Post Wall, Post Square: Rebuilding the World after 1989

Gorbachev walked off the boat – waving to the onlookers, a broad smile on his face – and an equally cheerful Reagan greeted him on the quayside. The two delegations were soon sitting in the commandant’s residence on Governors Island. Conversation during their meeting was mostly light and nostalgic: it was not a ‘negotiating session’, as Gorbachev remarked to the media present. Yet it was in some way ‘special’, as Bush put it, because of his own double role, looking to the past and the future.[26]

After the journalists and photographers had left, Reagan and Gorbachev reminisced about their first encounter in Switzerland a mere three years before, and the president offered the Soviet leader a memento – a photo of the moment they met in the parking lot with Reagan’s handwritten inscription that they had ‘walked a long way together to clear a path to peace, Geneva 1985–New York 1988’. Gorbachev was touched and said how much he valued their ‘personal rapport’. Reagan agreed. He felt proud of what they had ‘accomplished together’: two leaders who had the ‘capability of creating the next world war’ had decided ‘to keep the world at peace’[27] and so they had laid a ‘strong foundation for the future’. This was possible, he claimed, because they had always been ‘direct and open’ with each other. What Reagan did not mention – naturally, because this was a cosy wander down memory lane – was that their Moscow summit in May/June had failed to ‘crown’, as Gorbachev hoped, the procession of meetings with a treaty to reduce their strategic offensive weapons – START I. This, as Gorbachev emphasised in his UN speech, was significant unfinished business.[28]

Reagan asked Bush whether he wanted to add anything. The vice president chose to comment only on the symbolism of the photo. The two countries had come a long distance in the last three years, he said, going on to express the hope that in three years’ time there would be ‘another such picture with the same significance’. Bush said he wanted to build on what President Reagan had done, working with Gorbachev. Nothing that had been accomplished ought to be reversed. But he added that he would just need ‘a little time to review the issues’. Gorbachev wanted assurances that Bush would follow the path laid down by Reagan. Yet the vice president would not be drawn, using the need to construct a new Cabinet as his excuse. His theory, he said, was to ‘revitalise things by putting in new people’. He wanted to ‘formulate prudent national security policies’ but insisted that he didn’t want to ‘stall things’ or ‘set the clock back’. Bush was trying to keep the discussion loose and vague, using platitudes to keep his options open.[29]

There was, however, no let-up from the Soviet leader. His eyes firmly on the future, Gorbachev continued to probe Bush over lunch. He fished for substantive reactions to his UN speech. Shultz merely said the audience had been ‘very attentive’ and the final burst of applause was totally ‘genuine’. Bush, apart from commenting that Gorbachev seemed to have had ‘a full house, with every seat filled’, stayed silent. Gorbachev stressed that he was committed to all that he had said at the UN about cooperation between their countries.[30] While admitting that there were ‘real contradictions’ between them, particularly on regional issues, he insisted that Washington should not be suspicious of the Soviet Union. Turning directly to Bush, he said that it was ‘a good moment to make that point, with the vice president there’. The Soviet leader did a quick tour d’horizon of crisis hotspots around the world and then reprised his main theme about the cooperation he and the president had managed to build up. Glancing pointedly again at Bush as well as Reagan, he declared that ‘continuity was the name of the game’ and that ‘we should therefore be able to work together on all regional problems in a constructive way’. There was still no reaction from Bush, so Gorbachev tried to put him on the spot. ‘If the next president has studies under way, and has some remarks or suggestions on these issues I would like to hear from him.’ Bush again declined to be drawn. In the end Gorbachev simply joked that ‘the important thing was to make life easier for the next president’.[31]

Throughout the meeting, Bush remained buttoned up and stayed on the margins – sometimes, according to journalist Steven V. Roberts, edging ‘awkwardly into the picture’.

George H. W. Bush – The marginal man

Speaking to the press later that day in Washington, the vice president stuck to this non-committal tone: ‘I made clear to the general secretary that I certainly wanted to continue the progress that’s been made in the Reagan administration with the Soviets, and I also made clear that we needed some time, and he understood that.’[32]

*

George H. W. Bush was inaugurated on 20 January 1989 as forty-first president of the United States. He was the first serving vice president to be elected to the White House since Martin Van Buren in 1836. To many, in fact, George Bush had always seemed in the anteroom of history, doing useful jobs but on the edge of greatness: ambassador to the United Nations, US envoy to China and head of the CIA in the 1970s. And when he finally stuck out his neck in 1980, by running for the Republican nomination to the presidency, Bush had been outclassed by the telegenic Reagan – a product of Hollywood – whose financial policies Bush denigrated as ‘voodoo economics’.[33]

Reagan initially hoped to enlist former president Gerald Ford as his running mate, but after negotiations broke down less than twenty-four hours before the ticket was to be announced, he offered the position to Bush who, despite the bruising campaign for the nomination, immediately accepted. He was a loyalist and team player. His diary entries included comments such as ‘I am not going to be building my own constituency or doing things like background conferences to show that I am doing a good job’, and also ‘the president must know that he can have the vice president for him and he must not think that he has to look over his shoulder’.[34]

In Reagan’s second term, when Bush started to plan his own campaign, such loyalty was sometimes held against him – as evidence of his perpetual readiness to play second fiddle.[35] And when pressed to articulate his own agenda, he reportedly exclaimed ‘Oh, the vision thing!’ – a phrase often cited against him.[36] Did Bush have the backbone and self-confidence to take that final big step into the Oval Office?[37] He also lacked Reagan’s carefully crafted homespun eloquence and, although his speech accepting the Republican nomination in July 1988 won praise, it also contained the pledge ‘Read my lips: no new taxes.’ Bush slipped this in to appease the Republican right, to whom he looked unacceptably centrist compared with Reagan. In due course those words would come back to haunt him, but at the time they typified the thrust of his bid for the presidency, which concentrated on economic and social issues, rather than foreign affairs.[38] During a highly personalised, at times truly ugly, campaign the Republicans lambasted their Democratic opponent Michael Dukakis, former governor of Massachusetts, as an effete Harvard liberal who was weak on crime and profligate on spending. On 8 November 1988, number two finally became number one, chalking up a landslide victory by winning forty of the fifty states and 80% of the electoral college vote.[39]

Many people assumed that Bush would largely continue the policies of the outgoing administration, both at home and abroad, but the new president was determined not to be the stand-in for a Reagan third term. In fact the two men had never been particularly close and Bush privately held Reagan in fairly low esteem, as someone who was ‘kind of foolish and simplistic on many issues’. So the handover was really a ‘takeover’, albeit friendly. And, contrary to impressions during the campaign, foreign policy would not take a back seat. What’s more, in diplomacy Bush had a different style and agenda from his predecessor. It was here that the ‘real’ George Bush would step out of Reagan’s shadow.[40]

This fresh approach to foreign affairs was mapped out during the interregnum from November to January. Bush’s two key advisers were James A. Baker III, the new Secretary of State, and Brent Scowcroft, who became national security adviser. Their close relations with the president created a kind of constructive tension, as they acted out different roles in Bush’s diplomacy. Both men agreed that Washington had a strong hand to play in dealing with the Kremlin, but they differed significantly on how to use it.[41]

Baker was a long-time Texan sidekick (born in Houston in 1930, he was six years younger than Bush). The two had been close friends for over thirty years: Baker was almost like a younger brother. He had been a US Marine in his youth, then a successful attorney, before becoming a Washington insider. He went on to organise the election campaigns of Gerald Ford in 1976 and Ronald Reagan in 1984, and served right through Reagan’s two terms as White House chief of staff and then Treasury Secretary. In the view of Dennis Ross, a Washington veteran who was appointed director of the State Department policy planning staff, Baker was a superb instinctive negotiator, with a natural flair for dealing with people and a rare talent for identifying priorities. As regards the Soviet Union, Baker favoured continued and intensive diplomatic engagement. He wanted to test Gorbachev’s sincerity and encourage the Soviet leader into further reforms at home and abroad.[42]

Scowcroft served as the focus for a second group of advisers who were much more sceptical of Gorbachev and his plans, fearing that they might be intended to revitalise Soviet power. Moscow, Scowcroft warned, might ‘smother the West with kindness’ and thus weaken NATO’s resolve and cohesion. For this reason he firmly opposed an early summit meeting between Bush and Gorbachev in 1989, lest it would simply feed into Soviet propaganda. As he reflected later: unless there were substantive accomplishments, such as in arms control, the Soviets would be able to capitalise on the one outcome left – the good feelings generated by the meeting. They would use the resulting euphoria to undermine Western resolve, and a sense of complacency would encourage some to believe the United States could relax its vigilance. The Soviets in general and Gorbachev in particular were masters at creating these enervatingly cosy atmospheres. Gorbachev’s UN speech had established, largely with rhetorical flourish, a mood of heady optimism. He could exploit an early meeting with a new president as evidence to declare the Cold War over without providing substantive actions from a ‘new’ Soviet Union.[43]

Scowcroft and Bush were almost the same age: they had both been airmen but Bush’s service was confined to the Pacific War whereas Scowcroft was a career officer in the post-war US Air Force from 1947 until he joined the Nixon White House in 1972, before becoming Ford’s national security adviser (1975–7). It was during the Ford years that he became closely acquainted with Bush, who was US envoy to China and then director of the CIA. They shared the same world view, one defined by the Second World War, the Cold War and Vietnam. Both believed in US leadership in the world, the centrality of the transatlantic alliance, and the necessity of using force decisively if and when it had to be employed. And both believed in the efficacy of personal diplomacy and the paramount importance of good intelligence. Bush trusted Scowcroft completely. He called him ‘the closest friend in all things’ – on the golf course as much as in the Oval Office.[44] Scowcroft saw his role as the president’s personal adviser and also an honest broker, being free – unlike Baker – from having to represent the interests of a particular government department. And as national security adviser, he was also the nodal point of Bush’s security and foreign policy. Now in the post for a second time, Scowcroft developed his own ‘system’, a highly effective decision-making process. Its hallmarks were regular consultation among the NSC staff, and ruthless discouragement of leaks, with everything channelled through Scowcroft to the president. But, unlike the NSC under Henry Kissinger or Zbigniew Brzezinski in the 1970s, the atmosphere was essentially collegial rather than conspiratorial. And Scowcroft and Baker, despite their inevitable frictions, managed to work productively together.[45]

Taken as a whole, therefore, the Bush administration possessed great expertise in foreign policy, and the president himself cared deeply about these issues. He enjoyed reading briefing papers and memos and, unlike his three immediate predecessors – Ford, Carter and Reagan – brought to the job extensive experience in international affairs. In addition to the posts he held in the 1970s, he had served eight years as vice president, during which he got to know many foreign officials and most heads of government. In terms of personality, Bush was unassuming and cautious but also highly ambitious and self-assured. Though he may not have been a strategic visionary, his statecraft was guided by a clear set of basic convictions and goals. A stable world order needed leadership and, in spite of much pessimism in the 1980s, Bush had no doubt that the United States alone could provide it; he did not see America as being in ‘decline’.

To be sure, in some American circles the narrative of ‘decline’ combined with gloomy talk about a dawning ‘Pacific century’ (with Japan in the vanguard due to its prodigious economic growth) and a potential ‘Fortress Europe’ (an ever more closely economically and politically integrated and protectionist European Community). But the Bush White House focused on what it perceived as the rising popularity and spread of America’s liberal values across the world and on pushing for the creation of a new, truly global trading system (led by the United States) – one that would replace the dying 1947 GATT agreement and include the Soviet Union, China and the Third World.

Bush was confident that the US was actually entering a new era of ascendancy; the twenty-first century would be America’s. The United States, Bush declared expansively in November 1988, just before his election, had ‘set in motion the major changes under way in the world today – the growth of democracy, the spread of free enterprise, the creation of a world market in goods and ideas. For the foreseeable future, no other nation, or group of nations, will step forward to assume leadership.’[46]

These themes of global change and American opportunity were developed more fully in his inaugural address on 20 January, looking out from the West Front of the Capitol across the Mall to the Lincoln Memorial. After the customary invocations of the deity and American history, Bush positioned himself on the cusp of a new era, as yet ill-defined. ‘There are times when the future seems thick as a fog; you sit and wait, hoping the mists will lift and reveal the right path. But this is a time when the future seems a door you can walk right through into a room called tomorrow.’ And Bush was ready to do so. ‘We live in a peaceful, prosperous time, but we can make it better. For a new breeze is blowing, and a world refreshed by freedom seems reborn. For in man’s heart, if not in fact, the day of the dictator is over.’ The new president made no direct reference to the amazing transformations under way in the Soviet bloc and in communist China, but no one could have been in any doubt of what he meant. ‘The totalitarian era is passing, its old ideas blown away like leaves from an ancient, lifeless tree … Great nations of the world are moving toward democracy through the door to freedom.’ And America was the gatekeeper. ‘We know what works: freedom works. We know what’s right: freedom is right.’ The president set out the country’s mission: ‘America is never wholly herself unless she is engaged in high moral principle. We as a people have such a purpose today. It is to make kinder the face of the Nation and gentler the face of the world. My friends, we have work to do.’[47] This was America’s moment and he wanted to seize it.

But where should the work begin? One might have expected that Bush would have opened the door towards Moscow: after Gorbachev’s watershed speech at the UN and with the political transformation under way in Poland and Hungary, much of the world was fixated on the changes in the Soviet Union and the ferment in Eastern Europe. Yet, guided by the scepticism of Scowcroft and also keen to break from Reagan’s cosy relations with Gorbachev, Bush’s presidency began with a deliberate ‘pause’ in superpower diplomacy.[48] With few active agenda items left by the Reagan White House – START I being the notable exception – Bush decided to order a set of studies ‘re-examining existing policy and goals by region, with reviews of arms control as well’. Working out how to deal with Moscow was ‘obviously our first priority’, Scowcroft would later recall, but the reports would take a while to produce. Indeed, the NSC review on the Soviet Union (NSR 3) did not land on the president’s desk until 14 March, the reviews on Eastern (NSR 4) and Western Europe (NSR 5, focused on closer union by 1992) two weeks after that.[49]

Meanwhile, Bush had not only opened the China door but strode right through it. On 25–6 February he met with the Communist Party in Beijing. It was the first time in American history that a new US president had travelled to Asia before going to Europe.[50]

*

Bush, who considered himself an expert on China, was keen to bring Beijing into a ‘Trans-Pacific Partnership’. ‘The importance of China is very clear to me,’ Bush told Brzezinski two weeks after his election. ‘I’d love to return to China before Deng leaves office entirely. I feel I have a special relationship there.’[51] Deng Xiaoping was the mastermind of China’s policies of ‘reform and opening up’ – the drive after Mao Zedong’s death in 1976 to abandon the autarkic planned economy and cautiously enter the global market. By 1989 the diminutive Deng was eighty-four and Bush was anxious to exploit their unusually long-standing personal relationship, which dated back to Bush’s quasi-ambassadorship to China in 1974–5. For Bush, China meant Deng. The president’s fascination with China had less to do with the country per se (its language, landscape or culture) than with its social and economic potential that Deng was in the process of unleashing into the global capitalist economy. Conversely, the Chinese referred to Bush as a lao pengyou – their term for a really trusted ‘old friend’ who is committed to building positive relations and acting as interlocutor between the People’s Republic of China (PRC) and the wider world but who also enjoys a special confidence that permits plain speaking. Those Americans before Bush who had earned such a distinction included Nixon and Kissinger; but neither Carter nor Reagan were considered a lao pengyou.[52]

China’s new course, promoted by Deng from 1978, was one of the transitional moments of the twentieth century. Under his leadership Beijing promoted rapid modernisation through greater engagement in an increasingly interdependent world, particularly with technologically advanced Western Europe and America. Domestically, measures were introduced to make policy more responsive to economic incentives. These included the decollectivisation of agriculture, allowing farmers to make profits; rewards for especially efficient industrial performance; and the promotion of small-scale private business. With an eye on both the global economy and the international power balance, Deng gradually relaxed controls on foreign investment and trade and sought membership of global financial institutions. His stated aim was to accomplish before the end of the century a total socio-economic transformation of his country, which in the 1980s ranked among the poorest third of states in the world. By the time Bush was elected president Deng’s gamble was already paying off. In just over one decade of reform, China’s GDP more than doubled from $150 billion in 1978 to over $310 billion in 1988.[53]

The world’s most populous country was in the throes of an economic revolution which, unlike Soviet Russia under Gorbachev, was very tightly managed by the Chinese Communist Party (CCP) and which also advanced step by step. Not only did Gorbachev’s economic liberalisation begin much later, in 1985 rather 1978, but the concomitant political reforms, which gradually dismantled the Soviet Communist Party’s monopoly on power, amounted to nothing less than a new system of governance. This process in turn stirred up destructive ethnic conflicts in what was a much less homogeneous society than China’s. Whereas in the PRC the process of economic reform was controlled from above, in the USSR perestroika combined with glasnost would eventually undermine the Soviet state.[54]

In the course of this Chinese revolution, the United States played a major role. Although Deng was initially keen to engage with Western Europe, America represented his ultimate model, especially after his eye-opening visit in early 1979 to mark the opening of full diplomatic relations: ‘what he saw in the United States was what he wanted for China in the future’. During a week’s whirlwind tour from Washington DC to Seattle, America’s factories and farms simply ‘bowled him over’. So impressive was US technology and productivity that, by his own admission, Deng could not sleep for several weeks.[55]

The Carter administration was keen for Deng’s reforms to succeed; it also wanted to pull China closer to the USA at a time when détente was eroding and the relationship with Moscow had slipped into a deep freeze amid the ‘New Cold War’. Not only did Carter normalise diplomatic relations with China but he granted ‘most favoured nation’ (MFN) status twelve months later – a crucial precondition for expanded bilateral trade. The PRC joined the World Bank in April 1980, the same month that it took over from Taiwan China’s place on the IMF. Accelerating the momentum, in September 1980 the Carter administration concluded four commercial agreements: on aviation, shipping, textiles and expanded consular representation. Announcing these, Carter called the Sino-American relationship ‘a new and vital force for peace and stability in the international scene’ which held ‘a promise of ever-increasing benefits in trade and other exchanges’ for both countries.[56]

Reagan took up Carter’s policy and pursued it with even greater vigour. One of the priorities of his new ‘global strategy’ was the integration of the Pacific Rim into the world economy. Within that enlarged market, China was potentially the biggest player, so its successful opening up would offer exceptional opportunities for US trade and investment. There was also a strategic dimension. The drive for economic modernisation would align China with the capitalist order and make it a more robust bulwark against the Soviet Union. In this vein, the Reagan administration offered Deng in 1981 a ‘strategic association’ with the USA – effectively a de facto alliance. So at a time when Cold War tensions ratcheted up, Sino-American security cooperation expanded. Beijing got US weapons technology, while coordinating with the American anti-communist campaigns in Afghanistan, Angola and Cambodia.[57] Although Reagan himself visited China in 1984, he was happy to make as much use as possible of his vice president’s old-friend status with the Chinese. Bush paid two week-long visits to Beijing in May 1982 and October 1985. On the second occasion he was particularly bullish about Sino-American trade: ‘The sky’s the limit, the door’s wide open,’ he told a news conference, adding that he found ‘much more openness’ now than three years before. Of course, continued progress depended on the Paramount Leader, now eighty-one. Observers were keenly aware that, in the interval between Bush’s first and second trips to China, three gerontocrats had passed from the scene in the Kremlin. But Bush cheerfully told the press of Deng’s words to him: ‘The vital organs of my body are functioning very well.’[58]

The evolving Sino-American relationship was proving a win-win situation. In 1983, the Reagan administration had taken the crucial step of liberalising Cold War controls on trade, technology and investment, allowing the private sector to engage with China at minimal cost to the American taxpayer. Deng, for his part, was desperate to tap every kind of American know-how. Between 1982 and 1984 export licences doubled and sales of high-tech goods such as computers, semiconductors, hydro-turbines and equipment for the petrochemical industry rose sevenfold from $144 million in 1982 to $1 billion in 1986.[59] Out of this grew American joint ventures with China, in areas such as energy exploration, transport and electronics. Consumer goods were another important sector for collaboration, with Coke and Pepsi, Heinz, AT&T, Bell South, American Express and Eastman Kodak among the high-profile US corporations represented.[60] In all these ways the US government acted as low-cost facilitator and gatekeeper for American private enterprise, using natural market forces to try to draw China out of its old shell during the course of the 1980s. In a dozen years of reform. Beijing and Washington became significant trading partners: US–China bilateral trade grew from $374 million in 1977 to nearly $18 billion in 1989.[61]