Just caught up wth this excellent essay in @ForeignAffairs by Stephen Kotkin: https://t.co/XxAqadRwvh— Niall Ferguson (@nfergus) August 12, 2018
Geopolitics didn’t return; it never went away. The arc of history bends toward delusion. Every hegemon thinks it is the last; all ages believe they will endure forever. In reality, of course, states rise, fall, and compete with one another along the way. And how they do so determines the world’s fate.Keep reading.
Now as ever, great-power politics will drive events, and international rivalries will be decided by the relative capacities of the competitors—their material and human capital and their ability to govern themselves and their foreign affairs effectively. That means the course of the coming century will largely be determined by how China and the United States manage their power resources and their relationship.
Just as the free-trading United Kingdom allowed its rival, imperial Germany, to grow strong, so the free-trading United States has done the same with China. It was not dangerous for the liberal hegemon to let authoritarian competitors gain ground, the logic ran, because challengers would necessarily face a stark choice: remain authoritarian and stagnate or liberalize to continue to grow. Either way, the hegemon would be fine. It didn’t end well the first time and is looking questionable this time, too.
China will soon have an economy substantially larger than that of the United States. It has not democratized yet, nor will it anytime soon, because communism’s institutional setup does not allow for successful democratization. But authoritarianism has not meant stagnation, because Chinese institutions have managed to mix meritocracy and corruption, competence and incompetence, and they have somehow kept the country moving onward and upward. It might slow down soon, and even implode from its myriad contradictions. But analysts have been predicting exactly that for decades, and they’ve been consistently wrong so far.
Meanwhile, as China has been powering forward largely against expectations, the United States and other advanced democracies have fallen into domestic dysfunction, calling their future power into question. Their elites steered generations of globalization successfully enough to enable vast social mobility and human progress around the world, and they did quite well along the way. But as they gorged themselves at the trough, they overlooked the negative economic and social effects of all of this on citizens in their internal peripheries. That created an opening for demagogues to exploit, which they have done with a vengeance.
The Great Depression ended an earlier age of globalization, one that began in the late nineteenth century. Some thought the global financial crisis of 2008 might do the same for the current wave. The system survived, but the emergency measures implemented to save it—including bailouts for banks, but not for ordinary people—revealed and heightened its internal contradictions. And in the decade following, antiestablishment movements have grown like Topsy.
Today’s competition between China and the United States is a new twist on an old story. Until the onset of the nineteenth century, China was by far the world’s largest economy and most powerful country, with an estimated 40 percent share of global GDP. Then it entered a long decline, ravaged from without and within—around the same time the United States was born and began its long ascent to global dominance. The United States’ rise could not have occurred without China’s weakness, given how important U.S. dominance of Asia has been to American primacy. But nor could China’s revival have occurred without the United States’ provision of security and open markets.
So both countries have dominated the world, each has its own strengths and weaknesses, and for the first time, each confronts the other as a peer. It is too soon to tell how the innings ahead will play out. But we can be confident that the game will continue.
BEWARE OF WHAT YOU WISH FOR
To understand the world of tomorrow, look back to yesterday. In the 1970s, the United States and its allies were rich but disordered and stagnant; the Soviet Union had achieved military parity and was continuing to arm; China was convulsed by internal turmoil and poverty; India was poorer than China; Brazil, ruled by a military junta, had an economy barely larger than India’s; and South Africa was divided into homelands under a regime of institutionalized racism.
Four decades later, the Soviet Union has dissolved, and its successor states have embraced capitalism and private property. China, still politically communist, chose markets over planning and has grown to have the world’s second-largest economy. Once-destitute India now has the sixth-largest economy. Brazil became a democracy, experienced an economic takeoff, and now has the eighth-largest economy. South Africa overturned apartheid and became a multiracial democracy.
The direction of these changes was no accident. After World War II, the United States and its allies worked hard to create an open world with ever-freer trade and ever-greater global integration. Policymakers bet that if they built it, people would come. And they were right. Taken together, the results have been extraordinary. But those same policymakers and their descendants weren’t prepared for success when it happened.
Globalization creates wealth by enticing dynamic urban centers in richer countries to invest abroad rather than in hinterlands at home. This increases economic efficiency and absolute returns, more or less as conventional economic theory suggests. And it has reduced inequality at the global level, by enabling hundreds of millions of people to rise out of grinding poverty.
But at the same time, such redirected economic activity increases domestic inequality of opportunity and feelings of political betrayal inside rich countries. And for some of the losers, the injury is compounded by what feels like cultural insult, as their societies become less familiar...
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