Geopolitics – Now More Than Ever

The Cold War Is Dead! Long Live the Cold War!

For nearly fifty years following World War II, the planet was embroiled in a mutual standoff between two superpowers. These two anchors of the world system did, in fact, fight wars with each other through proxies and civil conflicts – in Africa, Asia, and Latin America – but the world was spared the nuclear conflagration that all feared. In its early days, this “Cold War” between a U.S. led bloc of supposedly democratic states (“us”) and a Communist other side (“them”) led by the Soviet Union seemed quite palpable. Memories were still vivid of that victorious world-wide struggle between aspiring imperial powers (the Axis) and established imperial powers (Britain, France, U.S.). The U.S.S.R, the other great victor, was tagged by those established powers as having its own aspiring imperial ambitions – recreating the identical prewar geopolitical environment with different actors.

The classic Clausewitz expression defining geopolitics, war is a mere continuation of policy by other means,” was not disproved by the absence, in the second half of the twentieth century, of any civilization-ending Armageddon between those two superpowers. Indeed, the proxy wars and civil wars around the world are easily interpreted as supporting Clausewitz’ axiom. Our policy was to stop the spread of communism, theirs was to defend various peoples from Western imperialism.

However, something else was also happening during this period. A combination of technology and enhanced mobility of capital (investment) caused the world to shrink. Many societies in the emergent Global South advanced from poverty to aspirations of middle-income status – especially in Latin America and Southeast Asia, but also including Nigeria and South Africa. Recovering Europe regained its status as an integral part of the rich Global North, even without its colonial empires. The European Union expanded Eastward. At the end of the twentieth century, even Russia finally seemed prepared to shed the yoke of a restrictive economic system and embrace the “free world” of global capitalism. Francis Fukuyama called it the end of history.”

In Asia, as the 21st century progressed, China and India discovered separate paths to rapid economic growth. China, despite a single-party, centralized economy, now stands on the verge of equality with the United States in total GDP (if not GDP per capita), whereas Russia’s abandonment of its socialized Bolshevik experiment seems to be correlated with a decline in its status among world economic powers. And India appears to have implemented a robust industrial policy built on entrepreneurship combined with hefty government subsidy. What has become of the bipolar world of the Cold War?

Imperialism and colonialism, while undeniably related to global competition for resources, were not the sole expressions of geopolitical conflict throughout history. Yes, empires always become acquisitive. Their growth is achieved through both control of territory and people. Increasing imperial territory also increases the supply of labor. And labor does create wealth, along with technology and trade. But consumers are needed to create wealth for producers.

We are now seeing the beginnings of a new 21st century cold war – a competition between producers for markets. Whichever nation can sell more of its stuff is the winner. In this world of free trade, physical control of territory (occupying other countries), becomes less significant. Capital is supreme … and transnational!

Trade, the New Global Competition

Free trade may be in the eye of the beholder, however. Over the last thirty or forty years we have seen an increase, not continuing decrease, in global inequality between rich and poor nations. The fate of many poor countries in the Global South depends upon indebtedness to the rich Global North. This debt is often owed to the international financial cartel, represented by the World Bank and International Monetary Fund, rather than central banks of great powers. Sometimes development in a Latin American, African, or South Asian country can be a benefit to creditors, but other times not. The Eurozone crisis following the crash of 2007-08 was an example of how that international cartel decided it was in its best interest to simply shut down credit to several European countries (notably Greece). Austerity remains a weapon that powerful countries can impose on weak countries. But weaker governments cannot impose austerity on their populations – witness Liz Truss’s recent downfall in the UK.

Trade is only free insofar as both parties to the trading benefit mutually. It becomes less free when monopolies, or oligopolies, force some nations into have-not status relative to their competitors. In worst case development scenarios, the only resource some countries have is their labor – which often must emigrate to have value! While immigration is a net positive for host countries, culturally it seems to produce tension. And it is an economic negative for donor countries – they are losing workers to the host country. Likewise, trade in natural resources may be a short-term economic plus for the source countries but may have diminishing returns as the market for those resources evaporates, replaced by new raw materials (oil replaced by lithium, for instance). Similarly, agricultural productivity – a staple export for many countries – may be drastically affected by climate change. In short, any wealth derived from natural resources is a risky bet for economic development. Raw materials, and labor, do not necessarily equal capital – there are winners and losers in the world of “free trade.”

For countries that have built capital, the rich countries, there is much global competition today – as there has always been. This is the grist of geopolitics. Some built capital has come from foreign investment, most iPhones sold around the world are either manufactured in China, or with infusions of Chinese capital. China now imports very few cars – most of the vehicles for its exploding motoring population are manufactured locally.

Speaking of China, is its “Belt and Road” initiative imperialism? Or is it merely capital investment? An alternative to the World Bank? Would the U.S. go to war with China because they are outcompeting us in parts of the world where we have been the primary supplier of capital in the past? Much of Southeast Asia fits into this category, and much of Africa into a similar slot vis-à-vis Europe. Russia, for its part, is the traditional source for development aid in Central Asia, another Belt and Road investment target area. So, there is a new Cold War — economic, not ideological — between China and those past “great powers” in the West.

Say Goodbye to Ideology

The Cold War of the mid -20th century was powered by an all-encompassing ideological battle. It was considered an existential struggle for The West, otherwise known as the “free world,” against Communism. The Soviet Union and its Warsaw Pact satellites in Eastern Europe, joined in the 1950s by China, represented the opposing ideology. Communism was bad, and it threatened us. (Lenin and Mao said as much.) Philosophical arguments against it were devised – usually dating back to the Bolshevik Revolution of 1917, the “dictatorship of the proletariat,” etc. The philosophical underpinnings of capitalism were quite correctly under direct threat from these ascendant powers originating in the “East.” Even pre- Bolshevik Revolution, European socialism was already committed to the ultimate defeat of capitalism. If your well-being was tied up somehow in the accumulation of capital, you were world-wide socialism’s enemy. Capitalism’s destruction was the honest goal of the political Left around the world from the mid-19th century until the final collapse of the Soviet Union in 1991.

But then things changed. It became apparent to the entire world (even China in a way) that capitalism had won! Francis Fukuyama and others celebrated the obvious geopolitical fact that the “end of history” had arrived. There was no longer an ideological conflict between two opposing world systems. We could advance together as a planet, dedicated to nothing beyond the betterment of our respective populations. We knew how this could be done. No wars, no selfish imperialism. All nations were premised on self-determination. All peoples would improve their circumstances, if not at equal rates, at least peacefully.

But wait. Not everybody was satisfied with their predetermined rate of progress – it needed to move faster. And opportunistic political leaders could easily convince a population that some other group, or people, were preventing them from advancing faster. Typically, the villains were portrayed as powerful nations far away, even whole cultures that were identified as the “other,” as foreign. Sometimes the villains were within their own society – a common feature of populism, either Left or Right. Or maybe it was an ideological divide, those who believed in “authoritarianism” vs. those who were committed to “democracy.” If the enemy ideology was foreign, you’d have the re-emergence of the old Cold War jingoism. The enemy just had a different name.

Wars are caused by these divides. They may be proxy wars fought by hapless client states, or they may be civil wars between two social groups within a country. But war is bad, right? Surely nobody benefits from it — except perhaps those who gain some geopolitical advantage. It may be accumulation of capital, it may be political survival in your home country, but it is most definitely NOT the well-being of your population.

Let’s abolish this ideological divide from our political consciousness. Start organizing around economic strategies that really benefit the assorted cultural and language groups of people throughout the world. Nobody’s culture is less deserving of economic development or a better life than any other. Economic development comes from capital and labor. It is not a zero-sum game, either. The only constraints may be balance between the very rich, whose growth rate will naturally be lower, versus the poor who have more room to improve. International organizations, like the Word Trade Organization, can cajole, but not coerce, nations on both sides of the divide to follow rules. And planetary limits to development are still more hypothetical than constraining, on net.

Prove me wrong!

— William Sundwick

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