Wednesday, September 19, 2012

Everything is about Strength?

Mitt Romney's Presidential campaign is dealing with the release of a bootleg video from a private fundraising event in which he spoke in unflattering terms about many Americans.  Naturally the press is focusing on him calling 47% of Americans victims who he can't hope to persuade to take responsibility for their own lives, but as a negotiator there was a different comment that alarmed me:

My own view is that that the centerpiece of American foreign policy has to be strength. Everything I do will be calculated to increasing America's strength. When you stand by your allies, you increase your strength. When you attack your allies, you become weaker. When you stand by your principles, you get stronger. When you have a big military—that's bigger than anyone else's—you're stronger. [Unintelligible.] When you have a strong economy, you build America's strength. For me, everything is about strength and communicating to people what is and is not acceptable. It's speaking softly but carrying a very, very, very big stick.

There's nothing wrong with strength.  One of the first pieces of advice I give to people is to strengthen their bargaining position.  If you can improve your BATNA (and show your counterparts that it's improving) or worsen theirs, this can greatly improve your outcomes.  I agree with Romney that having a strong military and a strong economy are assets in diplomacy.

So why don't I like what Romney is saying?

It's his conclusion -- that "everything is about strength and communicating to people what is and is not acceptable."  That is a negotiating philosophy that could be very dangerous if applied to foreign policy.

Nations, like people, don't like being pushed around.  When long-term relationships matter and when interests and power are complex, the best negotiators use positions of great strength to create a context for cooperation and collaboration.  Romney's instinct (at least according to this talk) is to use his power advantage to force the terms of negotiation.  This can be effective, particularly in a single negotiation, but the natural response is escalation and resistance.

Have you ever had a boss who consistently used his or her power advantage to force your compliance? How loyal did you feel to that boss or to that company?  How motivated were you to help that boss?

Moreover, you can't always have the upper hand.  That may not be obvious to Romney.  One of the ways private equity firms like Bain make money is by identifying situations where a particular stakeholder in a company is capturing more value than their negotiating strength merits.  The most obvious form is when a company's workers are being paid more than alternative labor sources, whether those alternatives are unemployed local workers or overseas.  In those circumstances, the private equity firm can buy the company for what it's worth under the current distribution and then increase its value by renegotiating.  These negotiations are typically not aiming for "collaborative" and instead might take the form of, "We're firing you all, but you can reapply for your jobs with much lower pay."

Whatever you think of this tactic, it's important to note that private equity companies get to choose their battles.  If there isn't a big mismatch between what a company's workers are paid and the alternatives then the private equity firm moves on and looks for a different company to buy.

Presidents don't have that luxury.  Even a nation as powerful as ours will regularly negotiate with counterparts who have significant power with which to advance their interests.  An approach to negotiation based around superior strength enabling one to dictate terms -- our way or the highway -- is a hammer in a world full of non-nails.

Consider the first Gulf War.  Jim Baker's assembly of a world coalition against Saddam Hussein is one of the more impressive diplomatic accomplishments of modern times.  He accomplished it not by dictating terms but by dealing with allies on balanced terms.  Mutual interests, value-creating trades and problem solving were his primary tools; not a big stick that let him tell them what was acceptable.

Finally, some forms of strength have a cost.  Wanting a strong economy is almost an empty statement unless you can find a President who wants a weak one.  Standing by our principles is something I applaud and I'm glad to hear Romney say it.  Having a strong military certainly has its uses, but it also has significant costs.  There's the obvious financial cost, but there's also the policy cost.  History shows that it's extremely difficult to have a dominant military without using it.  Just as Republicans correctly point out that government has a much easier time starting a new spending program than closing one down, our military does not only serve to punish bad actors or to protect our core interests.  It inevitably comes to the forefront of policy options and becomes entangled in our external relations.

Even when we don't use our military, it functions as an implicit threat that naturally invokes resentment rather than trust.  This isn't unique to us; a study of history finds that the neighbors of any great military power tend to view it with suspicion.  If one side arranges things so they always have the option of force, the other sides are having it arranged to that force can always be used against them.

Of course, this is one snippet from a fundraiser, and I'm adding my own interpretation.  Perhaps by "communicating what is and is not acceptable" Romney merely means that attacks on U.S. interests won't be ignored and I should emphasize his discussion of values.  At the same time, I can't help but think that if someone came to the negotiating table brandishing "a very, very, very big stick" I'd start looking for other partners or a stick of my own.  Foreign policy is negotiation; if Governor Romney becomes President I hope he has a broader repertoire of negotiation tools than this one clip suggests.

6 comments:

  1. Nothing about the NFL Ref negotiations?

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  2. Actually, I started writing something but got distracted by life. I really should do a recap. :)

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  3. Hi,

    I have a quick question about your blog, do you think you could e-mail me?

    Brian

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  4. This comment has been removed by a blog administrator.

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