The Atlantic | December 2003 | The Bubble of American Supremacy | Soros: "Even so, September 11 could not have changed the course of history to the extent that it has if President Bush had not responded to it the way he did. He declared war on terrorism, and under that guise implemented a radical foreign-policy agenda whose underlying principles predated the tragedy. Those principles can be summed up as follows: International relations are relations of power, not law; power prevails and law legitimizes what prevails. The United States is unquestionably the dominant power in the post-Cold War world; it is therefore in a position to impose its views, interests, and values. The world would benefit from adopting those values, because the American model has demonstrated its superiority. The Clinton and first Bush Administrations failed to use the full potential of American power. This must be corrected; the United States must find a way to assert its supremacy in the world."

our success depends greatly on our dominant position at the center of the global capitalist system, and we are not willing to yield it.

A little more than a year later the United States could not secure a UN resolution to endorse the invasion of Iraq. Gerhard Schröder won re-election in Germany by refusing to cooperate with the United States. In South Korea an underdog candidate was elected to the presidency because he was considered the least friendly to the United States; many South Koreans regard the United States as a greater danger to their security than North Korea. A large majority throughout the world opposed the war on Iraq.
September 11 introduced a discontinuity into American foreign policy. Violations of American standards of behavior that would have been considered objectionable in ordinary times became accepted as appropriate to the circumstances. The abnormal, the radical, and the extreme have been redefined as normal. The advocates of continuity have been pursuing a rearguard action ever since

Bubbles do not grow out of thin air. They have a basis in reality—but reality as distorted by a misconception. Under normal conditions misconceptions are self-correcting, and the markets tend toward some kind of equilibrium. Occasionally, a misconception is reinforced by a trend prevailing in reality, and that is when a boom-bust process gets under way. Eventually the gap between reality and its false interpretation becomes unsustainable, and the bubble bursts.
Exactly when the boom-bust process enters far-from-equilibrium territory can be established only in retrospect. During the self-reinforcing phase participants are under the spell of the prevailing bias. Events seem to confirm their beliefs, strengthening their misconceptions. This widens the gap and sets the stage for a moment of truth and an eventual reversal. When that reversal comes, it is liable to have devastating consequences. This course of events seems to have an inexorable quality, but a boom-bust process can be aborted at any stage, and the adverse effects can be reduced or avoided altogether. Few bubbles reach the extremes of the information-technology boom that ended in 2000. The sooner the process is aborted, the better.

The quest for American supremacy qualifies as a bubble. The dominant position the United States occupies in the world is the element of reality that is being distorted. The proposition that the United States will be better off if it uses its position to impose its values and interests everywhere is the misconception. It is exactly by not abusing its power that America attained its current position.

Where are we in this boom-bust process? The deteriorating situation in Iraq is either the moment of truth or a test that, if it is successfully overcome, will only reinforce the trend.

Whatever the justification for removing Saddam Hussein, there can be no doubt that we invaded Iraq on false pretenses. Wittingly or unwittingly, President Bush deceived the American public and Congress and rode roughshod over the opinions of our allies. The gap between the Administration's expectations and the actual state of affairs could not be wider. It is difficult to think of a recent military operation that has gone so wrong. Our soldiers have been forced to do police duty in combat gear, and they continue to be killed
Yet there are more places than ever before where we might have legitimate need to project that power. North Korea is openly building nuclear weapons, and Iran is clandestinely doing so. The Taliban is regrouping in Afghanistan. The costs of occupation and the prospect of permanent war are weighing heavily on our economy, and we are failing to address many festering problems—domestic and global. If we ever needed proof that the dream of American supremacy is misconceived, the occupation of Iraq has provided it. If we fail to heed the evidence, we will have to pay a heavier price in the future.
The war on terrorism as pursued by the Bush Administration cannot be won. On the contrary, it may bring about a permanent state of war. Terrorists will never disappear. They will continue to provide a pretext for the pursuit of American supremacy. That pursuit, in turn, will continue to generate resistance. Further, by turning the hunt for terrorists into a war, we are bound to create innocent victims. The more innocent victims there are, the greater the resentment and the better the chances that some victims will turn into perpetrators.
the framework within which to think about security is collective security. Neither nuclear proliferation nor international terrorism can be successfully addressed without international cooperation. The world is looking to us for leadership. We have provided it in the past; the main reason why anti-American feelings are so strong in the world today is that we are not providing it in the present.