Summer 2024 Essays (2 of 11): Pragmatism

So this is how I am spending my summer vacation: daily reviews of essays from the current edition of Foreign Affairs as the United States barrels towards the most consequential election in decades, with US global leadership very much on the line.? Looking forward to the conversations this may spark.

Corporate leaders cannot escape the strategic inflection point that geopolitical tensions and shifting political priorities are creating for the business community.? As of last week, every member of the G7 except Italy faces electoral upheaval between now and October 2025.? Elections have many kinds of consequences. The current crop of campaigning and voting makes clear that significant voters are demanding significant shifts in direction.? Consider the outcomes so far in 2024:

• The European Union parliamentary elections swung right, powered in part by populist anti-green voter wrath;
• The UK parliamentary elections swung left;
• The French parliamentary elections threatened to swing right before returning an inconclusive outcome as the left staged a come-from-behind surge;
• The outcomes this year (United States) and next year (Japan, Canada) are not yet clear but in all cases the electorates are deeply divided and increasingly polarized.

The United States adds to the mix with a flurry of Supreme Court cases in late June and early July that ensure whoever loses the Presidential election will have powerful tools to question government actions in the courts.

Corporate leaders must make decisions about workforce hiring, capital investment, and project management with growing uncertainty about the medium-term availability of green subsidies, funding for defense industry projects, and input price volatility triggered by sharp tariff increases and potential trade wars.

No wonder so many illustrious foreign policy figures find it challenging to articulate a new, and durable, value proposition to support a continued strong role for the United States on the global stage.? Enter Walter Russell Mead and his essay in Foreign Affairs.

Professor Mead picks up where Secretary Rice left off, articulating a value proposition for robust US engagement internationally using the forgotten founding father (until Lin Manuel-Miranda discovered him) that both parties still manage to revere.? He observes that “the growing trend toward the use of subsidies and trade restrictions to promote climate goals increases the degree to which government decisions drive private-sector investment decisions and affect the profitability of businesses around the world.? Never has the strength of the state been so closely tied to the dynamism of the corporate world.? This connection operates most strongly at the most advanced levels of tech and production: the information-finance-business-government complex is increasingly necessary to the prosperity and security of the American state and people.”

He then spends the next 9 pages making the case for a value proposition that straddles ideological lines based on a commitment to pragmatic statecraft.? A major difference exists between statecraft and diplomacy. Diplomacy involves advocacy on the international stage; it is the art of finding alignment of interests and influencing outcomes consistent with the national interest.? Statecraft, instead, is all about strategy.

Professor Mead makes the case for the kind of policy pragmatism that has periodically served the United States well since 1789. He argues that an unabashedly American set of policy priorities should be neither jingoistic nor idealistic.? But the essay glosses over the fact that the political center – which usually could be counted on to support pragmatic policies – is rapidly disappearing in the United States and elsewhere.

It is very true that many of the largest and most technologically advanced companies on the planet are American companies whose business prospects will be adversely impacted by trade wars, regulatory constraints abroad based on their US headquarters, and potentially shrinking subsidies.? But these companies have highly skilled advocates capable of crafting policy outcomes that deliver the least worst impact no matter who wins the election.?

The largest impact from policy shifts instead will fall on small- and medium-sized companies without the capacity to acquire appropriate representation in Washington (and London, and Brussels, and Singapore, and Sao Paolo).? These firms are often where innovation thrives; these firms are where innovation dies without access to funding, foreign markets, and a workforce that includes experts in navigating regulatory policy thickets.? These firms often lack the resources to track policy shifts as they materialize, so they have a hard time positioning strategically for near-term challenges and opportunities.

Promoting a pragmatic foreign policy value proposition provides a potential middle ground that avoids the twin perils of isolationism and democracy promotion.? Business leaders must be pragmatic on a daily basis, in addition to being visionary leaders and strong team captains.? The ideas may resonate with many.? The political rhetoric among those running for office at present does not, however, echo the perspectives articulated in this essay.?

Corporate leaders seeking to anticipate policy trajectories will need a keen ear for rhetoric and a sharp eye for technical details (because policymakers do not always do what they say) if they are to navigate the next few years in ways that deliver value for their teams, their customers and their shareholders.

Prof. Mead’s essay merits a close read as summer draws to a close. ??

Barbara C. Matthews is a globally recognized public policy and quantitative finance leader.? Her track record of successful innovation and leadership spans five continents in both the private and public sectors, including service as the first US Treasury Attache to the EU with the Senate-confirmed diplomatic rank of Minister-Counselor.? She has consistently been the first executive to forge new paths that add lasting value with durable, high-performing teams. ?She is the Founder and CEO of BCMstrategy, Inc., a company that delivers ML/AI training data and predictive analytics that provide ground-breaking transparency and metrics about government policy globally.? The company uses award-winning, patented technology to measure public policy risks and anticipate related reaction functions. Ms. Matthews is the author of the patent.