The fall of the Soviet Union ended the European epoch, the period in which European power dominated the world. It left the United States as the only global power, something for which it was culturally and institutionally unprepared. Since the end of World War II, the United States had defined its foreign policy in terms of its confrontation with the Soviet Union. Virtually everything it did around the world in some fashion related to this confrontation. The fall of the Soviet Union simultaneously freed the United States from a dangerous confrontation and eliminated the focus of its foreign policy.

In the course of a century, the United States had gone from marginal to world power. It had waged war or Cold War from 1917 until 1991, with roughly 20 years of peace between the two wars dominated by the Great Depression and numerous interventions in Latin America. Accordingly, the 20th century was a time of conflict and crisis for the United States. It entered the century without well-developed governmental institutions for managing its foreign policy. It built its foreign policy apparatus to deal with war and the threat of war; the sudden absence of an adversary inevitably left the United States off balance.

After the Cold War

The post-Cold War period can be divided into three parts. A simultaneous optimism and uncertainty marked the first, which lasted from 1992 until 2001. On one hand, the fall of the Soviet Union promised a period in which economic development supplanted war. On the other, American institutions were born in battle, so to speak, so transforming them for a time of apparently extended peace was not easy. Presidents George H.W. Bush and Bill Clinton both pursued a policy built around economic growth, with periodic and not fully predictable military interventions in places such as Panama, Somalia, Haiti and Kosovo.

These interventions were not seen as critical to US national security. In some cases, they were seen as solving a marginal problem, such as Panamanian dictator Manuel Noriega's drug trafficking. Alternatively, they were explained as primarily humanitarian missions. Some have sought a pattern or logic to these varied interventions; in fact, they were as random as they appeared, driven more by domestic politics and alliance pressures than any clear national purpose. US power was so overwhelming that these interventions cost relatively little and risked even less.

The period where indulgences could be tolerated ended on Sept. 11, 2001. At that point, the United States faced a situation congruent with its strategic culture. It had a real, if unconventional, enemy that posed a genuine threat to the homeland. The institutions built up during and after World War II could function again effectively. In an odd and tragic way, the United States was back in its comfort zone, fighting a war it saw as imposed on it.

The period from 2001 until about 2007 consisted of a series of wars in the Islamic world. Like all wars, they involved brilliant successes and abject failures. They can be judged one of two ways. First, if the wars were intended to prevent al Qaeda from ever attacking the United States again in the fashion of 9/11, they succeeded. Even if it is difficult to see how the war in Iraq meshes with this goal, all wars involve dubious operations; the measure of war is success. If, however, the purpose of these wars was to create a sphere of pro-US regimes, stable and emulating American values, they clearly failed.

By 2007 and the surge in Iraq, US foreign policy moved into its present phase. No longer was the primary goal to dominate the region. Rather, it was to withdraw from the region while attempting to sustain regimes able to defend themselves and not hostile to the United States. The withdrawal from Iraq did not achieve this goal; the withdrawal from Afghanistan probably will not either. Having withdrawn from Iraq, the United States will withdraw from Afghanistan regardless of the aftermath. The United States will not end its involvement in the region, and the primary goal of defeating al Qaeda will no longer be the centerpiece.

President Barack Obama continued the strategy his predecessor, George W. Bush, set in Iraq after 2007. While Obama increased forces beyond what Bush did in Afghanistan, he nevertheless accepted the concept of a surge -- the increase of forces designed to facilitate withdrawal. For Obama, the core strategic problem was not the wars but rather the problem of the 1990s -- namely, how to accommodate the United States and its institutions to a world without major enemies.

The Failure of Reset

The reset button Hillary Clinton gave to the Russians symbolized Obama's strategy. Obama wanted to reset US foreign policy to the period before 9/11, a period when US interventions, although frequent, were minor and could be justified as humanitarian. Economic issues dominated the period, and the primary issue was managing prosperity. It also was a period in which US-European and US-Chinese relations fell into alignment, and when US-Russian relations were stable. Obama thus sought a return to a period when the international system was stable, pro-American and prosperous. While understandable from an American point of view, Russia, for example, considers the 1990s an unmitigated disaster to which it must never return.

The problem in this strategy was that it was impossible to reset the international system. The prosperity of the 1990s had turned into the difficulties of the post-2008 financial crisis. This obviously created preoccupations with managing the domestic economy, but as we saw in our first installment, the financial crisis redefined the way the rest of the world operated. The Europe, China and Russia of the 1990s no longer existed, and the Middle East had been transformed as well.

During the 1990s, it was possible to speak of Europe as a single entity with the expectation that European unity would intensify. That was no longer the case by 2010. The European financial crisis had torn apart the unity that had existed in the 1990s, putting European institutions under intense pressure along with trans-Atlantic institutions such as NATO. In many ways, the United States was irrelevant to the issues the European Union faced. The Europeans might have wanted money from the Americans, but they did not want 1990s-style leadership.

China had also changed. Unease about the state of its economy had replaced the self-confidence of the elite that had dominated during the 1990s in China. Its exports were under heavy pressure, and concerns about social stability had increased. China also had become increasingly repressive and hostile, at least rhetorically, in its foreign policy.

In the Middle East, there was little receptivity to Obama's public diplomacy. In practical terms, the expansion of Iranian power was substantial. Given Israeli fears over Iranian nuclear weapons, Obama found himself walking a fine line between possible conflict with Iran and allowing events to take their own course.

Limiting Intervention

This emerged as the foundation of US foreign policy. Where previously the United States saw itself as having an imperative to try to manage events, Obama clearly saw that as a problem. As seen in this strategy, the United States has limited resources that have been overly strained during the wars. Rather than attempting to manage foreign events, Obama is shifting US strategy toward limiting intervention and allowing events to proceed on their own.

Strategy in Europe clearly reflects this. Washington has avoided any attempt to lead the Europeans to a solution even though the United States has provided massive assistance via the Federal Reserve. This strategy is designed to stabilize rather than to manage. With the Russians, who clearly have reached a point of self-confidence, the failure of an attempt to reset relations resulted in a withdrawal of US focus and attention in the Russian periphery and a willingness by Washington to stand by and allow the Russians to evolve as they will. Similarly, whatever the rhetoric of China and US discussions of redeployment to deal with the Chinese threat, US policy remains passive and accepting.

It is in Iran that we see this most clearly. Apart from nuclear weapons, Iran is becoming a major regional power with a substantial sphere of influence. Rather than attempt to block the Iranians directly, the United States has chosen to stand by and allow the game to play out, making it clear to the Israelis that it prefers diplomacy over military action, which in practical terms means allowing events to take their own course.

This is not necessarily a foolish policy. The entire notion of the balance of power is built on the assumption that regional challengers confront regional opponents who will counterbalance them. Balance-of-power theory assumes the leading power intervenes only when an imbalance occurs. Since no intervention is practical in China, Europe or Russia, a degree of passivity makes sense. In the case of Iran, where military action against its conventional forces is difficult and against its nuclear facilities risky, the same logic applies.

In this strategy, Obama has not returned to the 1990s. Rather, he is attempting to stake out new ground. It is not isolationism in its classic sense, as the United States is now the only global power. He appears to be engineering a new strategy, acknowledging that many outcomes in most of the world are acceptable to the United States and that no one outcome is inherently superior or possible to achieve. The US interest lies in resuming its own prosperity; the arrangements the rest of the world makes are, within very broad limits, acceptable.

Put differently, unable to return US foreign policy to the 1990s and unwilling and unable to continue the post-9/11 strategy, Obama is pursuing a policy of acquiescence. He is decreasing the use of military force and, having limited economic leverage, allowing the system to evolve on its own.

Implicit in this strategy is the existence of overwhelming military force, particularly naval power.

Europe is not manageable through military force, and it poses the most serious long-term threat. As Europe frays, Germany's interests may be better served in a relationship with Russia. Germany needs Russian energy, and Russia needs German technology. Neither is happy with American power, and together they may limit it. Indeed, an entente between Germany and Russia was a founding fear of US foreign policy from World War I until the Cold War. This is the only combination that could conceivably threaten the United States.

The American counter here is to support Poland, which physically divides the two, along with other key allies in Europe, and the United States is doing this with a high degree of caution.

China is highly vulnerable to naval force because of the configuration of its coastal waters, which provides choke points for access to its shores. The ultimate Chinese fear is an American blockade, which the weak Chinese navy would be unable to counter, but this is a distant fear. Still, it is the ultimate American advantage.

Russia's vulnerability lies in the ability of its former fellow members of the Soviet Union, which it is trying to organize into a Eurasian Union, to undermine its post-Soviet agenda. The United States has not interfered in this process significantly, but it has economic incentives and covert influence it could use to undermine or at least challenge Russia. Russia is aware of these capabilities and that the United States has not yet used them.

The same strategy is in place with Iran. Sanctions on Iran are unlikely to work, as they are too porous and China and Russia will not honor them. Still, the United States pursues them not for what they will achieve but for what they will avoid -- namely, direct action. The assumption underlying US quiescence, rhetoric aside, is that regional forces, the Turks in particular, will be forced to deal with the Iranians themselves, and that patience will allow a balance of power to emerge.

The Risks of Inaction

US strategy under Obama is classic in the sense that it allows the system to evolve as it will, thereby allowing the United States to reduce its efforts. On the other hand, US military power is sufficient that should the situation evolve unsatisfactorily, intervention and reversal is still possible. Obama has to fight the foreign policy establishment, particularly the US Defense Department and intelligence community, to resist older temptations. He is trying to rebuild the foreign policy architecture away from the World War II-Cold War model, and that takes time.

The weakness in Obama's strategy is that the situation in many regions could suddenly and unexpectedly move in undesirable directions. Unlike the Cold War system, which tended to react too soon to problems, it is not clear that the current system won't take too long to react. Strategies create psychological frameworks that in turn shape decisions, and Obama has created a situation wherein the United States may not react quickly enough if the passive approach were to collapse suddenly.

It is difficult to see the current strategy as a permanent model. Before balances of power are created, great powers must ensure that a balance is possible. In Europe, within China, against Russia and in the Persian Gulf, it is not clear what the balance consists of. It is not obvious that the regional balance will contain emerging powers. Therefore, this is not a classic balance-of-power strategy. Rather it is an ad hoc strategy imposed by the financial crisis and its impact on psychology and by war-weariness. These issues cannot be ignored, but they do not provide a stable foundation for a long-term policy, which will likely replace the one Obama is pursuing now.

(Courtesy www.stratfor.com)