and the former Soviet bloc.2 By 2000, more than half the world’s population lived under a democratic government for the first time in recorded history.3 This democratic wave brought a host of political and social rights to hundreds of millions of people and coincided with a historic decline in the incidence of interstate wars.4 The ascendance of democracy globally and the emergence of an increasingly robust set of international rules and institutions fostered a prevailing assumption that a more democratic world was here to stay: Democratic states would prosper and more autocratic states would transition to democracy. But this optimism about democracy has waned due to a number of varying and reinforcing trends. First, democracies have experienced setbacks. Many countries once held up as examples of democratic progress—such as Poland, Turkey, and Venezuela—have experienced a deterioration in rule of law and electoral competitiveness.5 In other countries, such as Thailand and Egypt, democratically elected governments were overthrown by force. Meanwhile, across the Middle East, the democratic promise of the Arab Spring faltered in the face of violent repression. During this same period, illiberal and insular populist movements became resurgent in many established democracies, weakening international cooperation among democratic states and imperiling many of the achievements of the postwar era. These movements occurred most notably in the European Union, where a Center for American Progress and American Enterprise Institute study found that “in the past decade, such parties have moved from the margins of Europe’s political landscape to its core.”6 A key feature of this illiberal resurgence has been elected leaders’ use of strongman tactics to undermine democratic institutions and norms. In Turkey, President Recep Tayyip Erdoğan has gained increasing control over the political, economic, and military aspects of the Turkish state.7 In Hungary, Prime Minister Viktor Orbán has used xenophobic rhetoric and crony capitalism to erode political checks and balances and consolidate power.8 Poland’s current leaders and others have followed Orbán’s playbook, attacking the independence of the country’s media and judiciary and campaigning on an exclusionary vison of Polish society.9 President Rodrigo Duterte of the Philippines, meanwhile, has flaunted his disdain for the rule of law and human rights as he pursues a campaign of mass violence against drug users and dealers, which has included state sponsorship of extrajudicial killings.10 In all of these cases, attacks on democratic institutions and norms have been carried out by democratically elected leaders themselves.11 Even in the United States, President Donald Trump is showing signs of authoritarian envy, regularly criticizing the media, the judiciary, and law enforcement, while openly admiring some of the world’s most brutal dictators. As Trump said of Kim Jong Un, who rules over a totalitarian dictatorship where people are thrown into labor camps for criticizing the government: “He’s the head of the country, and I mean he’s the strong head. … Don’t let anyone think anything different. He speaks and his people sit up at attention. I want my people to do the same.”12 These trends do not mean in any way that democracy is a lost cause or that the global tilt toward illiberalism is irreversible. Demand for democratic change and greater civil and political rights remains a potent force that transcends culture and geography, as recent events in countries as diverse as Burkina Faso, Armenia, and Malaysia illustrate.13 But these positive developments do not negate the democratic backsliding that has occurred elsewhere. Across the world, democracy faces an uncertain future. Second, confidence in democratic politics has waned, even in states with long traditions of representative government. In the past two decades, democracies have struggled to deliver economic results for their people. Even democracies that have experienced rapid growth have too often seen it disproportionally benefit small elites or specific regions, while causing significant disruption elsewhere in society.14 The Great Recession of 2008 and years of painfully slow recovery helped fuel a sharp decline in trust in government institutions across the democratic world.15 Stagnation and deepening inequality, coupled with demographic change and political dysfunction, have created fertile ground for distrust, division, and demagoguery that illiberal populist parties have exploited. These groups draw on xenophobic and racist messaging but also resentment at economic stagnation and elite capture of supposedly democratic institutions. In some cases, they have also made both subtle and overt appeals to authoritarian modes of governance.16 The United States has not been immune to this democratic malaise. Americans today distrust their government in greater numbers than at any point in modern U.S. history, including the height of the Vietnam War and during the Watergate scandal.17 Two of the most significant drivers of distrust have been the rise of unfettered special interest spending to distort U.S. politics and the political paralysis that has arisen from the growth of counter-majoritarian practices such as gerrymandering and abuse of the legislative filibuster.18 These problems have fed a widespread perception that the U.S. political system no longer represents the interests of ordinary Americans nor does it address grave challenges such as inequality, racial injustice, and opioid addiction. Such failures, compounded by foreign policy failures in Iraq and Afghanistan, have contributed to a profound loss of faith in American institutions that Donald Trump effectively channeled in his bid for the presidency. Third, illiberal and authoritarian regimes have sought to encourage and exploit the crisis of confidence in democratic states in order to weaken them from within, assert the superiority of their own models, and attack the foundations of the post-Cold War geopolitical order. Of these revisionist states, Russia has been the most overt and aggressive in its challenge to liberal democracy. Despite a stagnating economy and shrinking population, Moscow has launched ambitious measures to reestablish a sphere of influence in nearby countries, fueled right- and left-wing populist movements across Europe and North America, and sowed confusion and discord among the democratic citizenries of EU states and NATO members, including America.19 The tools it has deployed in this campaign include disinformation operations using both traditional and social media; targeted use of corruption to cultivate political proxies; cyberespionage aimed at influencing electoral outcomes; covert funding of insurgent political movements; and exploitation of neighbors’ energy insecurity.20 Together, Russian tactics constitute a new authoritarian playbook to which the United States and other democratic powers have yet to develop an effective response.21 If Russia has been the boldest challenger, the most serious long-term external threat to democratic governance comes from China. Beijing has been—and will almost certainly remain—an essential partner of the United States in solving major global challenges, from climate change to nonproliferation. But as China amasses power, too often it has put its newfound capabilities and immense resources behind a model of political and economic development and interstate cooperation that neither requires nor encourages liberal democratic values.22 In fact, China’s full-throated assertion of narrow national interests in areas such as internet governance, free speech, trade, and human rights often actively undermines democratic values.23 China has also sought to use economic coercion to undermine U.S. security alliances and partnerships in the Asia-Pacific region and erode cohesion among EU member states.24 Meanwhile, Beijing has used its economic and growing military might to immunize itself from the consequences of flouting long-standing international principles such as freedom of navigation.25 Tragically, these developments coincide with President Trump’s abandonment of America’s commitments to global leadership, including the Iran nuclear deal, the Paris climate agreement, and the Trans-Pacific Partnership. Fourth, the institutions, rules, and norms that underpin the liberal international order have not lived up to expectations, providing space for illiberal and undemocratic states to seize the advantage. The global and regional organizations established since World War II were built to protect and encourage liberal values, including universal human rights and rules-based international conduct. But these institutions largely reflect the world of 1945 and have not been adequately updated to recognize the massive shifts in global economic and political power. Today, many of these institutions are losing the capacity to perform their basic missions because of inherent structural flaws, outdated mechanisms, and deliberate efforts by world powers to undermine or circumvent them. The U.N. Security Council is rarely able to meaningfully respond to gross abuses of human rights or even outright aggression.26 The United States and other democracies face growing challenges in upholding international rules or solving big problems such as chemical weapons use in Syria, ethnic cleansing in Myanmar, China’s violations of international law in the South China Sea, and Russia’s use of gray-zone tactics in Ukraine. The World Trade Organization has likewise struggled to address abuses of its trade rules by states such as China.27 Without more effective and coordinated efforts to push back against these abuses and transgressions, authoritarian governments will continue to probe the boundaries of international rules and norms in ways contrary to both U.S. values and interests. Fifth, economic globalization has exposed autocratic systems to democratic values, but it has also exposed democratic systems to autocratic influence. As the globalization of the world economy accelerated in the 1990s, experts assumed that integration would result in a more liberal future.28 Authoritarian states, once closed, would be opened up and exposed to the practices and values of liberal democratic states. Gradually, these autocratic states would begin to take on more liberal characteristics, accelerating the trend toward greater democratization. But globalization has proved to be a two-way street. Liberal states have also been exposed to the influence of authoritarian states. Foreign investment from autocratic regimes has served as a vehicle to influence their recipients, most notably in the form of Russian cultivation of political actors across Eastern Europe.29 The corrupt and uncompetitive inducements of autocrats have at times proved a more attractive path than more transparent business and investment practices favored by democracies.30 The immense wealth concentration in autocratic states—and liberal ones as well—has spawned a complex transnational network of illicit finance that has distorted both developed and developing economies.31 Lastly, the Trump administration is now undermining the democratic values and international rules the United States has traditionally sought to uphold. Although the challenges facing global democracy have been building for many years, they have accelerated since 2016 in part because of the policies and rhetoric of the current occupant of the Oval Office. In a remarkably short period of time, President Trump has taken dramatic steps to abandon America’s long-standing moral leadership in the world. President Trump’s first secretary of state publicly declared that the United States would not prioritize human rights.32 The Trump administration has vigorously attacked America’s democratic allies while showing an affinity for autocrats and dictators.33 On an almost daily basis, the president makes clear his disregard for many long-standing norms of American government, such as separation of personal and public interests and respect for the autonomy of the judiciary and law enforcement. While in the past American foreign policy has been prone to charges of hypocrisy—such as claiming to uphold democracy while backing autocrats—the Trump administration has abandoned any pretense of concern for democratic values. This sharp shift in America’s approach to the world under President Trump has been immensely destabilizing in ways that are only beginning to become clear.34 The answer: A democratic values-based foreign policy Donald Trump is hardly the only skeptic of a democratic values-based foreign policy. A range of policymakers and scholars of foreign policy, including some progressives, have argued that the United States should de-prioritize the promotion of democratic values in its foreign policy. Some make the argument that the United States needs to take a more hardheaded and transactional approach to advance its security and economic interests. However, this report argues that not only are these false choices but that the United States should see democratic values as a U.S. comparative advantage—and not a weakness—in global competition. America’s liberal democratic values have been key to building, enhancing, and sustaining America’s geopolitical power. With the global backsliding of democracy and the rise of alternative authoritarian models, it is ever more urgent to rediscover the power of core American values to secure U.S. interests in the long term. A democratic values-based foreign policy is worth pursuing for three key reasons. First, it will advance long-term U.S. economic and security interests abroad and create a safer and more prosperous world. Compared with authoritarian regimes, democracies are less likely to go to war against each other, less likely to ally against the United States, less likely to sponsor terrorism, less likely to experience famine or produce refugees, and more likely to adopt market economies and form economic partnerships with other democracies.35 Since liberal democracies tend to share values rooted in rule of law, fair competition, and transparency, they are natural partners in promoting the stable, prosperous, open, and peaceful international environment that the United States ought to cultivate through its foreign policy. It is true that the process of democratization can be long and uneven and can sometimes produce destabilizing and aggressive state behavior. However, mature and established democracies are more stable, peaceful, and prosperous, and more full-fledged democracies mean more economic and security benefits for the United States.36 Furthermore, the global system of democratic alliances, institutions, and norms the United States helped create and lead after World War II has improved material conditions and brought peace and prosperity to hundreds of millions of people across the world. Bolstering that democratic system and the democratic values that underpin it will ensure that future generations can also enjoy the fruits of democracy and a liberal world. Second, this kind of foreign policy will help secure an American advantage in great power competition by advancing a compelling alternative and strengthening the global democratic bulwark. Although the challenge posed by illiberal regimes today has evolved since the Cold War, there are still lessons to be drawn from that era. One of the most significant factors in the collapse of the Soviet Union was the powerful example and contrast set by flourishing democratic societies in the United States and Europe. Today, one of America’s greatest strategic assets is its global network of democratic allies and partners. The power of that democratic network, even underutilized as it is today, stands in stark contrast to what today’s illiberal and authoritarian regimes can offer: namely, political order purchased at the cost of extreme corruption, xenophobia, oligarchy, and arbitrary use of state power. To succeed, any approach to countering the authoritarian playbook must present a compelling alternative. This means that the United States, alongside its democratic allies and partners, must demonstrate that liberal democracy represents the best path to deliver inclusive prosperity, rule of law, and a just and equal society to a country’s citizens.

China and the U.S. are the two strongest world powers. Instead of working together to make the world better, each country is trying to prove that their system, American capitalism or Chinese socialism, is the best for most countries. Will the Chinese manage to convince the citizens of other countries, that China is more serious than the U.S. in improving the well-being of more people around the world? What is the U. S. Message to other Countries about Why American Capitalism is the better System? The U.S. does not pursue a mission of “common prosperity.” In American capitalism, the rich continue to get richer, the middle class continues to get smaller, and the huge number of poor people remain poor with huge debt. The U.S. government does provide assistance in the form of social security, food stamps, health insurance, aid to the poor and a large number of other social programs. In addition, many of the rich donate money to good causes to improve education, health and other services to the middle class and poor. At the same time, it can be argued that the great need is to get more money to flow into the hands of the working class. Today the rich only pay 37% of their top bracket income to the government’s needed revenue. Proposals include establishing a more progressive income tax system, adding a wealth tax, closing tax loopholes, and taxing capital gains income at the normal income tax rate. The U.S. offers to the rest of the world a different message than China. The U.S. is the land of freedom and opportunity. For people living in countries with poor opportunities or with little freedom, the U.S. remains a hope for such people. They would rather move to the U.S. than move to China. They could hope to live a better life in the U.S. and even have a chance to become a millionaire. Many immigrants come to the U.S. and they, or at least their children, will end up living a better life and with more freedom. Migrants come for more opportunities and freedom that are not available in their countries. Should the U.S. Strive to Make Everyone Prosperous? Historically, the U.S. favors making the cake bigger and worries less about how the cake is sliced. Capitalists argue that the benefits of a bigger cake flow down to the working class gradually in the form of more jobs and possibly higher wages. More wealth will “trickle down” and “All boats will rise.” But the wealth never really “trickled down to the poor.” If anything, the wealth trickled up” to the rich. The rich used their lobbyists in Congress to write rules that create tax loopholes that benefit the already affluent. The rich put their money in stocks and bonds and they live on capital gains earnings that are taxed at a lower rate than labor earnings. American Capitalism provides jobs but many are not receiving livable wages. The vast majority of Americans must use credit to achieve a livable standard of living. The ordinary credit card pays for their groceries, new clothing, doctor bills, college education and sundry other items. Credit has been the key to America’s economic growth! If we did not have credit, our economic growth would be limited to our actual incomes. People would buy far fewer cars, appliances, and vacations. Some people would be more likely to protest or rebel. Credit is the miracle that allows Americans to live a good life beyond their actual income. The major cost is spending a significant part of their income to pay interest on the debt. If they fail to pay interest, they must give up their car or home or declare bankruptcy. The business community benefits by achieving a much higher level of sales by extending credit. The business community benefits in another way. Businesses can continue to pay unlivable wages! If citizens couldn’t get credit, they would either live without the good things in life or protest or rebel. The availability of easy credit prevents a worker uprising. Credit makes it possible for poor people to have cake and eat it too. People can live a better life because the credit card is available. Credit makes it possible for consumers to have more than their income allows but at the cost of high indebtedness and high interest charges. Americans today are living with 24.5 trillion dollars of debt. They won’t ever be able to liquidate this debt. Nor does business want the debt to go away. Businesses and banks depend on the steady flow of interest to keep moving into their accounts. As workers see the growing debt and the gap between their lives and the lives of the rich, some might press for organizing unions and demanding higher pay. Some unions will strike for high wages. They will oppose CEOs being paid 320 times more than the average worker. In the past, businesses would use legislation and the police to stop workers from organizing or striking. But today’s citizens and employees will press legislators to protect unionization. If workers organize and win higher wages, some companies will make lower profits unless their productivity increases or they move to lower cost areas. Some companies will have less money to invest in R&D and grow their business. Some companies will close down and unemployment might increase. Hopefully, there might be a middle way. The basic remedy lies in tax policy. The taxes on the rich are too low. The rich in the U.S. pay 37% on the top bracket of their income. The rich in the Nordic countries pay 60–70% on the top bracket of their income. The Nordic countries use the higher tax revenue to make healthcare free, higher education free, and child and parent benefits freer, along with substantially longer vacations than the two-week vacations in the U.S. The remedy is straightforward: raise the income tax rate on the rich, pass a wealth tax and raise the estate tax. These measures would hardly affect the lives of the rich while at the same time would bring more education, healthcare and childcare to the vast majority of citizens. Critics say that the Nordic countries are smaller and more homogenous and agree to these higher taxes because they can see the benefits that it brings to their countries. They argue that the U.S. is too multi-cultural and divided politically to pass Nordic level taxes. The question is whether the Democratic party might want to embrace the goal of “common prosperity.” Clearly the left wing of the party with leaders such as Senators Bernie Sanders and Elizabeth Warren would be happy to announce the cause of “common prosperity.” Ray Dalio, an American billionaire and long-time supporter of the Chinese government, praised the common prosperity campaign and said that the US “needs more common prosperity” along with many other countries.

The Community of Democracies has a new imperative: to demonstrate to itself and to the world that the core values of democracy and human rights are not only goods in and of themselves, but also the most promising path to peace and security in an increasingly turbulent world. The report the authors present here to their representatives and to all engaged citizens from civil society, parliaments, businesses, and youth seeks to show that the norms and practices of liberal democracy and human rights do in fact lead to better security outcomes over time and across multiple dimensions.

Based on a year-long research project gathering the empirical evidence on the relationship between democracy and security, and on accumulated experience with combating the scourge of extremist violence and terrorism, the authors can say with confidence that liberal democracy, when allowed to consolidate and flourish, is the best path toward achieving domestic and international peace and security. A series of policy briefs covering a range of security-related issues from civil war to digital technology were commissioned by the Community of Democracies’ Permanent Secretariat and prepared by the Brookings Institution’s Foreign Policy Program and the Institute for Security Studies.

China has an image problem, and Xi Jinping’s "wolf warrior" diplomacy is largely to blame. At least that’s how most in the United States and Europe see it. But this narrative fails to recognize the headway Beijing is making in other parts of the world. What many fail to realize is that Beijing is conducting an effective diplomatic offensive in the developing world, and it poses a real challenge to U.S. global leadership.

To be sure, the abrasive tone China has presented to the international community has caused serious problems in Beijing’s relations with much of the developed world. Even many of China’s most important trading partners are increasingly aligning with the U.S., undoing decades of painstaking efforts by a smoother generation of diplomats. This is a weakness in Xi’s diplomacy, and Washington should capitalize on it.

The United States is reshaping how it uses foreign aid in order to compete with China. The executive branch and Congress are exploring efforts — some controversial and still few on details — to better leverage foreign aid as a tool to prevail in an era of great power competition.

This competition is one over resources, influence and nothing short of the world order’s future contours — or, as the 2017 National Security Strategy aptly proclaims: “between those who value human dignity and freedom and those who oppress individuals and enforce uniformity.”

From 1930 to 1980 the top marginal income tax rate in the United States averaged 78 percent; it exceeded 90 percent from 1951 to 1963. These quasi-confiscatory top rates championed by Franklin Delano Roosevelt and his successors in office were meant to reduce the income of the superrich: not simply to achieve tax justice, but to compress the income distribution. These tax rates applied to extraordinarily high incomes only, the equivalent of more than several million dollars today; only the ultrarich were subjected to them. In 1960, for example, the top marginal tax rate of 91 percent started kicked in at an income threshold that was nearly 100 times the average national income per adult, the equivalent of $6.7 million in income today. The merely rich—high-earning professionals, medium-size company executives, people with incomes in the hundreds of thousands in today’s dollars—were taxed at marginal rates in a range of 25 percent to 50 percent, in line with what is typical nowadays (for instance, in states such as California and New York, when you count state income taxes).According to the evidence, the policy of quasi-confiscatory tax rates for sky-high incomes achieved its objective. From the late 1930s to the early 1970s, income inequality fell. The share of pre-tax national income earned by the top 1 percent was reduced by a factor of two, from close to 20 percent on the eve of World War II to barely more than 10 percent in the early 1970s. In 1960, for example, only 306 families earned more than $6.7 million in taxable income a year (the threshold above which income was imposed at 91 percent). This tax policy reflected the view that extreme inequality hurts the community; that the economy works better when rent extraction is discouraged (indeed, the economy grew strongly in the mid twentieth century); and that unfettered markets lead to a concentration of wealth that threatens our democratic and meritocratic ideals. Extreme wealth concentration, like carbon emissions, imposes a negative externality on the rest of us. The point of taxing carbon is not to raise revenue but to reduce carbon emissions. And the point of high tax rates on the very highest incomes is not fundamentally to fund government programs. They are aimed at reducing the income of the ultra-wealthy. The reason for reducing those incomes is not, as critics sometimes say, to give vent to envy. It is to disrupt privilege, impede rent extraction, and protect democracy. When 90 cents out of any extra dollar earner will go to the IRS, we will disincentivize negotiating a $20 million salary, earning millions by creating a zero-sum financial product, and spiking the price of patented drugs. Quasi-confiscatory tax rates equalize the distribution of pre-tax income, make the market place more competitive, and limit the concentrations of economic power that pave the way for undemocratic concentrations of political power. To see how wealth taxation might work to reduce such concentrations of wealth and power, let’s contrast a moderate with a radical wealth tax. A moderate wealth tax, say with marginal tax rates of 2 percent above $50 million and 3 percent above $1 billion, would generate a lot of revenue—about 1 percent of GDP each year, according to our estimates. Consider now a more radical wealth tax with a marginal tax rate of 10 percent above $1 billion. A person with $1 billion in wealth would pay the same $19 million as under a moderate wealth tax. A radical wealth tax would not make it harder to become a billionaire; it would make it harder to remain a multi-billionaire. A person with $2 billion would pay almost 5 percent a year, a decabillionaire such as David Geffen 9 percent, and a centibillionaire such as Bezos 10 percent (instead of 3 percent with a moderate wealth tax). Just as Roosevelt’s 90 percent top marginal income tax sharply reduced the number of families earning more than $10 million of today’s dollars, a radical wealth tax would eventually lead to a reduction in the number of multi-billionaires. More than collecting revenue, it would de-concentrate wealth. There would still be multibillionaires, no doubt. If a wealth tax of this higher sort had been in place over the last decades, Zuckerberg would still be worth $21 billion in 2018—instead of the $61 billion recorded by Forbes. Why? Because Zuckerberg’s wealth has grown at a rate of 40 percent a year since 2008 when he first became a billionaire. A 10 percent annual wealth tax would not have stopped his stratospheric ascent. But a more mature billionaire such as Bill Gates would be worth “only” $4 billion—instead of $97 billion in 2018—because he has been a billionaire for over three decades now, giving the radical tax more time to reduce his wealth. If a radical wealth tax had been in place since 1982, most of the 400 richest Americans would still be billionaires in 2018, but they would be only one third as wealthy as they currently are (see graph 1). Their share of U.S. wealth would be similar to what it was back in 1982, before the wealth inequality took off. A radical wealth tax would have raised $250 billion in revenue from the 400 richest Americans alone in 2018. That is more than 1 percent of GDP. But if such a tax had been in place since 1982, it would have only raised $66 billion from the 400 wealthiest families in 2018, while a moderate wealth tax, despite its much lower rate, would have yielded almost as much—about $50 billion. In the long run, a radical wealth tax erodes top fortunes so much that it reduces the taxes paid by the ultrarich. Is a radical wealth tax worth it, then? Would society benefit from curbing huge fortunes, even if it means lower tax collection at the top end? Over the years, our own thinking about this question has evolved as the stagnation of working-class income, the boom in extreme wealth, and the threats to democracy became clearer. Perhaps yours will too.

Catastrophic consequences for civilization. The consequences of this rapid pruning of the evolutionary tree of life extend beyond the obvious. There could be surprising effects of biodiversity loss that scientists are unable to fully anticipate in advance. For example, prior research has shown that localized ecosystems can undergo abrupt and irreversible shifts when they reach a tipping point. According to a 2012 paper published in Nature, there are reasons for thinking that we may be approaching a tipping point of this sort in the global ecosystem, beyond which the consequences could be catastrophic for civilization. As the authors write, a planetary-scale transition could precipitate “substantial losses of ecosystem services required to sustain the human population.” An ecosystem service is any ecological process that benefits humanity, such as food production and crop pollination. If the global ecosystem were to cross a tipping point and substantial ecosystem services were lost, the results could be “widespread social unrest, economic instability, and loss of human life.” According to Missouri Botanical Garden ecologist Adam Smith, one of the paper’s co-authors, this could occur in a matter of decades—far more quickly than most of the expected consequences of climate change, yet equally destructive. Biodiversity loss is a “threat multiplier” that, by pushing societies to the brink of collapse, will exacerbate existing conflicts and introduce entirely new struggles between state and non-state actors. Indeed, it could even fuel the rise of terrorism. (After all, climate change has been linked to the emergence of ISIS in Syria, and multiple high-ranking US officials, such as former US Defense Secretary Chuck Hagel and CIA director John Brennan, have affirmed that climate change and terrorism are connected.) The reality is that we are entering the sixth mass extinction in the 3.8-billion-year history of life on Earth, and the impact of this event could be felt by civilization “in as little as three human lifetimes,” as the aforementioned 2012 Nature paper notes. Furthermore, the widespread decline of biological populations could plausibly initiate a dramatic transformation of the global ecosystem on an even faster timescale: perhaps a single human lifetime. The unavoidable conclusion is that biodiversity loss constitutes an existential threat in its own right. As such, it ought to be considered alongside climate change and nuclear weapons as one of the most significant contemporary risks to human prosperity and survival.