Bacevich Explains U.S. Political Economy Post WWII

Bacevich_review_04142016Andrew J. Bacevich. 2008.  The Limits of Power:  The End of American Exceptionalism. New York: Metropolitan Books.

Review by Stephen W. Hiemstra

Political economy—the nexus between policy, philosophy, history, and economics—is never more important than in transition periods when the old rules no longer apply and the new rules have yet to be crafted. Yet, those who practice this craft are often castigated both by the old guard resisting change (and rewarding those that aid their resistance) and by specialists defending their professional turf (and under-appreciating the irrelevance of the division of labor in a period of fundamental change). Faced with such changes, it is refreshing to read an author, such as Andrew Bacevich, who is up to challenges posed.


In his book, The Limits to Power, Bacevich frames the current dilemma as a political economic problem, writing:

“The United States today finds itself threatened by three interlocking crises: The first of these crises is economic and cultural, the second political, and the third military. All three share this characteristic: they are of our own making.” (6).

Framing this crisis as internal, Bacevich is swimming against the tide—our problem is not, as widely perceived, a problem created by Osama Bin Laden on September 11 or by OPEC in 1973. Looking into the heart of America, Bacevich sees “our pursuit of life, liberty, and happiness” run amok in the face of limits that we refuse to accept and that now erode national power, as our principles, our heritage, our resources, our middle class, our allies, and our military preparedness have been thrown under the bus by leaders attempting to forestall the day of reckoning (9).  Because Bacevich sees this reckoning composed of three related crisis, let me examine each in turn.

The Economic and Cultural Crisis

In discussing the crisis of “profligacy”, Bacevich sees the Jefferson trinity of “life, liberty, and the pursuit of happiness” having been reduced in the current age to one word: “more”. He  writes:

“For the majority of contemporary Americans, the essence of life, liberty, and the pursuit of happiness centers on a relentless personal quest to acquire, to consume, to indulge, and to shed whatever constraints might interfere with those endeavors.” (16)

More, More, More

This is not a new endeavor; Alexis de Tocqueville noted in the 1830s that Americans possessed a “feverish ardor” to accumulate (17). More recently, this ardor was observed by Reinhold Niebuhr as being manifested in a tendency to “seek a solution to practically every problem of life in quantitative terms” assuming that “more is better” (23). Buttressed by Charles Maier’s America’s “empire of production” after World War II (WWII), America’s “empire of consumption” continued to provide “more” until reaching a tipping point in the period between 1965 and 1971, as Bacevich observes:

“The costs of the Vietnam War—and President Johnson’s attempt to conceal them while pursuing his vision of the Great Society—destabilizing the economy, as evidenced by deficits, inflation, and a weakening dollar. In August 1971, Nixon tacitly acknowledged the disarray into which the economy had fallen by devaluing the dollar and suspending its convertibility into gold.” (29)

Malaise is Real

Bacevich sees this deepening economic crisis coming to a head a decade later in Jimmy Carter’s famous “malaise speech” (July 15, 1979) where he spelled out that a sustainable future required living within our means (31-36). Carter’s analysis was soundly rejected by the American people who overwhelmingly elected Ronald Reagan based on two related ideas: “credit has no limits and the bills will never come due” (36). Modeled on the unlimited federal deficits, personal savings which average 8-10 percent of disposable income for most of the postwar period, fell to practically zero in 1985 (44).

The economic consequences of the Reagan deficits were reversed during the Clinton years only to be reinstated during George W. Bush’s presidency when the debt accumulated effectively reduced the federal government from a prime to a sub-prime borrower, using debt-to-income standards applied normally to individuals. Of course, debt issues have their implications for politics.

The Political Crisis

Bacevich observes that “American democracy in our time has suffered notable decade”, a decade that has its roots in the response to WWII and to the Cold War and that had the effect of concentrating significant power in the executive branch of government (67-68). While the government’s response to September 11 is often cited in development of an ideology of national security, Bacevich sees the George W. Bush’s contribution being primarily in articulating existing convictions. Bush’s second inaugural address cited 4 convictions:

  1. “History’s abiding theme is freedom, to which all humanity aspires…”
  2. “America has always been, and remains, freedom’s chief exemplar and advocate…”
  3. “Providence summons America to ensure freedom’s ultimate triumph…”
  4. “…for the American way of life to endure, freedom must prevail everywhere.” (74-75)

The idea that American can and should intervene in defend of freedom elsewhere in the world, Bacevich notes, “imposes no specific obligations” and serves primarily “to legitimate the exercise of executive power” (77). So legitimatized, military intervention has become the preferred political instrument in a world with only one super-power and for a people whose desire for “more” seems insatiable. This ideology accordingly serves as a reasonable explanation for why the end of the Cold War did not result in the much promised peace dividend and war, not peace, has become the norm (1), thanks, in part, to the Bush doctrine of “anticipatory self-defense” (117) which justified preventive wars, like the Iraq war to unseat Saddam Hussein.

The Military Crisis

Citing Corelli Barnett, Bacevich described war as the “great auditor of institutions” and observes:

“Valor does not offer the measure of an army’s greatness, nor does fortitude, nor durability, nor technological sophistication. A great is one that accomplishes its assigned mission. Since George W. Bush inaugurated his global war on terror, the armed forces of the United States have failed to meet that standard.” (124)

Bacevich explains this failure in great detail, but the short answer is that the use of military needs to be undertaken in the context of political objectives and, when the politicians—including military politicians, become fascinated with the technologies of war, the political context frequently is ignored—tactics displace strategy leaving only a muddle. Having reviewed the muddle, Bacevich concludes:

“America doesn’t need a bigger army. It needs a smaller—that is, more modest—foreign policy, one that assigns soldiers missions that are consistent with their capabilities.” (169)

Bacevich’s Background

Andrew Bacevich is a retired U.S. Army colonel who taught history and international relationship at Boston University. He is a graduate of West Point with both master’s and doctor of philosophy degrees from Princeton University. He is the author of numerous books.[1]


Andrew Bacevich’s book, The Limits of Power, ties together many aspects of U.S. history and, for me as an economist with 27 years of service in 5 different federal agencies, adequately explains much of the recent dysfunction (lack of sustainability) of the federal government. For readers who are neither political junkies nor Washington insiders, this may be a challenging book to read and understand because Bacevich challenges many of the assumptions normally taught in high school civics classes. In any case, it is a book well worth reading.



Bacevich Explains U.S. Political Economy Post WWII

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