The American Enterprise Institute vs the Council on Foreign Relations
There is an important debate now in progress between key sectors of the
American ruling class over imperial strategy and tactics in Iraq and Iran,
the outcome of which could have momentous consequences. The struggle over
future policy can be seen in Congress, in the executive branch, and between
Congress and the executive branch, all influenced by ruling class money,
media and expertise, and may reach the level of a constitutional crisis
before it has run its course. The ruling class faction on each side of
the conflict and their arguments can be encapsulated by contrasting the
nature and policy positions of the American Enterprise Institute (AEI)
and the Council on Foreign Relations (CFR).
The AEI, founded in 1943, is a younger think tank than the CFR. Unlike
the CFR, which has liberal and middle of the road members, the AEI has
always focused exclusively on the right wing side of the political/idealogical
spectrum. Variously called Washington’s “premier conservative think tank,”
“the most hawkish of Washington’s think tanks” and “the innermost belly
of the neoconservative beast,” during its early history the AEI worked
mainly on domestic economic issues. After Christopher DeMuth became president
of AEI in 1986, it began to expand its studies of both foreign and social
policy. During this period AEI also adopted its disputatious intellectual
style with the promotion of dubious ideas which helped Republicans and
right-wing Democrats even if untrue. Examples of such ideas among many
include the Bell Curve argument, which supposedly showed the racial basis
of IQ, and the Laffer Curve, purporting to prove that tax cuts lead to
more government revenue. The AEI’s funding base depends on major corporations
like Exxon-Mobil and top conservative foundations like Bradley, Smith-Richardson,
and Scaife. It does not have a large membership base like the CFR, and
relies on about 50 resident “scholars and fellows” to research and write
the op-ed pieces, books, and position papers promoting the “conservative
revolution.” Many are also invited to join the federal government. The
names of key AEI operatives include people like John Bolton, Richard Perle,
John Yoo, Newt Gingrich, Paul Wolfowitz, Joshua Muravcik, Michael Rubin,
Lynne Cheney (wife of the VP), Michael Ledeen, Frederick W. Kagan, and
Irving Kristol. The first six of these people have been CFR members at
one time or another. Former AEI trustees include Vice President Dick Cheney,
who is a long-time CFR member who has also served as a CFR director. At
an AEI dinner in January 2003 celebrating Irving Kristol, the neoconservative
godfather, President George W. Bush underscored the institute’s impact.
After commending AEI for having “some of the finest minds in our nation,”
the president said: “You do such good work that my Administration has borrowed
20 such minds.”
On its website, the AEI says it “is governed by a Board of Trustees composed
of leading business and financial executives.” The top leadership of the
AEI illustrates that it is industrial capital, including the oil industry,
which is most prominent, with finance capital in a junior role. Officers
President Christopher DeMuth—an expert in regulatory law, he was a staff
assistant in the Nixon White House and an administrator in the Office of
Management and Budget during the first Reagan administration. He has worked
for several corporations, including as a board member of State Farm Insurance.
Since 1993 he has been the chair of three family-owned manufacturing corporations,
Clean Burn, Millcreek, and DeMuth Steel Products.
Chair Bruce S. Kovner—founder and chair of Caxton Associates, a hedge fund
that trades in global commodity markets. His estimated net worth is $3
billion, putting him in the top 100 richest Americans according to Forbes.
Vice Chair Lee R. Raymond—former CEO of ExxonMobil oil company, he is known
for having guided this firm to the largest profit by any company ever in
2005, $36 billion, since exceeded by this same company. As one result,
Raymond recently received a retirement package worth about $400 million.
He is also a CFR member.
Treasurer Tully M. Friedman—chair and CEO of Friedman, Fleischer & Lowe,
a private investment firm, and a director of Mattel, Clorox and Capitalsource.
Chair Peter G. Peterson—formerly chair of the investment banking firm of
Lehman Brothers, Kuhn Loeb, and the Federal Reserve Bank of New York. Currently
chair of the Blackstone Group, a private equity, merger, and acquisitions
firm that also provides financial advisory services to corporations.
Vice Chair Robert Rubin—formerly an executive with the global investment
banking firm Goldman Sachs, a director of the New York Stock Exchange and
Bill Clinton’s Treasury Secretary, he is now a director and the chair of
the executive committee of Citigroup, which includes Citibank and has been
called “the world’s largest company” with reported assets of $1.9 trillion.
Vice Chair Carla A. Hills—operates her own firm, Hills and Company, an
international consulting business advising U.S. businesses on investment,
trade and risk assessment.
Honorary Chair David Rockefeller—a former chair of both the CFR and Chase
Manhattan Bank and called the “…indisputable chair of the American establishment.”
Honorary Vice Chair Maurice Greenberg—chair and CEO of the American International
Group, the worlds largest commercial insurance company.
President: Richard Haass—an intellectual serving power, has written ten
books, served as director of Policy Planning in Colin Powell’s State Department
(2001-2003) and a was a Special Assistant to President H.W. Bush, (1989-1993).
Founded in 1921, the CFR has long been the most powerful of U.S. ruling
class think tanks. It tries to include all segments of the ruling class
under the leadership of the dominant sector of financial capital, trying
to maintain consensus within the powerful on what policies best serve the
overall interest of their class. The organization is funded by its members,
family foundations (like Ford and Rockefeller), and large corporations.
Its membership of 4,282 includes a small liberal wing, a big middle group
of mainstream Republicans and Democrats, and a right-wing “neo-con” sector,
some of which overlaps with the AEI. It operates its think tank through
its Studies Program, with an administrative staff, 48 fellows, and 25 research
associates. Its in-house journal, Foreign Affairs, calls itself “the most
influential periodical in print.” Its website says it is “…one of the most
respected and influential think tanks in the world today” and calls its
membership “…a large and diverse group consisting of many of the most influential
Americans in the field of international affairs.” The CFR is accurately
summed up as “the citadel of America’s establishment.” The top leadership
of the organization illustrates the dominance of the largest and most powerful
of finance capitalists. They include:
Iraq War Policy
In 2002-2003 leaders of both the AEI and CFR were strong supporters of
the U.S. invasion, occupation and “regime change” in Iraq. Since then the
positions of leading members of the two organizations have gradually diverged.
The AEI still believes it possible and wants to achieve military victory
in Iraq, as illustrated by the current policy of escalation (“surge”) planned
and successfully promoted to the Bush administration by AEI “resident scholar”
Frederick W. Kagan. Late in 2006 Kagan wrote the following analysis and
policy recommendations aimed at the Bush administration and the wider U.S.
public: “Victory is still an option in Iraq. America, a country of 300
million people with a GDP of $12 trillion, and more than 1 million soldiers
and marines, can regain control of Iraq, a state the size of California
with a population of 25 million and a GDP under $100 billion.
“Victory in Iraq is vital to America’s security. Defeat will lead to regional
conflict, humanitarian catastrophe, and increased global terrorism. Iraq
has reached a critical point. The strategy of relying on a political process
to eliminate the insurgency has failed. Rising sectarian violence threatens
to break America’s will to fight. This violence will destroy the Iraqi
government, armed forces, and people if it is not rapidly controlled.
“Victory in Iraq is still possible at an acceptable level of effort. We
must adopt a new approach to the war and implement it quickly and decisively….
We must act now to restore security and stability to Baghdad. We and the
enemy have identified it as the decisive point…
“There is a way to do this.
“We must change our focus from training Iraqi soldiers to securing the
Iraqi population and containing the rising violence. Securing the population
has never been the primary mission of the U.S. military effort in Iraq,
and now it must become the first priority.
“We must send more American combat forces into Iraq and especially into
Baghdad to support this operation. A surge of seven Army brigades and Marine
regiments to support clear-and-hold operations starting in the spring of
2007 is necessary, possible, and will be sufficient.
“These forces, partnered with Iraqi units, will clear critical Sunni and
mixed Sunni-Shi’a neighborhoods, primarily on the west side of the city.
“After the neighborhoods have been cleared, U.S. soldiers and Marines,
again partnered with Iraqis, will remain behind to maintain security.
“As security is established, reconstruction aid will help to reestablish
normal life and, working through Iraqi officials, will strengthen Iraqi
“Failure in Iraq today will require far greater sacrifices tomorrow in
far more desperate circumstances. Committing to victory now will demonstrate
America’s strength to our friends and enemies around the world.”
This is the basic policy that the Bush administration adopted in early
2007 and is now following in Iraq. It basically gives up on pretending
to create “democracy” in Iraq and train the Iraqi army to take over. Instead
it attempts to impose a colonialist solution through U.S. military force
over the longer term, with the Iraqi central “government” and the needs
of the Iraqi people increasingly irrelevant to the decisions being made.
Although some CFR fellows like Max Boot largely adhere to the AEI line,
key leaders of the CFR have a different view of the current situation and
what should be done in Iraq. Despite having a number of its members in
key positions in the Bush White House, such as Condoleezza Rice as Secretary
of State, Robert M. Gates as Secretary of Defense and Steven J. Hadley
as National Security Adviser, what is apparently the dominant view within
the CFR’s top leaders and probably most members did not prevail in the
decision to escalate. The current view of CFR’s mainstream is best illustrated
by statements from its President Richard N. Haass, the CFR-connected Baker-Hamilton
Study Group and a recent CFR report by fellow Steven Simon.
Haass, arguing that the Iraq disaster marks the end of the American era
in the Middle East, is blunt in his assessment of the situation facing
the U.S. in the world and in Iraq: “…I can’t think of a time when the United
States has faced so many difficult challenges at once. What makes it worse
is we are facing them at a time when we are increasingly stretched militarily.
We are divided politically. We are stretched also economically, and there
is a good deal of anti-Americanism in the world. It’s a very bad combination…
“We have reached the point in Iraq where we’ve got to get real…this is
not going to be a near term success for American foreign policy. The Iraq
situation is not winnable in any meaningful sense. So what we need to do
now is look for a way to limit the losses and costs…”
The Iraq Study Group (IRG), both of whose leaders, James A. Baker III and
Lee Hamilton are current members of the CFR, suggests how to limit the
losses and costs by advocating a slow de-escalation in Iraq and training
a “new” Iraqi army to take over. Not at all eschewing long-term U.S. domination
of Iraq and its wealth of oil, the ISG envisions keeping at least 70,000
U.S. troops in Iraq for the long-term. The ISG recommended the privatization
of Iraq’s oil wealth, giving U.S. oil corporations a “piece of the action,”
something being currently planned by the U.S. occupation and its compliant
Iraqi “government” in Baghdad.
The February 2007 CFR report After the Surge: The Case for US Military
Disengagement from Iraq, was written by Steven Simon, a CFR Senior Fellow
for Middle East Studies. Simon argued that “some disasters are irretrievable,”
and “the United States has already achieved all that it is likely to achieve
in Iraq…. Staying…can only drive up the price…in blood, treasure and strategic
position.” Simon also critiques those who have “illusions that there are
unexplored or magic fixes, whether diplomatic or military.” Since the “crisis
has now moved beyond the capacity of Washington to control on its own…”
the U.S. should withdraw by the end of 2008. He concludes that it is “better
to withdraw as a coherent and somewhat volitional act than withdraw later
in hectic response to public opposition to the war in the United States.”
Simon also believes that the Iraq war has prevented the U.S. from devoting
proper attention to Afghanistan, which may lead to its “loss” as well.
U.S. Policy Toward Iran
The AEI approach to handling the U.S.-Iran competition for influence in
the Middle East is to militarily attack Iran. As journalist Ewen MacAskill
recently wrote in the British newspaper the Guardian: “Neo-conservatives,
particularly at the Washington-based American Enterprise Institute, are
urging Mr. Bush to open a new front against Iran. So too is the vice-president
Dick Cheney. The State Department and the Pentagon are opposed, as are
Democratic congresspeople and the overwhelming majority of Republicans.
The sources said Mr. Bush had not yet made a decision. The Bush administration
insists the military build-up is not offensive but aimed at containing
Iran and forcing it to make diplomatic concessions. The aim is to persuade
Tehran to curb its suspect nuclear weapons programme and abandon ambitions
for regional expansion.”
Some of the AEI “scholars” are adamant about the necessity of aggressive
war. Joshua Muravchik, an AEI “resident scholar,” wrote the following words
under the heading “Bomb Iran” for an op-ed piece which was published in
the Los Angeles Times on November 19, 2006: “WE MUST bomb Iran. It has
been four years since that country’s secret nuclear program was brought
to light, and the path of diplomacy and sanctions has led nowhere. Our
options therefore are narrowed to two: We can prepare to live with a nuclear-armed
Iran, or we can use force to prevent it. Former ABC news anchor Ted Koppel
argues for the former, saying that “if Iran is bound and determined to
have nuclear weapons, let it.” We should rely, he says, on the threat of
retaliation to keep Iran from using its bomb. Similarly, Newsweek International
editor Fareed Zakaria points out that we have succeeded in deterring other
hostile nuclear states, such as the Soviet Union and China….
“But that’s whistling past the graveyard. The reality is that we cannot
live safely with a nuclear-armed Iran. One reason is terrorism…. How could
we possibly trust Iran not to slip nuclear material to terrorists?
“…another reason is that an Iranian bomb would constitute a dire threat
to Israel’s 6 million-plus citizens…. And then there is a consequence that
seems to have been thought about much less but could be the most harmful
of all: Tehran could achieve its goal of regional supremacy…
“The only way to forestall these frightening developments is by the use
of force. Not by invading Iran as we did Iraq, but by an air campaign against
Tehran’s nuclear facilities. We have considerable information about these
facilities; by some estimates they comprise about 1,500 targets. If we
hit a large fraction of them in a bombing campaign that might last from
a few days to a couple of weeks, we would inflict severe damage. This would
not end Iran’s weapons program, but it would certainly delay it…
“…wouldn’t such a U.S. air attack on Iran inflame global anti-Americanism?
Wouldn’t Iran retaliate in Iraq or by terrorism? Yes, probably. That is
the price we would pay. But the alternative is worse.”
Former CIA Middle East specialist Reuel Marc Gerecht, an AEI resident fellow,
(who predicted in 2002 that a U.S. invasion of Iraq would have a positive
and democratic “transformative” effect on both Iraq and Iran), also concluded
in 2006 that the U.S. will probably need to go to war with Iran: “Given
the Islamic Republic’s dark history, the burden of proof ought to be on
those who favor accommodating a nuclear Iran. Those who are unwilling to
accommodate it, however, need to be honest and admit that diplomacy and
sanctions and covert operations probably won’t succeed, and that we may
have to fight a war—perhaps sooner rather than later—to stop such evil
men from obtaining the worst weapons we know.”
Michael Rubin, another AEI resident scholar also supports regime change
in Iran. In a Time magazine interview in 2006 he also argued against negotiations
with Iran, stating that: “The very act of sitting down with them recognizes
them.” Two other AEI operatives also have recently weighed in on this issue.
Newt Gingrich went so far as to say recently that the Bush administration
was practicing a “form of appeasement” by talking to Iran and North Korea,
and John Bolton said this makes the U.S. “appear weak.”
Finally, the war hawks at the AEI even created, in November 2006, an “Iran
Enterprise Institute,” a privately funded nonprofit. This “Iran Enterprise
Institute” is directed by Amir Abbas Fakhravar, an Iranian dissident living
in the United States. Fakhravar’s cause has been promoted by former Pentagon
adviser and AEI fellow Richard Perle. The likely purpose is to train Iranian
exiles to be ready to take over ruling Iran after the United States has
successfully instituted regime change.
The dominant position within the CFR is much different than the clear warmongering
of the AEI. In 2004 an “Independent Task Force,” sponsored by the CFR,
advocated a “revised strategic approach to Iran.” This task force had as
its co-chairs Zbigniew Brzezinski, National Security Adviser to President
Carter, and Robert M. Gates, the current Secretary of Defense. The task
force members concluded that Iran was not on the verge of another revolution
and so the U.S. should adopt a policy of limited and selective engagement
and dialogue to try to address critical U.S. concerns. The task force report
pointed out that similar discussions had been surprisingly helpful with
the former Soviet Union and China in the past. Incentives, not just punitive
measures, were therefore recommended in the current situation. The approach
of this task force was reinforced by CFR President Richard N. Haass in
a recent article in Newsweek. Arguing that the U.S. war in Iraq had created
a “tectonic geopolitical shift in the region,” ending the American era
in the Middle East, Haass concluded that: “More and more, Iran will emerge
as a player, a classic imperial power with ambitions to remake the region
in its image and the capabilities to potentially translate its objectives
into reality…military strikes (on Iran) would be dangerous, diplomacy is
the best option.”
In a November 2006 newspaper interview Haass stated his view on negotiations
as follows: “In the case of Iran and North Korea, I would be willing to
have the United States engage in diplomacy directly with them, essentially
offering them whatever mix of political and economic and security benefits
in exchange for demanding a package of behavior changes. We need to get
away from the idea that diplomatic interaction is a value judgment. History
suggests that isolation reinforces hardliners.”
Ray Takeyh, a CFR Senior Fellow for Middle East Studies, takes the Haass
conclusion even further in a recent Foreign Affairs article, arguing that
the U.S. has no realistic military option and a policy of “détente” with
Iran could yield many benefits, just as it did in dealings with the USSR
and China: “To tame the growing power of Iran, Washington must eschew military
options, the prospect of conditional talks, and attempts to contain the
regime. Instead, it should adopt a new policy of détente. By offering the
pragmatists in Tehran a chance to resume diplomatic and economic relations
with the United States, it could help them sideline the radicals and tip
Iran’s internal balance of power in their favor.”
Whither Current U.S. Foreign Policy?
It is unclear which main faction of the ruling class as represented by
the AEI and CFR, will win the struggle for future U.S. foreign policy.
So far, the AEI has won on military escalation in Iraq and a strong U.S.
naval armada has been assembled off of Iran, a force which could launch
a serious bombing campaign against that country the moment President Bush
gives the order. On the other hand, Bush administration representatives,
fresh from a nuclear agreement with North Korea, will reportedly meet soon
with Iranian and other officials from neighboring nations in Baghdad. A
Democrat-controlled Congress, stimulated by ruling class and other defections
from the Republican consensus, is weakly indicating that Congressional
approval should be required for an attack on Iran. Congressional backbone
has been notoriously absent in recent years, however, so it is unclear
what, if anything, they will do to either restrain this president or follow
the needs and wishes of the majority of the American people.
One general characteristic of ruling class thinking, both within the AEI
and CFR, is a frequent underestimation of the rebellion capabilities of
the larger population, at home and, more especially, in other countries.
This rebellion has been the main reason for the defeat, so far at least,
of U.S. plans for exploiting Iraq and its oil wealth. The CFR, at least,
appears to have learned from this defeat, and perhaps is willing to pursue
a new and somewhat more enlightened course in regard to both Iraq and Iran.
But the CFR still wants to control Iraq using different tactics. It has
a long history of support for imperialistic actions and an overlapping
membership with the even more aggressively imperialistic AEI. Therefore,
in the end, there is no substitute for the varied activities of people’s
movements to prevent the worst outcomes from occurring. The AEI and CFR
and the larger ruling class will sometimes battle each other and sometimes
agree on what joint policies to follow. It is ultimately up to working
class people to help decide, through their direct actions, or lack of them,
what the outcome will be.
Laurence H. Shoup has taught U.S. history at a number of universities and
written three books, including Imperial Brain Trust: The Council on Foreign
Relations and U.S. Foreign Policy (with William Minter), first published
by Monthly Review Press in 1977, reprinted by iUniverse in 2004.