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In this issue:Katherine BooGlen Bowersock

Robert KimmittMelvin LaskyVali NasrAlex RossAmity ShlaesMichael Taussig

Geoffrey Wolff

The Berlin Journal A Magazine from the American Academy in Berlin | Number Fourteen | Spring


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Number Fourteen | Spring 2007

Contents Number Fourteen | Spring 2007The Berlin Journal

When Scholars Examine Political Ideas

4 Glen Bowersock counters Huntingtonsthesis by tracking the footprints of the

Roman Empire across distant religions andcultures.

10 Vali Nasr offers a nuanced reframing of theongoing conict in the Middle East. On thecauses and implications of sectarian strife.

New German Leadership

14 Robert Kimmitt and Matthias Wissmannprobe the chancellors initiative tostrengthen economic openness across theAtlantic.

Historical Revisions

16 Amity Shlaes challenges regnantinterpretations of the New Deal andsuggests the present-day relevance ofher oppositional narrative. With little-known images from the Great Depressionby graphic artist and muralist Benjamin Shahn.

22 Melvin Lasky chronicles the picaresqueexperiences of an intellectually irreverentcombat historian. An excerpt from hisunpublished World War II diary from

the European front, accompanied byphotographs by Robert Capa.

30 Alex Ross depicts the American attemptto reshape the musical spirit of postwarGermany, while the artwork of Tacita Dean hints at attempts to deny a shameful past.

Academy News

37 Notebook of the Academy: The Academyannounces two new fellowships; a regularseminar in Baden-Wrttemberg; additionsto the Board of Trustees; a timeline ofAcademy events; and more news and notesfrom the Hans Arnhold Center.

42 Life and Letters: An introduction to thespring 2007 class of fellows and recentpublications of Academy alumni.

46 On the Waterfront: A sampling from theGerman press, including stories on writerNicole Krauss, actor and director RobertDe Niro, environmental pioneer AmoryLovins, and intellectual property lawyerLawrence Lessig.

The Writers Dilemma

50 Katherine Boo reects on the empiricaland ethical quandaries inherent to writing

about the American poor. Also, portraitsby Robin Bowman of teenage life below thepoverty line.

56 Geoffrey Wolff muses on capturing thesubtleties of the Stasi state from the vantagepoint of the American white middle class.With critical works by the late gd r painterWolfgang Mattheuer on the eightiethanniversary of his birth.

The Currency of Color

62 Michael Taussig swathes colonial exchangein the materials of desire and fear, gaietyand mystery.

65 Donations to the Academy

Special thanks are due to the InternationalCenter of Photography for opening theirarchives and making the Capa and Shahn photographs available. We are also gratefulto Katherine Boo for introducing us to RobinBowman, and to Academy friend Tacita Dean for generously sharing her work.

Palast , Tacita Dean, 2004


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Directors NoteBrushing History against the Grain

All of the contributors to this issue are brushing historyagainst the grain, to cite Walter Benjamin, and challeng-ing the way their crafts are practiced. This is as true of the

unpublished war diaries of Melvin Lasky, whose vivid dis-patches during the nal months of WWII were inevitablyill suited to the prevailing norms of military narrative, as itis of the self-critical reections of the journalist KatherineBoo, whose report from the surrendered front of theAmerican war on poverty eschews both sentimentalismand sensationalism.

Music critic Alex Ross has always deed conventionalideas about the place of classical music within our culture.The account of postwar German musical life from his book

The Rest is Noise transfers these virtues to the lengthiergenre. Columnist and nance expert Amity Shlaes dis-putes the received view of Depression-era policies. Theincluded chapter from her meticulously researched, inde-pendent book brings an important new perspective to theNew Deal.

Both eminent classicist Glen Bowersock and MiddleEast scholar Vali Nasr challenge the dominant concep-tual leitmotifs of current political discourse. ProfessorBowersocks scholarly scrutiny of the notion of the clash

of civilizations demonstrates how both academia and thepolitical sphere are susceptible to this fashionable idea.Anthropologist Michael Taussig, for his part, eschewsexplanation of methodology while rening Benjaminsambition to compose material history.

Benjamin once wrote that a stay in Moscow broughthim clarity about the lineaments of living in Berlin. Hewas expressing a sentiment that resonates in the work ofthe many scholars, writers, and artists who come to theHans Arnhold Center. Geoffrey Wolffs interviews about

the Stasi with Berliners from both sides of the Wall atonce magnify his uncertainties about writing in a foreignculture and make him more sure-footed as he creates thecharacters of his next novel. The pieces by each of ourcontributors and, indeed, the work of this springs entireclass of fellows are enhanced by their openness to otherelds. This forties the independence of their thinkingand the vitality of exchange, both within the AcademysHans Arnhold Center and beyond.

Gary Smith

The Berlin Journal

A Magazine from the Hans Arnhold Center

published twice a year by the American

Academy in Berlin

Number Fourteen Spring 2007

Publisher Gary Smith

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Cover: Julie Mehretu, detail ofRetopistics:

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ink and acrylic on canvas). Image courtesy

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Mundheim Fellow in spring 2007.

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H U G O B O S S A G

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In 1993 Samuel P. Huntington published

an article in the journal Foreign Affairswith the

apocalyptic title The Clash of Civilizations?

This title was presented as a query since it was fol-

lowed by a question mark, but a few years later the

same author published a whole book entitled, without

any query, The Clash of Civilizations and the Remaking

of World Order.Huntingtons language and views

sparked a debate that has continued for more than a

decade. It has become such an integral part of historical

thinking that a new book by Martin Goodman bears

the challenging title Rome and Jerusalem The Clashof Civilizations.This title is all the more remarkable

since Goodman nowhere in his book mentions the

Huntington thesis. It seems simply to have become

common currency in historical analysis.

It is hardly necessary to say that, even in Huntingtonianterms, Rome and Jerusalem were no more clashing civi liza-tions than Athens and Jerusalem. Two thousand years ago

Tertul lian, the eloquent father of the Christian church, hadportentously asked, What has Athens to do with Jerusalem?His own answer was nothing. He was wrong, of course,but the point he wanted to deny was inuence, not conict.A Huntingtonian might argue that Rome and Persia hadbeen ancient civilizations that clashed, but in fact Jerusalem,Athens, and Rome all inhabited the same world and sharedits cultural diversity. A Jew, a Greek, and a Roman could allwatch the gladiators together, all applaud the pantomimes,all appreciate a well crafted mosaic image of the sun (Helios),and all savor a learned disputation, be it philosophical, rhe -torical, or theological. It was one civil ization, and there waslittle room for clashing.

The Roman Empireand the Clash of Civilizationsby Glen Bowersock

Fresco of Dionysus and Ariadne riding in an ox-drawnchariot, accompanied by Seilenos and a pair of nymphs,Pompeii, imperial Roman period


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I nd the Huntington thesis completelyuntenable, yet it seems to be everywhere,both in contemporary political analysis andnow, as with Goodman, even in the writ-ing of ancient history. I present it here inthe context of the Roman Empire, both toclear away the confusion and imprecisionthat seem to me to lie at its core and to setforth a view of the empire that may offersome hope in the face of Huntingtons pes-simism. I want to suggest that the religionsof classical antiquity may in modern per-spective paradoxically provide one of thebest explanations for why civilizations didnot clash over a period of more than onethousand years, from the Homeric age tothe establishment of the Abbasid cal iphatein Damascus.

The fundamental problem withHuntingtons analysis is his inability todistinguish civilization from culture; heconstantly denes one in terms of the other.

Civilizations are the broadest cultural enti -ties; hence conicts between groups fromdifferent civilizat ions become central toglobal politics. Or, Civilizations are cul-tural, not political entities. As Jack Matlock,an astute analyst of the collapse of the SovietUnion, observed in commenting on theHuntington thesis, Most might agree that a civilization is a cultural entity, butthey would disagree about what constitutesa cultural entity, which is, after all, themore fundamental question. For somethinkers, the state itself was an integral partof culture. Jacob Burckhardt developed hisinterpretation of ancient Greek cultural his-tory on precisely this premise, and it hadalready been an important part of his analy-sis of the culture of the Italian Renaissance.Neither Burckhardt nor others who reectedon this subject were so foolish as to thinkthat the conict of states was a clash of civi-lizations.

Even more problematic in dening cul-ture is the role of the environment, in thesense in which Fernand Braudel has accus-

tomed us to look at the Mediterranean asa single culture. The physical landscapeand its relation to commerce and economicgrowth are no less essential to a culturethan the spiritual and artistic values thatrst come to mind. Even Huntingtonacknowledges that civil izations have noclear-cut boundaries and that cultures

interact and overlap, yet he believes themto be meaningful entities without everasking, Meaningful to whom? The dangerof solipsistic assessments makes a generalagreement difcult and a clash inconceiv-

able. Huntington claims that civilizationsare as mortal as the human beings whopopulate and promote them, but even thisis open to dispute. The cultural values of asystem can easily survive its demise or betransmuted into another system. ImmanuelWallerstein put it well when he wrote,

Civilizations have not risen and fa llen.Rather, world-empires have come into exis-tence, ourished, and declined.

Wallersteins observation touches on thefamous Gibbonian problem of decline andfall. Although Edward Gibbon thought thathe was chronicling the decline and fall of

the Roman Empire, what he actually wroteabout was the culture of the Roman Empire.Accordingly, contrary to his expectations, hefound himself swept up in a narrative thatembraced China and Islam and only cameto a rather open ending in 1453 with thecapture of Constantinople by the Ottomans.When did the Roman Empire end? No oneknows, least of all the reader of Gibbon.When did the culture of the Roman worldend? Arguably never. It permeates Europeand the Americas today. Did one civiliza -tion the Roman one clash with another?Hardly. The clash of the Byzantines andthe Muslims in the rst decades of Islamwas not a clash of civilizations because bothsides at that time shared the same civiliza-tion. It was, in fact, the late phase of theRoman Empire when Rome took on a newconceptual life at Constantinople on theBosporus, a new (or second) Rome.

Huntingtons thesis doubtless appealedto Goodman, not to mention many others,

for two reasons. The rst is its explicit rec-ognition of modern globalization, achievedthrough miracles of technology and com-munication, and the second is its confron-tation with alien cultures. Huntingtonsupposed that we are in a new world orderin which distant and alien cultures canorganize themselves into present and coher-ent threats. But neither globalization norstrangeness is anything new in humanhistory, even if the scale has been differentin the past. Americans and Europeans arebrought up on a nourishing diet of so-called

Western Civi lization. Western Civilizationwas a messy amalgam of Jewish, Greek, andRoman culture as ltered through a tri-umphant Christianity. In universities andchurches the Judaeo-Christian tradit ionwas expounded in terms of awe and grat i-tude, equally combined.

It has been the dismantl ing of the idea ofWestern Civil ization that has provoked thekind of panic and confusion that Huntingtonrepresents. A global perspect ive and increas-ing familiarity with alien cultures have shat-tered the security and monolithic stability ofWestern Civil ization. But this does not meanthat the civilizat ion, with all its achieve-ments and glories, has disappeared. It hasnot clashed as such with any other civiliza-tion. Its culture remains intact, but it appearsnow, even in Western opinion, to be neitherunique nor manifestly superior to othercivilizations. Of course thinkers in Easterncountries knew that long ago. Even Gibbon

knew that as he worked his way through hischapters on Islam and China.

There is invariably a religiouscomponent to Huntingtons idea ofcivilization; though he chose notto speak of a clash of religions, he

clearly implied it by setting up a competi-tion with Islam. Taking this stance wouldhave been even more indefensible than aclash of civilizations, as it is religion thatcan illustrate why civilizations do not clashwhen states and empires do. The RomanEmpire is an ideal laboratory for observingthis since its tradition of polytheistic wor-ship spans the entire course of its history.Polytheism existed in the form of both statecult and private cult, ethnic cult and localcult. This rich skein of religious diversitycharacterized the pre-Islamic Arabs, witha pantheon of 365 different deities, just asmuch as it did the Greeks and the Romans.Superimposed upon this polytheisticquilt were the monotheistic religions: rstJudaism, later Christianity, and nally

Islam. Religion proved not to be conned toone civilization or another. Although therewere antagonisms and persecutions alongthe way, it proved to be a far more effectivecarrier of alien ideas and culture than any-thing else. It could pass from Jerusalem toRome, from Naples to Athens, from Syriato Libya. The frontiers of civilizations werealways porous, but the cultures they repre-sented usually moved beyond them throughtheir indigenous divinities.

Consider Dionysus, one of the most pop-ular Greek gods throughout antiquity. He

Huntington supposed thatwe are in a new world order,but neither globalization norstrangeness is anything newin human history.


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was the god of the grape, wine, intoxication,ecstasy, and frenzy. He could be depictedin a bewildering variety of mortal guises,including an old man on a stick (with vineleaves), a lissome youth (with vine leaves),an adolescent, or an adult of heroic propor-tions consorting with panthers. Just as winewas a common denominator for human-kind, so too was Dionysus. The legends thatbuilt up around him took him all the way toIndia and doubtless Afghanistan. His cultsprang up in new and interesting formsall over the Mediterranean, particularly inGreek-speaking Naples in Italy. He couldbe identied with the Roman Bacchus,and his travels took him through the NearEast, where he is said to have visited Beirutand given his name to the Syrian city ofDionysias. He was, quite simply, every-where. When Christianity took hold in lateantiquity, Dionysus continued his interna-tional triumph to such an extent that he and

the young Christ proved indistinguishablein some images, and in one famous pagantext he was explicitly identied as Christ.Euripides tragedy about the worshippersof Dionysus, the Bacchae, was startlinglyrewritten by a Christian poet as an accountof the suffering Christ, Christus patiens.

The chariot of Dionysus was a vehicle thatcrossed every frontier, both political andcultural.

An even more exotic and specializedexample from the Roman Empire is theHighest God, or hypsistos theos.The headof the Greek pantheon, Zeus, was there-fore the Highest God, and so he appears inclassical texts. As cultures intermingledthrough conquest and empire, however,the Highest God acquired a multiplicityof references. The Greek translators of theOld Testament, what scholars know as theSeptuagint, chose to render the Hebrew

name for God, Yahweh, by this expressionand instantly created a link between theHellenes of the classical age and the Jews

of the Torah. Meanwhile, throughout theRoman Empire, the expression HighestGod served to designate the rankingdeity in many cities and towns across theMediterranean. The abundance of inscrip-tions with this unnamed god has even ledsome to speculate that all the texts must

refer to Jews or gentiles espousing Judaism,but this is c learly not the case. Many textsare pagan in character, and by the fourthcentury ad the Highest God lent hisname to some exotic Christ ian heresies inPhoenicia and Cappadocia that attempted tocombine Christian and Jewish rituals intoa single religion. The Highest God traveledfreely from Palestine to Phoenicia, fromCappadocia to the Taman Peninsula, f romThrace to Athens and to Italy, crossing aplethora of civilizations, large and small,local and international. The worshippersacross these spaces preserved their own

individuality and, at the same time, showedtheir adherence to a larger internationalworld. They symbolized globalization and

regionalization at the same time.Mithras is another example of a mobile

international deity, a strange gure with apeaked cap whose cult image depicts himin the throes of slitt ing the throat of a rear-ing bull. Devotees of his cult customarilydescended into a pit above which a bul l

Religion in the Roman Empire proved to be a far more effectivecarrier of alien ideas and culture than anything else.

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was sacriced so that the blood would drainover them. This cult, found all over theRoman Empire, was particularly associatedwith the Roman army and seems, with itselaborate register of initiation categories, tohave functioned as a kind of f reemasonryor Shriners for middle-class Greeks andRomans. The bloody character of the riteand the divine image itself have long sug-gested a Phrygian origin in Anatolia, eventhough the bulk of documentation comesfrom the West. Yet only a few years ago anastonishing Mithraeum, a temple to thedeity, was uncovered at Huarte in Syria, notfar from Apamea. It is conspicuously laterthan most other examples, dating from themid-fourth century. (A Mithraeum at Dura-Europus on the Euphrates, for example,dates from more than one hundred yearsearlier.) Furthermore, the Huarte shrinecontains wall paintings without parallelanywhere in the world. Mithras himself is

depicted with a two-headed black man inchains, and a row of severed, grizzled headson a platform appears to show a ray of sun-light striking each of the heads. The two-headed gure, representative of the dualistexistence of divine forces of good and evi l,signals the practice of Zoroastrianism. The

suggestion of a Zoroastrian connection withMithraism is exciting, utterly new, and yetperfectly consistent with the religious diffu-sion in the ancient world.

Alongside Rome and later Byzantium(the new Rome), Persia was one of theindubitably great civi lizations of theage. It spawned not only Zoroastrianism,which has made its way in modern timesto Toronto, where it ourishes, but alsoManichaeism, perhaps the most inu-ential of the Persian dualist religions.Manichaeism spread widely into the east-ern Mediterranean in late antiquity as well

as into central Asia and China. It showedno respect for frontiers of any kind, andit even infected the great Christian SaintAugustine for a time. The periodic wars of

containment that Rome and subsequentlyByzantium fought against the Persians hadnot the slightest effect in curta iling thespread of religion from the Iranian plateau.When, in the late fourth century, a tribeof Arabs in the Hadramawt in Arabia con-verted to Judaism, the Persians used thispeculiar situat ion to their own advantage.They gave their support to the Jewish king-dom of the Hadramawt in order to opposethe Byzantine support of Christians inEthiopia. Hence the astonishing spectacleof an onslaught of Ethiopian Christiansinto the Arabian peninsula in the earlysixth century, with the encouragement ofthe Byzantine emperor. The Ethiopians,on the other hand, encountered resistancefrom the Arabs, who were converted Jewsenjoying the backing of the Persian shah-in-shah. Never has religion so effect ivelybreached the barriers of civilization andculture as in this extraordinary and little

known story.In the Jordanian desert east of Amman

there is a famous chateau from late antiq-uity that appears to have been a rural retreatfor the Umayyad caliphs in the seventhcentury: Qusayr Amra. Here, after theMuslim conquest of the region, the follow-

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[Sterns] impressive book combines haunted childhood memorieswith learned insights and reflections on German and American history.

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The more personal history in this book adds power toan argument that has been a lifetime in the making.

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A remarkable story made more compelling by Sterns powersof observation and analysis. David Myers, Chicago Tribune

A historically valuable document.Adam Kirsch, The New York Sun

This brilliant and insightful volume of memories and analysesis a treasure to teachers and students of contemporary history.Elie Wiesel, winner of the Nobel Peace Prize and author of Nig ht

This is an important memoir, certain to become a classic.Richard Holbrooke, former U.S. Ambassador to Germany

Dionysus continued hisinternational triumph tosuch an extent that he andthe young Christ provedindistinguishable in someimages.


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The Berlin Journal

ers of Muhammad relaxed in an ambienceof enchanting wall paintings of whollyGreek character. Animals and hunts areshown, as well as elegant human gures,including a woman rising f rom her bathand another holding a baby. Perhaps themost remarkable among the Umayyadpaintings at Qusayr Amra is a solemn showof six kings, who are identied with labelsin both Arabic and Greek. It is tempting toassume that these gures symbolize theUmayyads perspective of the civilizationsof the caliphs world. Identication of twoof the kings did not survive, but the oth-ers are Caesar (the emperor at Byzantium),Khusraw (the Persian shah), Roderic theVisigoth (king of Spain), and the Negus ofEthiopia. Andr Grabar conjectured that thetwo kings for whom the labels are missingare the emperor of China and the khagan ofthe Kazars. Here the wal ls seem to offer a

visualization of the regnant civilizations ofthe age. These civilizations, if that is whatthey are, clearly do not clash. They are mutu-ally respectful of each other.

The Hellenism of late ant iquity, so viv-idly reected at Amra, lived on in theseearly years of Islam and brightened the livesof caliphs and courtiers. During the rstcentury af ter the Muslims conquest, thenew religion of the conquerors did little toalter the Greek way of life normal for resi-dents of the region. These were residentswho had adorned their homes with scenes

from Greek mythology andperhaps enjoyed the the-atrical mimes providinglocal entertainment. Someremained Christian, as thechurches recently excavatedat Umm er-Rasas in Jordaneloquently testi fy. The fusionof Christian and paganculture that the Muslimsfound when they invadedTransjordan was no impedi-ment to the new government.It not only tolerated but alsoexploited it. Religion onceagain was an open frontier.

In the course of time, withthe exigencies of an Arabic-speaking administrationand a growing Muslim pres-ence, the same open frontierallowed Islam to grow and

eventually, but slowly, toovertake the Hellenic tradi-tions it inherited. Curiously,however, this process of

acculturation and adaptation was mutu-ally reinforced by the t wo great religions ofChristianity and Islam. In the eighth cen-tury both undertook a theologically drivencampaign to eliminate the representation ofimages. The Christian iconoclasts deledand removed representations of the holyimage of Christ and the Mother of God, andthe Muslim iconoclasts set out at virtuallythe same time to eliminate representationsof any creature that draws breath. What wesee in the simultaneous iconoclastic move-ment of Byzantium and Islam is a clearproof that religion does not fuel any one civi-lization or culture.

It is salutary to recall that, after theRoman emperor Hadrians suppressionof the revolt of Bar Kokhba in Palestine inthe 130s ad , there was no further outbreakof any consequence in the entire regionuntil the Persians invaded Jerusalem in the

seventh century. There had been a few epi-sodes of Persian aggression, a minor revoltprovoked by an imperial aspirant, t wo out-breaks of internecine strife between Jewsand their brethren, the Samaritans, andsome violence at the hands of maraudingmonks but fundamentally nothing com-parable with the uprising of Bar Kokhba.Think of it: nearly ve centuries of relativepeace in the Near East. Civil izations didnot clash. States did, and religious violencewas fraternal, as it is in Iraq today. Whenthe Persians re-entered the arena of Near

Eastern politics, it was, as in South Arabia,to come to the aid of the Jews against theChristians. But this was c learly a politicaldecision that had little to do with the reli-gious convictions of the Persians. Had theybeen able to foresee the Islamic conqueststhat lay so close in the future they mighthave chosen a d ifferent policy.

Although states entered often into con-ict, civilizations endured in a generouspattern of interaction and metamorphosis.They were precious because they expresseda commonality of outlook and t raditions;and they were open, above all, if para-doxically, to religions. In his paper on theHuntington thesis, Jack Matlock wrote per-ceptively: A civilization by any denition isinnitely more complex than, say, a garden.Nevertheless, describing it is in principleno different. Each garden is unique, yetsome will have common characteristics notshared by others. Some plants will grow

well in some soils and poorly if at all inothers. Some plants may take over if movedto a different environment. Gardens, likecivilizations, can be described, analyzedand interpreted. But one thing is certain. Itwould be absurd to speak of a clash of gar -dens. It is equally absurd to speak of a clashof civi lizations.

Over many centuries religion has beenviewed both as a foundation of civil izationas well as a threat to it. The conservativeright would hold to the former view, andthis is just as true of those in the AmericanBible Belt as it is of the Muslim heirs ofmedieval Islamic fundamentalism. Theradical left incl ines to the other view, andthe Western doctrine of the separation ofchurch and state is a reection of resistanceto ecclesiastical coercion and inquisition.But the vast breadth of the Roman Empiregives us valuable lessons in the mobility andmutability of religion. It illuminates betterthan anything else the evanescent constructof civilization. This is a construct that isuseful to historians precisely because it can-

not explain war and violence. It is the soilin which the loveliest of blossoms and therankest of weeds both can grow.

Glen Bowersock is Professor Emeritusof Ancient History at the Institutefor Advanced Study in Princeton,New Jersey. Author of Mosaics asHistory. The Near East from LateAntiquity to Islam (2006), he joinedthe Academy for a week this March asa Distinguished Visitor. This articleis based on his Berlin lecture.

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Wall hanging withdepiction of Dionysus (detail),Egypt, fourth century


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Confessional Conictand the Rise ofthe Shiites Four Questions for Vali Nasr

0 Number Fourteen | Spring 2007

Muhammad, eighteenth century


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the Western church or the protestant fromthe Catholic. Put simply, the separationwithin Islam was the consequence of a dis-pute over the prophet Muhammads rightfulsuccessor, which led each sect to developa dif ferent approach to law and a dif ferentethos of religion. Although they agree onthe majority of Islams tenets, they differ oncertain aspects of pract ice, and these smalldifferences are much more consequentialthan the similarit ies. Over the ensuing1,400-year period, they have fought overtheology, power, and territory and theyhave coexisted. As a result, the division hascome to dene the identities of both groups.What denes each community? Its beliefsand how it differs from the other, but also anotion of shared history within the sect .

Shared history does not necessarily haveto do with religion. In Northern Ireland, forexample, the struggling groups are denedas Catholic and protestant, but that does

not mean that they are ghting over MartinLuther. The terminology is religious, butthe ght is not about religion. The confes-sional designation implies your background,where you were born, your share of wealth,your share of power, your attitude about theEnglish occupation of Ireland, and your atti-tude toward Irish independence. It is aboutwho you are, not what you believe. That iswhy it is absurd to think that the currentconict would not be happening i f Iraq weresecular.

The identities of the two communitiesclearly come from a religious sense of self-perception. But they are not ghting overreligion, they are ghting over power. Theght in Iraq is not to decide who succeededthe prophet; I do not believe that Sunniswant to convert Shiites or that Shiites wantto convert Sunnis, or that all of those ght-ing are themselves necessarily believers.The ght in Iraq is about who wil l controlthe country, and those involved will use anyinstrument, be it guns or sectarian argu-ments, to change minds.

But this particular conict, this particulardistribution of power, is happening at a timewhen religion itself matters deeply in theMiddle East. The period of Islamic revivaland the fundamentalist Islamism unfoldingthere is part of its consciousness. The con-fessional conict ultimately favors the moreradical elements in each group. As a result,on the Sunni side, power will gravitate tothe Abu Musab al-Zarqawis, the al-Qaedatypes, and the Salas, on the Shia side to theMuqtada al-Sadrs and anti-Sunni voices. It isnot very different from other ethnic conicts

The Berlin Journal

we have seen. This game has star ted becausethere is a political pr ize on the table to bewon that is the true animus but religionwill a lso be radicalized in the process.

2 What role does

confessionaldemography play inmaintaining politicalstability?

Shiites represent at best 10 to 15 percent ofthe some 1.3 billion in the Muslim world

constituting 150 to 160 mil lion people butthe overwhelming number of Shiites over90 percent live between India and Lebanon.In countries like t he Republic of Azerbayjan,

Iran, Bahrain, and Iraq Shiites enjoy amajority, and there are signicant minori-ties of about 20 percent in Afghanistan andPakistan, 10 percent in the United ArabEmirates, 10 to 15 percent in Saudi Arabia,30 percent in Kuwait, and by most esti-mates about 40 percent in Lebanon, whichmakes the Shiites Lebanons single largestcommunity.

Regardless of minority or majority status,the Shiites, from their point of view, have notheld power in equal measure to their num-bers. This perception is causing a bloody con-ict in Iraq; however, this does not necessarilymean that the st ruggle for power would playout similarly elsewhere in the Middle East.There have been peaceful transitions of powerbetween the sects, such as when the newAfghan constitution was put into effect in2001. Partly because of the c lose collaborationbetween Iran and the US, the Shiites wereenfranchised. For the rst time their religionwas accepted as legitimate. According to thenew Afghan constitution a Shiite may even bepresident and that only a few years after the

1997 massacre in which 5,000 Shiites werekilled by the Taliban. With a Shia populationof only 1 percent but four Shia representativesin its cabinet, Oman is another example.

But Iraq is particularly problematic.Acutely aware of the inherent demographicimbalance when drawing the borders of Iraqin 1922, the British forced Kurdish inclusionin the hopes of creating demographic paritybetween Shiites and Sunnis. But after theIraq war in 1991, the US for all practical pur -poses removed the Kurds from Iraq, throwingthe Sunni-Shia balance askew. The per iod

1What signicance doesthe confessional conicthave for understandingthe current turbulencein the Middle East?

When I completed my book The Shia Revivaltwo years ago, I had a tough t ime convincingagents that the Shia-Sunni conict or theShiites new assertion of power was relevant

to Middle East politics or Western interestsin the region. These concepts have sincebecome crucial elements in the vocabularyof policy makers, despite the lack of clearunderstanding about what they mean.

Most Westerners think about Shiites andSunnis in terms of the conict in Iraq. Thesectarian war that is unfolding there is inmany ways a threat, both to Middle Easternand Western interests, but this ri ft is no lon-ger conned to Iraq. The 2006 war betweenLebanon and Israel signaled the momentwhen the Iraq conict essentially wentregional. No sooner had the rst Hezbollahrockets landed in Israel than somethingunprecedented in the history of Arab-Israeliconict took place, namely that a group ofArab voices, and particularly the more radi-cal ones, began to criticize an Arab forcein the midst of a ght with Israel. They didso in a very sectarian way, referring in oneinstance to Hezbollahs name which inArabic means party of God as the partyof Satan. In their view, a heretical organiza-tion like Hezbollah could not legitimately

bear the ag of the Palestinian cause, andthey therefore accused the group of tryingto convert Sunnis from true Islam, a Shiapower play on behalf of Iran. This was themoment in which the oldest violent conictin the Middle East, the Arab-Israeli conict,converged with the newest, the sectarianconict in Iraq.

The Shiites and Sunnis represent theoldest, most important sectarian divisionwithin Islam. All great religions have sec -tarian divides; in terms of Christianity it issimilar to the separation of the Eastern from


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that followed also began very badly when theIraqi army, returning from Kuwait, rebelledout of frustration over a lost war. No matterits origins, it was perceived as a Shia mutinyand thus suppressed brutally by the primarilySunni Iraqi Republican Guard, resulting inan ultimately sectarian phenomenon.

When the US went into Iraq in 2003 notall Iraqis beneted equally. The Sunnisstood to lose many benets with SaddamHusseins deposal, and the Shiites couldonly gain. The Shiites responded in kind,despite their distrust of the US. They did notresist the US invasion and were urged veryearly on by Iraqs most senior Shia spiritualleader to join the political process. AyatollahAli al-Sistani issued a religious ruling, afatwa, that it was the duty of every singleIraqi man to par ticipate in these new elec-tions, the duty of every single Iraqi womanto participate in these new elections, evenif it meant going against her husbands

wishes. Even Irans most senior conserva-tive religious leaders, including the head ofIrans Guardian Counsel, a much-dreadedconservative establishment, issued a simi-lar ruling. The Shiites were sure that theywould benet from any shift of balance inthe Middle East, any kind of political reform,any change in the existing systems.

Initially, Shiites across the Middle Eastalso reacted very positively. Hezbollah rou-tinely echoed Ayatollah Sistanis support ofAmerican elect ions since a vote would getHezbollah and Lebanese Shiites much morethan they had. Only because they couldntsecure power through the elections did theytry to seize it through a putsch against theLebanese government. In many other Gulfcountries, Shiites participated in electionsmuch more wholeheartedly, believing thatany kind of political change might help tipthe scales in Iraq.

Why was this all so important to theShiites? In any part of the world with ethnicconict, being in possession of powermeans appointing your own governors, your

own police, and your own teachers. One ofthe Shiites rst acts after gaining the upperhand in Iraq was to expel Sunnis fromteaching positions. It is this dist ribution ofjobs and wealth that affects the average citi-zen the most. Shiites expected these advan-tages from their new government, but theIraqi government has become infested withcorruption and is ineffective. This fai lureis largely the fault of the Iraqi constitution,which, by mandating a two-thirds majority,requires parties to make enormous conces-sions to coalition partners just to maintain

a government. As a result the ministry ofhealth, for example, gets twenty seats in par-liament and treats it as its efdom. There isno accountability. Consequently many of thevoters expectations have not been fullled,largely because the promise of a t ransfer ofpower, transfer of wealth, and transfer ofresources has yet to be realized.

This lack of condence in the new gov-ernment, along with the ferocity of theSunni insurgency, gradually broke downShia loyalty to the American political pro-cess. The breakpoint came in Samara oneyear ago when a massive bomb destroyedthe most important Shia shrine, an actCatholics might equate with destroyingSt. Peters Cathedral. The response was two-fold. Many Shiites came to believe that theycould not rely on the American military todeal with the insurgency, often noting thatthe Samara shrine was the only one not


protected by Shia militia. It seemed clear tothem that the Americans either did not wantor were not able to deal with the insurgency,and, in any case, they were talking about leav-ing. In early 2006 the US simultaneouslybegan to distance itself from the Shiites, criti-cizing them much more vocally about secretprisons and abuse of the Sunnis: in Shia eyesa second betrayal of support after similarpromises of American backing in 1991.

Secondly, after the Samara bombing, manyShia politicians unofcially stated that therewould be no reconciliation of the sects, thatcoexistence would not happen. Shiites con-cluded that the only thing to do was to grabas much territory and as many assets as pos-sible before the divorce. Many Shiites began toassert that turning the other cheek simply didnot work; a balance of terror was needed.

3 How doesIran t intothe largerequation?

It is impossible to separate Iran fromthe changing fortunes of the Shiitesin the Middle East because Iran repre-sents the regions largest Shia population.Washingtons Iraq policy, too, has essentiallybecome inseparable from its Iran policy.

In terms of Iranian involvement in Iraq,Western focus is often on military issues, butfar more important is the people-to-peoplerelationship. The opening of Iraq was cultur-ally, religiously, and emotionally very signi-cant to Shiites since the most important Shiashrines are located there. Shiites this isanother thing that distinguishes them fromorthodox Sunnis have a very personal andpassionate attachment, particularly at thefolk level, to their saints, imams, and shr ines.

The Iranian government, for instance, saidthat last year 1.2 mil lion Iranians went onpilgrimage to Iraq. Many of these pilgrimssimultaneously began to gravitate to Iraqsreligious leadership; Ayatollah Sistani hassince emerged as the single most importantreligious leader among Shiites everywhere.The point is that even if Iranian intelligencecan be kept out of Iraq, it will be very difcultto keep Iranians out of Iraq. To assume other-wise is a fal lacy. Their interest in Iraq is notsimply about political hegemony; it is aboutcultural access.

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Iran was the rst country to recognizethe Iraqi government, signing some tenagreements with it, promising billions ofdollars, and creating a huge volume of trade.The Iranians initia lly had many interests incommon with the US, above all guardingagainst the states collapse and promoting aShia government. It was exactly along theselines in 2004 and 2005 that the head ofIrans security council, Ali Larijani, offeredto meet with the American ambassador inIraq, formally endorsing talks with the USfor the rst time in 27 years. But for whatev -er reason, these talks did not happen; untillate February of this year the Americanshad actual ly turned the tables, saying notonly that there was no strategic commonground in Iraq between Iran and the US butalso that Iraq would indeed be the battle-ground between the two countries. With novested interest in Iraqs failure and a fear ofmigrant Sunni radicalism, Iran then found

itself in a similar situation as Syria. Neitherwants Iraq to fail, but the Americans impli-cation that Damascus or Tehran might benext gave both governments incentive tokeep the US busy in Iraq.

There is no doubt that Iran is on the r ise,not just as a military force but also as an eco-nomic and political one. It wants to assertits position in the region. It is clear that Iransees itself as the Brazil of the Middle East.I dont think Iran wants to export its revolu-tion; it is interested in a classical, regionalhegemonic presence. Ever since the 1980sthe issue of rivalry between Iran and SaudiArabia has focused on nation-state powerrather than ideology. Ruhollah Khomeini,political leader of the 1979 Iranian revo-lution, genuinely wanted to rule over allMuslims, but now Iran wants regional pre-dominance.

In this regard the two wars beginning in2001 and 2003 greatly beneted Iran. Theyremoved the Taliban and the Saddam regime

two Sunni bulwarks on both sides. Andthe destruct ion of the Iraqi army essentially

means that, for a generation, there will be nomilitary in the Persian Gulf region capableof containing Iran. The Iranians have alsoconcluded that Iraq has bogged down theUS, dampening the Americans appetite forother major military campaigns. Sitting afarin Tehran and observing the Congressionalelections in the US, it is very easy forIranians to come away rather condent thatthey have room to maneuver.

Iranian regional ambition is manifest -ing itself under a particularly virulentregime that is bellicose toward both the

single Arab views himself as less loyal to theArab cause than the next.

Within Iran, support of Hezbollah hasbecome a test of loyalty and nationalism.Hezbollah and Hamas are important trumpcards in their game of power. Until theissues between Iran and Israel and Iran andthe US are settled, Iranians are not going togive up on these groups, as they have nowbecome an important part of Irans strate-gic rivalry with the Arab world. Because ofthis Lebanon and Israel are now interwoveninto Iraq, the Shia-Sunni issue, and Iranian-Saudi relations. Not to say sectarianism iseverything. Its not. But sectarianism is nowvery intricately tied to everything and inu-ences the decisions of every player.

If the West is ever to think coherentlyabout the Middle East, it must recognizethat old paradigms dont work. The 1980spolicy of containing Iran, Pakistan, andAfghanistan ultimately meant funding

radical groups like the Jihadi, Sala, andal-Qaeda as well as the Taliban. It was effec-tive, but it proved not to be a clean weaponbecause ultimately al-Qaeda became aproblem for all Middle East governmentsthemselves, a number of which werenteven involved in Afghanistan, such as Egyptand Jordan. And in terms of American fall-out, the example of September 11 is obviousenough. The current sectarian rift is a strug-gle for power, but, at the end of the day, it pro-duces forces that have half-lives beyond thesectarian ght itself. Westerners must takethese sectarian divisions seriously and followpolicies that will minimize them, starting inIraq. This will require regional engagements,a framework for peace, and a political process

none of which actually ex ists now. Secondly,it means that outside forces ought to be work-ing to bring the regional powers together in amuch more inclusive way rather than follow-ing a policy of confrontation. Proceeding aswe are now will only entrench sectarianismfor many more decades to come, conrmingthe strategic map of the area as Shia versus

Sunni. And if the US wants to contain Iran,it must conceive of a strategy inclusive of thecountry and regulate it from within the exist-ing structure.

This text is excerpted from a longerconversation with Vali Nasr, whospent a week in Berlin as a C.V. StarrDistinguished Visitor. He is an adjunctsenior fellow at the Council on ForeignRelations and a professor of nationalsecurity affairs at the Naval PostgraduateSchool in Monterey, California.

The Berlin Journal 3

US and Israel and maintains its inam-matory denial of the Holocaust. But it isimportant to note that the Iranian claim toregional power is not just the ambition of awayward, hard-line president. It has also todo with socio-economic facts in Iran, andthe idea is very popular among Iranians.Even Iranians who dislike MahmoudAhmadinejad and his regime believe thatIrans rightful place in the Middle East isnot respected and that the country ought toexercise more inuence.

Iran has the industrial and scienticcapability to build a nuclear program, and iseconomically and social ly very vibrant. Theliteracy rate in Iran is about 70 percent, inTehran 86.8 percent. It is ex tremely wellconnected and information-wise. Withover 85,000 bloggers, Persian is now thethird largest language on the internet afterEnglish and Mandarin Chinese. Everyayatollah worth his salt in Iran has a web-

site and blog. By all estimates, it has oneof the highest rates of bloggers per capitaanywhere in the third world. These factswere reinforced under the reformists in the1990s with a high rate of foreign investment.There is a dynamism in the public sector.All this has to do with a bullishness and con-dence coming not only from the Iranianregime but from Iranian society as well.

4What must Westernpolicy take intoconsideration inthe future?

The West must recognize that national-ism in the Middle East is presently goingthrough various permutations. In the lan-guage of Hezbollah or of Iraqi Shiites, thereis a clear attempt to redene nationalism

along the lines of Iranian nationalism: anation-state dened by the culture and iden-tity of the larger people. So far they have notsucceeded. The obvious breakdown in Iraqshows that Arab identity is no longer suf-cient, namely because there is no agreementabout what the Arab identity is. Whom is itdened against, Iran or Israel? Perhaps anew consensus will emerge. Asked twentyyears ago if it would be thinkable for an Arabto cooperate with Israel against anotherArab, we probably would have said that it isimpossible. But it is now happening, and no


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In the run-up to the EU-US Summit in Washington, DC onApril 30, US Treasury DeputySecretary Robert Kimmitt met in

Berlin with Matthias Wissmann, Germanchair of the Committee on the Affairs ofthe European Union, to discuss the trans-atlantic market initiat ive. Michael Inacker,deputy editor of Germanys leading nanceweekly, WirtschaftsWoche, moderated thefollowing conversation, organized by theAcademy.

Michael Inacker The idea of a transatlanticmarket partnership was formerly receivedwith much skepticism in the US. What haschanged to make the present US adminis-tration favor this project?

Robert Kimmitt I was on the 1990 nego-tiating team in Par is that developed theframework under which we now hold yearlyEU-US Summits. At that time some in theUnited States questioned whether a unitedEurope was in the interest of the UnitedStates. That debate is now over; a unitedEurope is in the interest of Europe, theUnited States, and the world, and underpin-ning a st ronger transatlantic relationshipmust be a more integrated transatlanticmarketplace. That is why the United Statesboth appreciates and very much welcomesChancellor Angela Merkels initiative.

Inacker But we have seen such ideas andprojects in the past: a business dialoguethat brought business leaders together

from both sides of the Atlantic, for example.Do you believe that this new idea will provemore successful than past endeavors?

Kimmitt The chancellors initiative sets astrategic framework built upon measur-able tasks, against which this initiative wil lbe judged. Past structures such as theFinancial Markets Regulatory Dialogue,conducted between the US Treasury andEuropean Commissioner for InternalMarket and Services Charlie McCreevyand his team have worked quite well and

have produced real results in the nancialsector. We would like to see that spread toother sectors. The TransAtlantic BusinessDialogue ( tabd ) is also still a live, well, andvery effect ive. Chancellor Merkel and Imet with the leaders of the tabd in Davos,along with EU Trade Commissioner PeterMandelson and European Commissionerfor Competition Neelie Kroes, for a veryproductive session. The TransatlanticPolicy Network, which also brings legisla-tors into the process, has proved quite use-

ful. We are discussing how to put in placea process that integrates these successfulstructures from the past with new struc-tures to produce results to benet both oureconomies.

Inacker Mr. Wissmann, it is said that youare one of the brains behind ChancellorMerkels initiative. What gives you the con-dence that now is the right time to pursuethis idea?

Matthias Wissmann The rst reason forcondence is that the top leaders in theUS President Bush, Treasury SecretaryHenry Paulson, Bob Kimmitt andin Europe President of the EuropeanCommission Jos Manuel Barroso and,most important, Chancellor Merkel havetruly identied themselves with theproject. In the past regulatory frameworkshave typically been relatively bureaucraticwith l ittle involvement by top leaders. Ourexperience with the European internalmarket has shown that you need top lead-

ers to press the bureaucracies with a top-down approach to speed up any st rategicidea of major signicance.

Secondly, leaders on both sides of theAtlantic understand that we must reducethe burden of regulations. Americans todayagree that Sarbanes-Oxley is not neces-sarily the ultimate solution for regulation,while we understand that some of our typi-cally European over-regulations are alsonot what tomorrows world will need tostrengthen transatlantic business sectorsand stimulate jobs and growth.

Inacker My impression a few months agowas that the US would be against the initia-tive if it were conceived as a kind of tradeblock against new-world competitors likeChina, India, and Russia. Is the project nowmore viable because it avoids addressingopen trade?

Kimmitt When any European Union presi-dency but especially Germanys presi-dency makes a transatlantic initiative acentral element in its agenda, it sends a verystrong political signal. Such an initiativerecognizes that progress in the economic-nancial area improves the overall politicalrelationship between Europe and Americaand can provide a strong foundation intimes of political difculty. But it was neverintended to be the United States, Europe,or the United States and Europe togetheragainst the world.

Bringing our two economies closer

together also benets the global economy.There had indeed been some discussion lastyear about whether this might be a t rans-atlantic free-trade area. Our priority rightnow in trade is successful completion ofthe Doha Round. But a successful launchof the Merkel initiative will not only notdetract from Doha efforts, it should providemomentum for our continuing dialogueregarding Doha.

Inacker Sarbanes-Oxley is becoming moreand more of an issue for German compa-nies listed in New York. Some contend thatthe se c s standards overcompensate forpast US mistakes and are unjustly used toenforce regulation in other countries. Doyou see the transatlantic market init iative asa means to nd a middle ground in corpo-rate governance?

Wissmann Secretary Paulson said veryclearly in an earlier speech that he real-izes what has to be done to make New Yorkmore competitive as a marketplace. Prudent

Americans and Europeans understand thattheir respective regulatory frameworks areill-suited to the world of tomorrow. Oursis not an initiative directed against anyoneelse but an afrmation of modern stan-dards of corporate governance of transpar-ency, proper antitrust regulations, and realmarket economy, all standards to which theUS and Europe are more accustomed thanmany other countries. If we aim to lay outthese standards and rules of accounting,competition, and transparency for the world,we should rst do our own homework. If

The Merkel Plan Robert Kimmitt and Matthias Wissmann on theTransatlantic Economic Partnership Initiative


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The Berlin Journal

Europe and America agree on principlestandards of corporate governance, I amsure that the rest of the world wil l follow.I am not sure that we will have this opportu-nity in another f ty years, given the size ofthe American and European economies inrelation to other parts of the world.

Inacker Mr. Secretary, in the businessworld, some leaders describe the use ofSarbanes-Oxley as a kind of unilateralistinstrument of American economic policy.Do you really sense a willingness in theAmerican administration to compromiseon issues of corporate governance?

Kimmitt First, I think there has been amuch greater use of multilateral forums toaddress some of the most difcult issuesduring the second Bush term, exempli-ed by US coordination with the UN onboth Iran and North Korea, the Six-Party

talks on North Korea, and US support ofEuropean efforts to engage Iran, i f Iran iswilling to suspend its nuclear program. Onthe specic economic and nancial issues,I think we do have a very good mechanismalready in place: the Financial MarketsRegulatory Dialogue. When CommissionerMcCreevy was in Washington, he met notjust with us at the Treasury but also withthe Federal Reserve, the se c , and othersto discuss many of the points you men-tioned. We are open to discussing anythingin this expanded dialogue. I think you arecorrect to say that American companieshave expressed concerns about Sarbanes-Oxley, as have foreign companies. Underthe chairmanship of Christopher Cox, whobefore taking his position had served in theCongress, the executive branch, and theeconomic sector, the se c is making a partic-ular effort to l isten and reach out to the for-eign business community. The se c s recentruling to simplify deregistration from USmarkets exemplies this openness.

Inacker Is the US government interestedin stricter regulat ion of transparency ofhedge funds?

Kimmitt This is a very good example of ourcurrent and future cooperation. In Februarythe Presidents Working Group, comprisedof the Treasury, the Federal Reserve, these c , and all of our bank regulators, putout a statement on private pools of capital,which include hedge funds, private equity,and venture capital. The message was quiteclear; we cannot have business as usual. We

need to watch part icularly for investor pro-tection and systemic risk. Those principleswere supported by Mr. McCreevy. Again, wewould suggest that transatlantic dialoguetake place within the Financial MarketsRegulatory Dialogue and the broader globaldialogue within the G7.

Inacker Mr. Wissmann, two major issuesyou are currently facing as head of the EUCouncil of the German Parliament are theenvironment and energy. Do these top-ics belong in the overall framework of thetransatlantic market init iative, or would yourecommend addressing them separately?

Wissmann In the long run, the environmentmust be part of a transatlantic economicinitiative. It makes sense to nd moreconsensus on technical standards and theautomotive industries, not only on behalfof the environment but also on behalf of

industry and the consumer. But we must berealistic and thus cannot think that we willbe able to reinvent the world totally anewin 12 months. If the initiative is successful,however, we might then have a real chanceto address major questions not only of eco -nomic but also of environmental strategies.

Kimmitt Let me make clear that we wel-come the fact that the chancellor took upenergy security and climate change in theoriginal proposal. Though some may thinkotherwise, those two subjects are quiteimportant to the United States. Both wereaddressed in the presidents State of theUnion speech, and he made a number ofspecic proposals that target carbon dioxideemissions. We expect that these issues willbe part of this new dialogue, but we havebeen discussing these important issuesin the G8 and other multilateral forumsas well.

Inacker Mr. Secretary, could there andshould there also be a new structural frame-

work for American and European business-economic relations, or is the initiative just amatter of memorandums of understandingand agreements?

Kimmitt I would say that there is alreadya well-established structure at the senior-most level. What we should consider is howto encourage the same kind of engagementamong senior ofcials below the level ofheads of state and government. I wouldlike to see the same kind of informal andcollaborative dialogue that we have in the

nancial markets area in other sectors, beit in chemicals, energy, or transportation. Afew key people on each side would report tosenior ofcials, who would in turn br ief theleaders before annual Summits.

It is crucial that a process be set in placeto ensure that the initiatives importancecontinues through future US administra -tions. In Europe, of course, there is both theEU and the individual member state level,plus the Commission. I always ask a verypractical question: who sits across the tablefrom the US president to give him the brief-ing that will prepare him for the upcom-ing EU-US Summit? I want that person, orsomeone close to him, overseeing this pro-cess for the US Government. I would imag-ine the same is true on the European side.There must be an additional mechanism toensure the initiatives continued vitality.

Inacker What makes you condent that,

after this German EU presidency comes to aclose, there will really be a set of procedures,structures, and people in place to survivefuture terms?

Wissmann I am very condent because, atthe last European Summit, the 27 leaders ofthe European Union unanimously agreedon the initiative, obliging any future com-mission to follow that route. PresidentBarroso is very clearly convinced of itsworth, too; he has a lways worked for trans-atlantic goals, and Chancellor Merkel andothers, even leaders of center-left govern-ments in Europe, are convinced that weneed closer cooperation with the US andCanada in addition to our strategic militaryand security partnerships. The initiativeaims to speed up certain processes in therest of the world, from corporate gover-nance to the environment to deregulation.One year ago, when we launched the idea,Secretary Kimmitt and I both had doubtsabout whether it would be successful.Now we believe there is a high probability

that future governments will continuethis pursuit.

Kimmitt Our leaders are going to continueto meet annually. The question is, whenthey meet, will they approach the discus-sion from a tactical or a strategic frame-work? Chancellor Merkel has put thisimportant part of the relationship into astrategic framework, into which individualtactical components must t. We will beproudest if we know that our successors wil lalso play their parts.


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One November evening long agoin Greenpoint, Brooklyn, a 13-year-oldnamed William Troeller hung himselffrom the transom in his bedroom. Theboy had watched his family slide into anincreasingly desperate situation. His olderbrother, Harold, told a newspaper reporterthat William was sensitive and always feltembarrassed about asking for his share atmealtime. The Herbert Street police station

The Forgotten ManA New View of the Great Depressionby Amity Shlaes

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near the Troeller home helped to arrangethe funeral. Burial would be in a Catholiccemetery. He Was Reluctant about Askingfor Food, read the headline in the New YorkTimes.New York that year had a Dickensianfeel.

William Troellers was just one tragedyin a city fu ll of tragedies. The New Yorkbirthrate that month was one of the loweston record. A few weeks pr ior to Williamssuicide the Dow had dropped nearly 8 per-cent the day had al ready come to be knownas Black Tuesday. It was a dark momentfor the country as well. The BrookingsInstitution, a new think tank, had warnedthat the balance of the economy was pre-carious. Observing from Britain, theEconomistwould conclude in retrospect thatthe United States seemed to have forgotten,for the moment , how to grow.

The story sounds familiar. It is remi-niscent of the descriptions we hear of the

Great Crash of 1929. But in fact these eventstook place in the autumn of 1937. This wasa depression within the Depression. It wasoccurring ve years after Frankl in Rooseveltwas rst elected and four and a half yearsafter he introduced the New Deal. It was tak-ing place eight years after President HerbertHoover rst made his own rescue plans fol-lowing the 1929 stock market crash.

The standard history of the GreatDepression is one we know. The 1920s werea period of false growth and low morals.There was a certain godlessness the GreatGatsby image to the decade. The crash wasthe honest acknowledgement of the break-down of capitalism and the cause of theDepression. A dangerous ination causedby speculating margin t raders broughtdown the nation. There was a sense of areturn to a sane, moral country with thecrash, a sense that the economy of 1930or 1931 could not revive without ex tensiveintervention by Washington. Roosevelt, sounlike the mistaken Hoover, created theNew Deal, which tided the country over. In

this way the country fended off revolution ofthe sort bringing down Europe. Without theNew Deal, American democracy would havebeen lost.

The same history teaches that the NewDeal was the period in which Americanslearned that government spending wasimportant to recoveries and that the con-sumer alone can solve the problem of

excess capacity on the producers side. Theattitude is that the New Deal is the bestmodel we have for what government mustdo for weak members of society, in both

times of crisis and times of stability. Andthat the New Deal gave us splendid leadersand characters: Roosevelt himself, a crip-pled man who bravely willed us all back intoprosperity and has been called the apostleof abundance. The Brain Trust, thoughtfulmen whose insights validated their exper i-ments. Or so the storyline.

The usual rebuttal to this from the rightis that Hoover was a good man, a lbeit mis-understood, and Roosevelt a dangerous,even an evil one. The stock market of the1920s was indeed immoral, too high, ina-tionary and deserved to crash. Another setof critics focuses on Roosevelts early socialprograms. Yet a third set of crit ics, an angryfringe, has argued that Roosevelts BrainTrusters reported to Moscow.

For many years now, these have been theparameters of the debate. It is time to revisitthe late 1920s and the 1930s. Then we seethat neither the standard history nor the

standard rebuttal entirely captures the reali-ties of the period. The rst reality was thatthe 1920s was a great decade of true eco-nomic gains, a per iod whose strong positiveaspects have been obscured by the troublesthat followed. Those who placed their faithin laissez-faire economics in that decadewere not all godless. Indeed religious pietymoved some, including President CalvinCoolidge, to hold back, to pause before inter-vening in private lives.

The fact that the stock market rose highat the end of the decade does not mean thatall the growth of the preceding ten yearswas an illusion. American capitalism didnot break in 1929. The crash did not causethe Depression. It was a necessary correc-tion of a too-high stock market but not a nec-essary disaster. The market players at thetime of the crash were not villains, thoughsome of them Albert Wiggin of Chase,who shorted his own banks stock behavedreprehensibly. There was indeed an anni-hilating event that followed the crash, onethat Hoover never understood and Roosevelt

understood incompletely: deation.Hoovers priggish temperament, as

much as any philosophy he held, causedhim both to misjudge the crash and to failin his reaction to it. And his preferencefor Germany as a negotiating par tner overSoviet Russia later blinded him to the dan-gers of Nazism. Roosevelt by contrast hadwhat was described as a rst-class tempera-ment. His calls for courage, his FiresideChats, all were intensely important. Theonly thing we have to fear is fear itself; inthe darkness Roosevelts voice seemed to

shine. He allowed Cordell Hull to writetrade treaties that in the end would benetthe US economy enormously. Rooseveltsdislike of Germany, which dated from child-hood, predisposed him to a wariness ofHitler and contributed to his eventual deci-sion that the United States must come toEuropes side.

Still, Hoover and Roosevelt were alike inseveral regards. Both preferred to controlevents and people. Both underestimatedthe strength of the American economy.Both doubted its ability to right itself in astorm. Hoover mistrusted the stock mar-ket. Roosevelt mistrusted it more. Rooseveltoffered rhetorical optimism, but pessimismunderlay his policies. Though Americansassociated Roosevelt with bounty, hisinsistent emphasis on sharing betrayed a

conviction that the country had entered apermanent era of scarcity. Both presidentsoverestimated the value of government plan-ning. Hoover, the Quaker, favored the com-munity over the individual. Roosevelt, theEpiscopalian, found laissez-faire economicsimmoral and disturbingly un-Christian.

And both men doctored the economyhabitually. Hoover was a constitutional-ist and took pains to intervene within therules, but his interventions were substan-tial. Roosevelt cared litt le for constitutionalniceties and believed they blocked progress.His remedies were on a greater scale andoften inspired by socialist or fascist modelsabroad. A number of New Dealers, includ-ing agricultural economist and later head ofRoosevelts Resettlement Administration,Rexford Tugwell, had been profoundlyshaped by Mussolinis Italy and especially bySoviet Russia. That inuence was not paren-thetic. The hoarse-voiced opponents of the

New Deal liked to focus on the connectionsbetween these men, the Communist Part y,and authorities in Soviet Russia. And sev-eral important New Dealers did indeed havethose connections, most notably LauchlinCurrie, Roosevelts economics adviser inlater years, and Harry Dexter White, at theTreasury. Whites plan for the pastoraliza-tion of Germany takes on a new aspect whenwe know this.

But few New Dealers were spies or evencommunists. The emphasis on that issueis in any case misplaced. Overall, the

American capitalism did notbreak in 1929. The crash didnot cause the Depression.


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problem of the New Dealers on the left wasnot their relationship with Moscow or theCommunist Party in the US, if indeed theyhad one. The problem was their navetabout the economic value of Soviet- styleor European-style collectivism and thefact that they forced such collectivism ontheir own country. Fear of being labeled ared-baiter has too long prevented histori-ans from looking into the Soviet inuenceupon American domestic policy in the

1930s.What then caused the Depression?

Part of the trouble was indeed the crash.Part was weather. Part was the dea-tion, unrecognized, real, and severe. Butthe deepest problem was the interven-tion, the lack of faith in the marketplace.Government management of the late1920s and 1930s hurt the economy. BothHoover and Roosevelt misstepped. Hooverordered wages up when they should havegone down. He allowed a disastrous tar-iff, Smoot-Hawley, to become law when

he should have had the sense to block it.He raised taxes. After 1932 New Zealand,Japan, Greece, Romania, Chile, Denmark,Finland, and Sweden began seeing indus-trial production levels rise again but theUnited States did not.

Roosevelts errors had a dif ferent qualitybut were equally devastating. He createdregulatory, aid, and relief agencies basedon the premise that recovery could onlybe achieved through a large military-style

effort. Some of these were useful thenancial inst itutions he established uponentering ofce. Some were inspiring theCivilian Conservation Corps, for example,which created parks, bridges, and roads westill enjoy today. Establishing the Securitiesand Exchange Commission, enactingbanking reform as well as the reform ofthe Federal Reserve system al l had a stabi-lizing effect.

But other new institutions, such as theNational Recovery Administration, diddamage. The nr a s mandate mistook mac-

roeconomic problems for micro problems,seeking to solve the monetary challengethrough price setting. The stringencyof nr a rules perversely hurt businesses.They frightened away capital, and theydiscouraged employers from hiring work-ers. Another problem was that laws likethat which created the nr a and Rooseveltsigned a number of them were so broadthat no one knew how they would be inter-preted. The resulting hesitation in itself

arrested growth.Where the private sector could help to

bring the economy back in the arena ofutilities, for example Roosevelt and hisNew Dealers often suppressed it. The cre-ation of the Tennessee Valley Authoritysnuffed out a potentially successful privateeffort to light up the South. The companythat would have delivered that electricitywas future presidential candidate WendellWillkies company, Commonwealth andSouthern. The New Yorkermagazines car-toons of the plump, terried Wall Streeter

Post Of ce, Crossville, Tennessee, 1937


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The big question about the AmericanDepression is not whether war withGermany and Japan ended it but ratherwhy the Depression lasted until that war.From 1929 to 1940, government interven-tion helped to make the Depression Great.The period was not one of a moral battlebetween a force for good the Rooseveltpresidency and forces for evil. It was aperiod of power struggle. The two sectorsof the economy, the public and the private,competed relentlessly. At the beginning,the private sector ruled. By the end, whenWorld War II began, it was the public sectorthat dominated.

Roosevelt was frank about the contest.As he put it in his second inaugural address,he sought unimagined power. He, hisadvisers, and his congressional alliesinstinctively targeted monetary control,utilities, and taxation because they werethe three sources of revenue whose control

would enlarge the public sector the most.But if so much of the New Deal hurt the

economy, why did Roosevelt win reelect ionthree times? Why, especially, the landslideof 1936? In the case of the third and fourthRoosevelt terms the answer is clear: thethreat of war and war itself. Roosevelt,

were accurate; business was terried of thepresident. But the cartoons did not depictthe consequences of that intimidation: thatbusinesses decided to wait Roosevelt out,hold on to their cash, and invest in futureyears. Yet Roosevelt retaliated by introduc-ing a tax the undistributed prots tax topress the money out of them.

Such forays helped to bring about thedepression within the Depression of 1937.One of the most famous Roosevelt phrasesin history, almost as famous as fearitself, was Roosevelts boast that he wouldpromulgate bold, persistent exper imen-tation. But Roosevelts commitment toexperimentation itself created fear, andmany Americans knew this at the time. Inautumn 1937, the New York Timesdeliveredits analysis of the economys downturn:

The cause is att ributed by some to taxationand alleged federal curbs on industry; byothers, to the demoralization of production

caused by strikes. Both the taxes and thestrikes were the result of Roosevelts policy;the strikes had been made possible by theWagner Act the year before. Fear frozethe economy, but that uncertainty itselfmight have a cost was something the experi-menters simply did not consider.

w w w.a t la n t ic - t i m e s

. c o m

A Monthly Newspaper from Germany

unlike his narrow-minded Republicanopponents, understood the dangers thatNazi Germany represented. In 1936, how-ever, the reason for victory was different.

That year Roosevelt won because he cre-ated a new kind of interest group politics.The idea that such groups might nd main-stream parties to support them was notnovel; Republicans, including the Harding

and Coolidge administrat ions, had longpracticed interest group politics on behalfof big business with tar iffs. Roosevelt, how-

ever, systematized interest group politicsto include many constituencies laborers,senior citizens, farmers, union workers.The president made groups where onlyindividual citizens or isolated cranks hadstood before, ministered to those groups,and was rewarded for that ministry

Fear of being labeled a red-baiter has too long preventedhistorians from looking intothe Soviet influence uponAmerican domestic policy inthe 1930s.


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Almost by accident, Roosevelt happenedon an economic theory that validated hispolitics and his moral sense: what we nowcall Keynesianism. Keynesianism, namedafter John Maynard Keynes, empha-sized consumers, who were also voters.Keynesianism said the government couldspend its way out of trouble. To Rooseveltand his administration the theory gave

license for perpetual experi-mentation and justied gov-ernment spending. Spendingseemed humane andwas, for some. Yet focus-ing on consumers meantthat Washington neglectedthe producer. Focusing onexperiments neglected thequestion of whether unceas-ing experimentation mightfrighten business into terri-ed inaction. The result wasthat two in ten were onceagain unemployed in the later1930s hardly humane.

Too much attention hasbeen paid to what politicalpolls said about the NewDeal, while too little has beenpaid to two other measures.One was the unemployment

rate, which did not return topre-crash levels until the war.The other was the stock mar-ket. Uncertainty about whatto expect f rom internationalevents and Washington made

the Dow Jones industrial average jumparound in a fashion not repeated throughthe rest of the century; seven out of the tenbiggest up days of the twentieth centurytook place in the 1930s. The Dow did notreturn to 1929 levels until nearly a decadeafter Roosevelts death.

with votes. The rst peacetime year inAmerican history in which federal spend-ing outpaced the total spending of thestates and towns was that election year of1936. Roosevelts move was so profoundthat it changed the English language.Before the 1930s the word liberalismstood for the individual; afterward the termincreasingly stood for groups.

The Forgotten Manwas written because of a problem that exists today: entitle-

ments what Europeans call social costs or pending obli-

gations in regard to public pensions, public health, and edu-

cation. Entitlements threaten to drag Western nations down.

They obscure the differences between political parties and

take the joy out of politics. No lawmaker has the license

Roosevelt had. Every lawmaker must take up the heavy enti-tlement burden.

As presidential candidate John McCain, a Republican,

told a meeting of the New York Economic Club last year, My

children and their children will not receive the benefits we

enjoy. That is an inescapable fact, and any politician who

tells you otherwise, Democrat or Republican, is lying.

Continental Europe suffers from a more advanced

stage of the same malady. Both Gerhard Schrder and

Angela Merkel have defended high taxes as the only

means of paying for entitlements.

At some point I became interested in finding the

basis for these expensive social promises. In the end

Street Scene, Natchez, Mississippi, October 1935

I came to Roosevelts New Deal. From American Social

Security to farm subsidy to pensions for senior citizens,

the programs of the 1930s decisively stamped modern

culture. Germans, of course, point out that Bismarck

first created the modern social welfare state; Roosevelts

New Dealers also borrowed from Britain, not to mention

Soviet Russia and Mussolinis Italy. But the precedent of

the New Deal matters, too.For many decades Westerners believed that if the US

could sustain its vibrancy even as it maintained a social

welfare net then other economies could do this double

duty as well. Many of us believed that without the cre-

ation of a social welfare state we would all have been

vulnerable to fascism or worse. What I lear ned in the

course of my research was that all these assumptions do

not necessarily hold in the case of the US. New Dealers

exaggerated the threat of fascism in the US in the 1930s,

and people talked about that exaggeration at the time.

We used to believe that the division of Germany was

inevitable and, probably, interminable. Now we know

that German Zweistaatlichkeit , or double statehood,

was temporary and more of an accident of history than

we could have ever imagined. The necessity of the more

extreme aspects of the New Deal turns out likewise to

have been an assumption of the period of World War II

and the cold war. What if Roosevelt had instead reduced

taxes drastically, had reliably loosened the money sup-

ply, had confined the New Deal to the creation of theSecurities and Exchange Commission? And what if he

had made this alternate program the subject of his

compelling radio Fireside Chats? The US might have

been better off in 1939 than it was.

I first read through the traditional Depression lit-

erature in my months at the Academy. A good share of

those books were tucked away in the dusty corners of

the libraries of former East Berlin. Germans, more than

citizens of almost any country, know that economics

mat ter, which is why it is such a great pleasure to debate

with them.

Amity Shlaes


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About half a cent urybefore the Depression, a Yalephilosopher named Wil liamGraham Sumner penned a lec-

ture against the progressives of his ownday and in defense of classical liberal-ism. Applying his own algebra of politics,Sumner warned that wel l-intentionedsocial progressives often coerced unwit-

ting citizens into funding dubious socialprojects. He wrote: As soon as A observessomething which seems to him to bewrong, from which X is suffering, A talksit over with B, and A and B then proposeto get a law passed to remedy the evil andhelp X. Their law always proposes to deter-mine what A, B, and C shall do for X. Butwhat about C? There was nothing wrongwith A and B helping X. What was wrongwas the law and the indentur ing of C tothe cause. C was the forgotten man, theman who paid, the man who never isthought of.

In 1932 a member of Roosevelts BrainTrust, Ray Moley, recalled the phrase,although not its provenance, and he inser t-ed it into the candidates rst great speech.If elected, Roosevelt promised, he would

act in the name of the forgotten manat the bottom of the economic pyramid.Whereas C had been Sumners forgottenman, the New Deal made X the forgot-ten man the poor man, the old man, thelaborer, or any other recipient of govern-ment help.

We have always wanted to know thestory of A, the progressive of the 1920sand 1930s whose good intentions inspiredthe country. But it is important a lso toconsider the story of C, the American whowas not thought of. As an editorialist in

Indiana wrote in 1936, Who isthe forgotten man in Muncie?I know him as intimately as Iknow my own undershirt. Heis the fellow that is trying to getalong without public relief andhas been attempting the samething since the depression thatcracked down on him.

Of course the Hoover andRoosevelt administrationsmay have had no choice but topursue the policies that theydid. They may have spared thecountry something worse anAmerican version of Stalinscommunism or Mussolinisfascism. But they especiallyRoosevelt may also have exag-gerated extremisms threat.The politicized New Dealerstold them that European-style

laws were necessary to tamean electorate on the brink ofrevolution. But in their myopiathey often overlooked the factthat Americans even in the1930s were fundamentally

different from their European counter-parts. Class warfare was an import, not ahomegrown act ivity, and often felt forced,even in the 1930s. As the European writerOdette Keun reported when she came tothe States, many Americans, even factoryworkers, fully expected to become rich oneday. Labor in America is conservative. Itis one of the most abbergasting discover-ies I have made. This conservatism, shewrote, was partly due to the temper of theAmerican workingman himself.

It is not right that we permit the argu-ment that New Deal intervention savedUS capitalism to obscure some of the con-sequences of the two presidents policies.Nor is it right that we overlook the failuresof their philosophies. Glorifying the NewDeal obscures the Cs, the bystanders, the

third part ies. They spoke frequently of theforgotten man at the time but eventuallybecame forgotten men themselves. Goingback to the Depression is worthwhile, ifonly to retrieve their lost story.

Amity Shlaes, Academy JPMorganFellow in spring 2003, is a visit-ing fellow at the Council on ForeignRelations and a syndicated colum-nist for Bloomberg News. Her bookThe Forgotten Manwill be publishedby HarperCollins in June 2007.

Photographer Benjamin Shahn

Lithuanian-born American artist Benjamin Shahn

is best known for his work as a Social Realist in

painting and graphic design, drawing deep influ-

ence from an early apprenticeship under the

Mexican painter Diego Rivera. Some of his more

stirring and overlooked entries in the world of

art, however, lie in the medium of photography.At the urging of his friend Walker Evans, Shahn

joined the photograph ic team of the Farm Security

Administration in 1935 and traveled through the

American south alongside two future standouts of

the craft, Evans and Dorothea Lange. While Shahn

at times viewed his photography as an interme-

diary step toward his tempera and mixed-media

renderings, the prints borne of his FSA commis-

sion constitute a potent artistry in their own right.

The works on these pages derive from a collec-

tion newly acquired by the International Center of

Photography in New York.

Puppets for the Show, Red House, West Virginia, 1937

berlin journal 14

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