National success requires achieving both continuity and economies of scale. Those big enough to have economies of scale rarely have good borders – think Russia. Those sufficiently isolated to have long continuities rarely have scale – think New Zealand.

The Americans have changed their mind about their alliance and have turned sharply more insular. There is no effort to ride herd. The W Bush administration abused the allies, the Obama administration ignored the allies, and the Trump administration insulted the allies. 

Below is a long, quoted passage where Zeihan lays out his perspective that America has merely drifted since the conclusion of the Cold War, bereft of leadership with vision.

The Cold War victors had a bit of a party, and then something curious occurred.

The American policy of global Order was a strategic one, designed as a means of doing battle in a global conflict. With the Cold War over, it was time to rejigger that Order toward a new goal.

With the Soviet fall, American president George HW Bush sensed history calling. He used his unprecedented popularity in the aftermath of the fall of the Berlin Wall and victory in the First Iraq War to launch a national conversation on what’s next. What do the American people want out of this new world? He openly discussed a New World Order, his personal goal being “a thousand points of light,” a community of free nations striving to better the human condition. Bush’s background-he had previously served as vice president, budget chief, party chief, ambassador, House representative, and intelligence guru-made him the right person with the right skill set and the right connections and the right disposition in the right place in the right job at the right time. 

So of course the Americans voted him out of office, and all serious talk of moving the Order onto newer footing for the new age, more relevant for the challenges and opportunities of the post-Cold War era, ceased.

American leadership in the years since has been, in a word, underwhelming. Bill Clinton found foreign policy boring and did his best to avoid it. George W Bush became embroiled exclusively in the Middle East. Barack Obama proved so insular he refused to have meetings with, well, anyone-even allies within his own Democratic Party. Donald Trump’s “America First” expressly calls for divorce from the global system.

None of the four picked up the challenge of George HW Bush to reform the Order and build a better world. Nor did any of the four provide the necessary guidance to American military, intelligence, and diplomatic staff as what America’s goals actually are.

With no clear grand strategy, the Americans lurched from crisis to crisis – Haiti to Bosnia to Yugoslavia to Afghanistan to Iraq to Yemen to Syria-with the country’s political, economic, and military elite seeing power as something to be used in an endless march of tactical situations, rather than a tool for shaping the broader picture. For a mix of reasons political, personal, and institutional, there has been a lack of imagination all around.

Bereft of direction from the top, American strategic policy slipped into a thought-free rut. The US Navy continued to provide global maritime security. The American military continued to protect Cold War allies. The American economic system continued to be a sink for global exports. The American system continued to enable all the nuts and bolts of global energy and finance and agriculture and manufacturing. 

The only change was the Americans stopped asking for anything in return. 

The Order had been so successful, most forgot – or never learned – that it was even there in the first place.

^I certainly never learned. What I learned was globalization as a secular, disembodied, unstoppable, inevitable, righteous force. While America accelerated globalization by providing stability, to some degree globalization would have occurred due to transport technology and the internet even without the added insurance of geopolitical security. Zeihan doesn’t like to admit this.

But the ever-more-wealthy ever-more-connected, ever-more-advanced world lost sight of one central, inconvenient truth: American involvement in the Order isn’t about-was never about-free trade and its subsequent effects as an end. Free trade was the means. Free trade was part of the bribe. […] The Americans forged, operated, and subsidized the free trade Order so that they would have allies to help face down the Soviets. […] With the Order’s strategic rationale gone, the Order has had to justify its continuing existence to the Americans. It has not gone well.

At the time of this writing (2019/2020), the Americans now have fewer troops stationed abroad than at any time since the great depression. 

Chinese GDP has expanded by a factor of 4.5 since 2000, but Chinese credit has expanded by a factor of 24. Total debt in China has ballooned to more than triple the size of the entire economy. According to Citigroup,  some 80 percent of freshly issued private credit in 2018 globally is in China, while the Conference Board estimates productivity growth (how much you get from what you put in) has declined since 2012. The Economist now estimates three-quarters of the value of new loans does nothing more than pay the interest of loans issued previously. China is spending more and more to get less and less, and it has already resulted in the greatest debt run-up in history. 

The rest of the world has seen-repeatedly-where this sort of expansion-at-all-costs development model leads: investment-led bubbles that collapse into depressions. In Japan, it resulted in three lost decades of inflation and near-zero growth. In Greece and Italy, the bubbles generated what are (so far) the largest sovereign debt and banking crises in history. In the United States, runaway lending created Enron and the subprime lending crisis.

I take speculation about how much debt is “too much” with a huge grain of salt after reading some of Ray Dalio’s work, especially when the debt is denominated in the country’s own currency. Nevertheless, it’s interesting to hear someone so bearish on China these days.

One downside of China’s massive population is that the country has less farmland per person than Saudi Arabia. 

In one fell swoop, the Americans provided the Japanese with everything Japan had fought for-and ultimately lost-between 1870 and 1945. A position under the American nuclear umbrella was tossed in as a cringe-inducing bonus.

That passage was cringe-inducing but I love that the author was willing to go there.

The first issue is the looming iceberg of Japan’s demographic implosion. The niggardly amount of flatland in Japan that has so shaped the country’s political, agricultural, industrial, and technological history has similarly shaped Japan’s demographic structure.

Once one filters out countries that aren’t really countries (think Monaco) and takes into account the fact that over 80% of Japan’s land is uninhabitable, Japan is the world’s most densely populated and fifth most urbanized country. Cramming everyone into tiny urban condos generates some amazing economies of scale and wonderfully efficient city services, but it makes it damnably difficult to raise children. 

Japan is approaching the worker shortage of the twenty-first century in the same way it approached its higher cost structures in the late nineteenth and early twentieth – by being more advanced. Japan is the most technologically advanced society humanity has ever produced, and it continues to push the limits of what humans consider possible.

I found this a little too dismissive of the demographic trend.

In these scenarios China doesn’t so much stew in its own juices as boil in its own blood, and that is before the Communist Party has to make any decisions about how violent it might be in its efforts to preserve a unified China. The last thing on the Chinese mind will be venturing out into the wider, more dangerous world.

Chinese power will dissolve and China itself will likely break up as well, but China has never been a global player – in fact it has rarely even exercised power beyond its current borders. China’s degradation is simply a reversion to the mean. 

Zeihan is so incredibly contrarian on China it boggles the mind.

Fascinating geographic factoid:

Russian rivers are so useless as to be largely cosmetic. Those that are navigable tend to flow through useless terrain on their way to emptying into remote, unpopulated seas. Most of them flow north, which sounds innocent until one factors in Russia’s trademark harsh winters. 

South flowing rivers in the Northern Hemisphere freeze from their headwaters to their mouths. Snow and ice in the river’s upper reaches do not flow into the river until spring, so during winter the river’s level drops considerably. 

In contrast, north-flowing rivers freeze from their mouths to their headwaters, meaning the upriver flows do not necessarily drop, but they flow into a frozen river. […] Eventually the ice accumulates to the point that it forms an ice dam, which forces the semi frozen water up and over the banks. […] If you’re watching from satellite, this entire process is fascinating. If you’re watching from the river banks, you’re dead.

Death rates for Russian males between 15 and 29 were over six times those of the Iraqi men during the American occupation and subsequent civil war.

I wonder what the death rates were for men in prior Empires that disintegrated rapidly? Is it all economics or is a significant part of it soul – loss of status and humiliation?

For countries like Greece, who were burning cash like a Saudi prince on Instagram, reality hit hard – and it brought receipts. 

In many ways, the French system takes the two types of racism most prevalent in the United States and applies the worst of both. In the American South, racism takes the form of, “We will mingle, but we are not equal.” In the American North, it is in the vein of, “We are equal, but we will not mingle.” In France, the targets of racism are out of sight and out of mind, consigned to ghettos and at the back of the line as regards government services. 

Since World War II, the Middle East’s population has sextupled, putting it far beyond the region’s meager carrying capacity. Anything that disrupts oil flows disrupts income disrupts food supply. 

After Brazil broke away from the Empire in 1822, independent Brazil did not simply continue the practice; Brazil expanded it. Best guess is some 4.9 million Africans were sold into Brazilian slavery-more than half the global total. So dependent was Brazil that it did not criminalize slavery until 1888, making it the last country in the hemisphere to do so. 

Typical high school American education makes slavery seem almost uniquely American. I didn’t realize Brazil was the biggest sinner in the Western Hemisphere in this domain.

Different geographic and economic features necessitated a different sort of immigrant. In proto- and early America, the limiting factor wasn’t transport or capital, but labor. A horde of hale and hearty immigrants with can-do attitudes (plus a sprinkling of criminals who were not allowed to return to Britain, backed by a far from insignificant number of slaves) fit the bill perfectly. In contrast, the Spanish New World desperately needed capital, and so attracted a cut above: the wealthy, especially those willing to relocate for a shiny new business opportunity. […] Smallholders of the American style were largely unheard of; there is no Spanish version of Little House on the Prairie.

American power is both huge and insulated. Until the rise of the Soviet threat forced the bipartisan unity of the Order, American policy varied with the political passions of the day. Now, with the Order’s end, the United States returns to a more “normal” strategically unfettered state. Predicting French or Turkish or Argentine actions is child’s play compared with guessing what the Americans will do now that they are freed from concerns of context and consequence.

That forces us to do something most students of geography loathe: dive into what actually will guide American foreign policy for the next decade or so. It is time to dissect American domestic politics. 

America’s political parties are both stable and weak. They’re stable in that, once a coalition of factions is formed under the umbrella of a party, that party tends to stick around for decades. Each faction’s power can ebb and flow within the party coalitions without disrupting the overall political system. They’re weak in that each faction has its own ideas about what the party should be about, and corralling the factions behind any specific goal requires a great deal of legwork.

America’s two established parties in 2020 are in a state of flux. Factions are not simply rising and falling within the existing parties, but even jumping party affiliation.

The Republican Party is broadly an alliance of six groups: the business community, national-security conservatives, fiscal-primacy supporters, evangelicals, pro-life voters and populists.

The populists have always been the crazy uncle of the Republican alliance, and the other factions have tolerated them only because the populists were wildly disorganized and so provided a vote bank without ever really being able to shape the Republican agenda.

The populist’s previous disorganization meant the rest of the Republican coalition didn’t really have a grip on what the populists were after in terms of policy. Now with the populists calling the shots, the rest of the old Republican coalition is somewhat gobsmacked. The populists’ position on social programs alienates the fiscal conservatives. Their views on national-security policy infuriate the military and intelligence communities. Their immigration goals split the evangelical community down the center. And their thinking about finance and regulations has banished the business community into the wilderness. With the exception of the pro-life voters, the old Republican coalition is completely shattered.

“You can always count on the Americans to do the right thing, after exhausting all other options.” – Churchill

Even more notable is what has happened with the US Navy. Relentless modernization and drawdowns reduced the number of vessels by half even as the number of carriers increased. That forced a concentration of the remaining vessels around the all-important carriers. (Even when not expecting combat, each carrier typically has a dozen escorts.) The Cold War-era Navy of 550-plus ships could fairly reasonably disperse to provide global coverage. Not so in 2020, when the Americans’ naval vessels total fewer than 300 – nearly one-third of which compose the concentrated forces of the carrier battle groups.

Israel may become defined by attributes that are normally associated with pariah states, but without American leadership, international institutions like the United Nations are not likely to continue anyway. Being a pariah doesn’t mean what it used to.

Few recognize just how beneficial and transformative the global Order has been to the world writ large, much less their personal lives.

The Order’s impact has been deep and pervasive, so singularly effective that it suffused itself into every aspect of human existence, nearly erasing every previous structure. Its absence will not be merely non-Order, but instead a new kind of chaos. In the Imperial Age when people were miserable, they were just the same kind of miserable they had always been. But in the Disorder the sense of achievements lost will be palpable. People will remember a degree of security and wealth that they will never be able to achieve on their own. 

The Americans are not so much passing the torch as dropping it. 

The “America First” of the hard right is reflexively hostile to the world. The “America First” of the hard left is reflexively hostile to American involvement in the world. The “America First” of the middle just finds the world exhausting. 

Zeihan has the most unusual and entertaining Acknowledgements section I’ve ever seen. He defends not really citing sources for facts and then describes in prose the sources he found most influential.

I am not a journalist. Journalism is about reporting facts and statements and events, so the criticality of citations is burned into the souls of all good reporters. In contrast, my background is in private intelligence work. Back in the day it was less my job to uncover facts or tell someone’s story, or even to pore over and make sense of a specific region or sector, but instead to weave disparate information flows from every part of the world into a tapestry that demonstrates linkages across systems.

There are some exceptions of course – counter-acknowledgements, if you will: Eurostat and Statistics Canada. Such great data. Such horrible interfaces.Why do you make data mining so painful? And, of course, Russia’s Rosstat. I am hugely thankful for your work. Not for your data, of course. Most of it is absolute crap. Fabricated carp to support the Kremlin’s renewed propaganda campaigns. But, wow, you always good for a laugh!

Peter is a character.

—

Peter Zeihan is a geopolitical strategist with contrarian perspectives grounded in geographic, demographic, and militaristic insights. I first learned of him on Invest Like the Best Podcast by James O’Shaughnessy while hiking the John Muir Trail. His articulate breadth and depth of knowledge compelled me to read his book. Refreshing views but must be taken with some skepticism.

Criticisms: (1) Downplaying how much nukes have changed the territorial security equation. The focus on navies and shipping security is fascinating, but the focus on armies seems dated. (2) Ignoring the impact of culture entirely. (3) Treating demographics (birth rates) as a death knell in some contexts but totally manageable in others (example: Germany vs Japan). (4) Focusing heavily on disruptive technology when looking to the past but not to the future.

I first discovered Kishore on the Sinica Podcast (highly recommended). His eloquence and sharp takes on America and China inspired me to read some of his work. Being from Singapore, a country born of Chinese and British influences, Kishore provides a balanced (or at least, a fresh) view on Sino-Western relations. I enjoyed his constructive criticism of modern Western civilization. Quotes and notes below.

Initially – indeed, for centuries – the West used its military and technological prowess to conquer and dominate the planet. Modern science and technology were harnessed to create powerful weapons. By the end of the nineteenth century, Western power had exploded into every part of the planet. Virtually every society on Earth – including the two previously greatest economic powers, China and India (which had almost half of the world’s GDP in 1820) – was subjugated by the West. Every other human civilization had no choice but to bend before Western power. And this domination could have carried on for many more centuries if not for the two suicidal world wars which the Western powers indulged in in the first half of the twentieth century.

An interesting perspective on the World Wars of the prior century. I doubt Western domination would have carried on for centuries longer without the Wars but they certainly redistributed Western power amongst Western powers.

The giddy spirits of the West were ready to ingest any form of seductive opium. Conveniently, they found this in Francis Fukuyama’s famous essay ‘The End of History?’ In it, he boldly argued: ‘What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.’ Western rulers fell in love with his essay and began to believe that their societies had reached the top of the metaphorical Mount Everest of human development and would not be dislodged. Partly as result of imbibing Fukuyama’s opiate, triumphalists in the West didn’t notice that the end of the Cold War coincided with a more fundamental turn of human history, which triggered a new historical era rather than ending history. China and India – the two sleeping giants of Asia – were waking up.

Hubris.

In 1976, the West launched the G7 to bring together the world’s most powerful economies. Their share of the global GDP was 45.3 per cent in 1995. By contrast the share of the E7, the seven largest emerging economies, then was half that at 22.6 per cent. However, by 2015 their respective shares were 31.5% (G7) and 36.3% (E7). PWC has forecast that by 2050, the G7 share will slide to 20% and that of the E7 will have risen to almost 50% in purchasing power terms. Few periods of human history have seen such enormous changes in one lifetime. Sadly, no brave Western leader has emerged to speak honestly about them. This monumental shift of power away from the West will be uncomfortable for Western minds. Ignoring it will only mean delayed and more painful adjustments for Western societies.

The absence of these facts from the American conversation is frustrating. Acknowledging the tenuous position of America in a dynamic world order could really help unify Americans. Instead of looking out and around, Americans are currently focused on tearing each other down.

This ignorance about the extraordinary progress made by billions on our planet is aggravated by the global supremacy of Western media, which dominate global news and infect the world with prevailing Western pessimism.

Islam is not just getting more adherents. Muslims are getting more religious. Since the Western mind likes to extrapolate Western assumptions into the human condition, it assumes that the modernization and economic development of any society will lead to less religiousity and more secularism. In the Islamic world, the reverse is happening.

The West’s second major strategic flaw was to further humiliate the already humiliated Russia. Gorbachev’s unilateral dissolution of the Soviet empire was an unimaginable geopolitical gift to the West, especially America. The Russia that remained was a small shell of the Soviet empire. After winning the Cold War without firing a shot, it would have been wise for the heed Churchill’s advice: ‘In victory, magnanimity.’ Instead, the West did the exact opposite. Contrary to the implicit assurances given to Gorbachev and Soviet leaders in 1990, the West expanded NATO into previous Warsaw Pact countries, including the Czech Republic, Hungary, Poland, Bulgaria, Estonia, Latvia, Lithuania, Romania and Slovakia. Tom Friedman was dead right when he said, ‘I opposed expanding NATO toward Russia after the Cold War, when Russia was at its most democratic and least threatening. It remains one of the dumbest things we’ve ever done, and of course, laid the groundwork for Putin’s rise.’ The humiliation of Russia led to an evitable blowback. The Russian people elected a strongman ruler, Vladimir Putin to defend Russian interests strongly… They wanted a strongman ruler who could also poke the eyes of the West. He did this by invading Crimea and supporting Assad in Syria. There are no saints in geopolitical games. There is only tit for tat.

Few in the Rest are convinced that the West’s post-Cold War encouragement of democracy abroad represents a moral impulse. Instead, they see this as a last futile attempt to continue the two-century period of Western domination of world history by other means. They also notice the cynical promotion of democracy in adversarial countries like Iraq and Syria and not in friendly countries like Saudi Arabia.

Ouch. Right in the sense of moral superiority.

This reminded me of Trump’s defense of Putin in 2017 that also threw American moral superiority under the bus: “There are a lot of killers. You think our country’s so innocent?”

We need to build a new global consensus. The beautifully written Charter of the United Nations and the Universal Declaration of Human Rights, which espouse many noble universal values, can provide the foundation for the values of this new consensus.

Kishore was President of the United Nations Security Council for a period of time so he’s “pretty into” the UN. However, the Universal Declaration of Human Rights reads like the Declaration of Western Ideals to me. We have countries like Saudia Arabia cynically signing off on the Universal Declaration of Human Rights and ignoring half of it. Clearly ‘Human Rights’ aren’t really universal. The Universal Declaration strikes me as a move to install (noble) Western values as the international default. Kishore is great at pointing out Western hubris in many domains, but somehow he doesn’t consider the UN’s “Universal Declaration” an example of this.

In our rapidly changing world, the West need to learn more from Machiavelli and deploy more strategic cunning to protect its long-term interests. Strategic cunning is as old as the hills. Two thousand five hundred years ago, the legendary Chinese strategist Sun Tzu advised, ‘Know thy self, know thy enemy. A thousand battles, a thousand victories.’ The most difficult part of this piece of advice is ‘Know thy self.’ Few in the West are aware of how quickly the Western share of global power has shrunk.

The reality that the West has to deal with is that the primary strategic challenge for America is not the same as the primary strategic challenge for Europe. For America, it is China. For Europe, it is the Islamic world at its doorstep.

Africa’s population will become as large as Asia’s by 2100. Then there will be 4.5 billion people in Africa. How will an ageing population of 450 million Europeans deal with this demographic explosion?

The Islamic world is not America’s primary strategic challenge. It is a secondary challenge. Hence it should make peace with the Islamic world, not rile it.

The best way to transform Iranian society is to send thousands, if not millions, of American tourists to the country.

Brillant! I wouldn’t wish this on anyone.

In theory, China will win in the economic competition, because it has a much larger population: 1.37 billion, as opposed to America’s 321 million. Yet, America has outperformed every other economy in the world by being able to attract the best and brightest of the 7 billion people on Earth. This is why many of America’s greatest universities, schools and companies are led by American citizens born overseas. The H1B visa, which allows US companies to employ foreign nations in certain occupations, is part of America’s strategic answer to China’s population advantage. Yet it is precisely at the moment when America needs more H1B visas to deal with China’s economic competition that America is reducing the number of H1B visas.

America’s ‘strategic answer’, the ability to attract talent, is partly due to the flexible and inclusive identity structure in America. This, combined with freedom and financial incentives, is vital. Smart people can’t go to China and become a successful Chinese individual. Smart people can go to America and become a successful American. Ethnostates may have strength in cohesion but they’re not optimized to attract global talent.

The West is wrong believing that democracy is a necessary condition for economic success. If it were, China could not and should not have succeeded. But it has. This is also why many in the West deeply resent China’s success. It undermines many key pillars of Western ideology.

So what is the best outcome for America when it becomes number two? The best outcome would be a number one power (namely, China) that respects ‘rules and partnerships and habits of behavior’ that America could live with.

And would be the best way to slip on these ‘handcuffs’ […] on China? This is where Bill Clinton was cunning. He was advising his fellow Americans to slip the handcuffs of ‘rules and partnerships’ onto themselves. Once America had created a certain pattern of behavior for the world’s number one power, the same pattern of behavior would be inherited by the next number one power, namely China.

China, unlike America, does not have a messianic impulse to change the world. If order abroad facilitates order at home, China would be happy.