This is a derivative post. Actually second derivative: a review of a review of someone else’s book. I think it is worth it.
Peter Zeihan is a geopolitical analyst , speaker, author, hiker. He lives in my favorite state, Colorado and posts daily snippets on topics of geopolitical and economic interest. They range from 2-10 minutes usually and are free. They are, of course, a gateway to many things on Peter’s website that are not free. I have found value in the books and talks on YouTube, but I have not yet dived into any of the more costly series he has recorded. His ‘thing’ is that he records most of his daily updates while out hiking in the many and varied parts of the world he travels to. His jet lag must be legendary.
The book reviewed below (in italics) is titled The End of the World is Just Beginning. The review by Kevin Furr is everything you need to know about this book – apart from reading it – which I recommend:
This is book #4 by Geopolitical consultant Peter Zeihan (pronounced “Zion”), and his Magnum Opus. And boy is there a lot to unpack here. What makes Zeihan indispensable is his knowledge and approach that integrates the effects on nations of their geography, resources, demographics, and economics to explain their history, understand the current situation, and forecast what may happen next. As an example of why people like me follow him, in his 2016 book “The Absent Superpower” Zeihan devoted a chapter to how Russia would invade Ukraine and he explained why and for what aims. (The explanation is SO Zeihan, based on geography and demographics. Mainstream publishers thought that was so ridiculous, he had to self-publish that book.)
The sparest summary I can give is this: The global political and trade order that has existed since the end of World War II is going to end — it only existed because of the Americans, and Americans have lost interest in enforcing it. The result will be a huge decline in the ability of all nations to conduct international trade (ie, globalism), which will have all sorts of deleterious effects on most of the world — from lack of energy resources, to hunger, to big economic declines. The best cases will be nations that can source most important things themselves, or enforce tight trade alliances that can withstand foreign interference. On top of this, most nations are facing demographic decline (ageing and shrinking populations, the retiring of the baby boomers) which will only make things worse, with the adjunct of greatly reducing availability of capital and finance. Meanwhile climate change, though in some spots actually beneficial, will add to the confusion and challenges.
Underlying this and all of his books is his framework: the world as we know it is the result of what he calls The Order — that is, the world order that emerged from the 1944 Bretton Woods conference and the end of World War II the next year. The US guaranteed freedom of trade on the seas and guaranteed security in Europe in exchange for disallowing military adventurism. The US would open its markets to its fellow nations — unilaterally, they need not open to the US — to help their economies recover from the war. In an historic plot twist, the partners included the former enemies Germany, Japan, and Italy, as well as the allies.
With an iron-clad rule that anyone could acquire anything from anywhere — all they had to do was pay for it — and that they could sell what they wanted into the US market, The Order ended a myriad of potential military rivalries and also ended the Age of Imperialism. With the benefits provided by the US guarantees and the ability to trade freely, there was no longer a need to maintain a militaristic empire and huge navy to access markets and resources and labor abroad. You could access those markets all you want, no need to bring the gunboats and set up a colonial government.
NOT included in the deal was the USSR and its reluctant satellites. US-friendly nations had to side with the US against the Soviet bloc. And that was the point: the US guaranteed benefits to all in order to maintain a free world to face off the Soviet threat (Zeihan often refers to this as a bribe).
But the point of all this was NOT to maximize the benefits to the US — on the contrary, it all came at great expense to the US, which bore great costs and suffered a loss of economic growth and dynamism to maintain the order. Zeihan: “Recent decades have not been the American CENTURY, they’ve been the American SACRIFICE.”
Per Zeihan, The Order has begun to unravel, starting with 1) the death of the USSR and reinforced by 2) the advent of petroleum fracking. The Order was created to defend the world from a threat that no longer existed. That the Order has still more or less been enforced up to now is really just a matter of inertia and the need to maintain world trade in oil. But Zeihan is convinced the US is well on the way to abandoning the order and no longer suffering the cost and hassle of maintaining it. Among the evidence, he points out that the last real Internationalist President was the first George Bush (Bush-41) — and he got run out of office.
And so that brings us to the point of this: what will the world look like when The Order no longer is in force?
With that question in mind, there are some huge points to understand. It cannot be emphasized enough: the world as we know it today is an anomaly and the product of The Order. The peace and prosperity that so many nations have been enjoying for 70 years is an anomaly. That is not the normal course of events. The peace that has obtained in Europe since 1945 did not result from Europeans becoming enlightened and peaceful. The peace was imposed ON them, externally, by the US. The enormous growth in globalization — anomaly. The hyper growth of East Asia and China — could only have happened thanks to The Order. Germany can export factory machinery to China without that cargo ship being pirated by the British Navy — anomaly!
The world as we know it today — everything from the EU to the rise of China, the abundance of capital, the fact that even a cheap product like blue jeans can be shuttled back and forth as an intermediate good among a half dozen countries each doing the next step in manufacturing — is only the way it is because of The Order. So what happens when the order inevitably collapses, as Zeihan insists it is about to do? What happens when the US — the only country even remotely powerful enough to pull this off — becomes uninterested in global stability and no longer will make the effort? That’s what he explores in abundant detail in this book.
As he takes on one topic after another and describes how the collapse of The Order will cause a world of problems, there’s a recurring theme to most topics: the Big Loser will be China, and the Big Winner (or at least, fittest survivor) will be the USA.
For China, it cannot be overemphasized just how negative Zeihan is about its future. Conventional wisdom and pseudo-intellectuals like Ray Dalio blather about China being the next great Superpower (and a great place to invest). Zeihan is having none of it. Not only is China NOT the next superpower, it’s almost certain that the Chinese nation as exists today will break apart, and its economic demand and supply will collapse, and China will cease to be a power in the world. Even without the end of globalism, the most aggressive demographic projections suggest China’s population could fall by HALF by only 2050, Zeihan says.
(That seems a bit extreme to me, but without doubt now as of mid-2022 China’s population has already peaked and is already shrinking — based on China’s own latest official stats. And that is NOT a trend that reverses. Ever. But if you Google it, you’d find most links on China population overstate it quite a bit. UN chronically overestimates and cannot pull back projections fast enough to keep up. The Worldometer site is right now overstating China population by at least 40 million and unaccountably continues to forecast growth — it simply ignores China’s own official numbers and instead relies on continued “elaboration” of obsolete UN projections from years ago, without correction.)
The book is absolutely rife with such phrases as “after the fall of China” and “in a world without China”.
Now, Zeihan is not a Jingoistic USA #1 cheerleader. He doesn’t even LIKE the future he sees. His predictions of relatively good outcomes for the US are based on his analysis of the indisputable advantages the US has thanks to those subjects he weaves into his analyses — geography, resources, and demographics especially. An example of how geography matters that I like: The Texas Gulf coast alone has more potential natural seaport capacity than the entirety of Asia. Energy? The USA is the #1 producer of oil AND natural gas AND it’s the best-situated advanced nation to make use of wind and solar energy — whose potential by the way is quite limited for most other countries no matter how much they talk about it and invest in it. [Don’t believe him? At this moment in October 2022 — after their many years of bragging and preaching about wind and solar — the news is full of Europeans panicking as they desperately hope to get though winter by stockpiling burnable wood pellets, firewood, horse manure, and trash.]
Hunger? US is the #1 producer and exporter of food. Resources? If the ultra pure silicon used to make chips becomes an item of contention, 95% of it comes from a mine in North Carolina. Or Demographic decline? US Millennials are a baby boom generation, and there’s an outside chance that they’ll PRODUCE a baby boom generation for the future.
Zeihan’s depressing view is that all THIS is the kind of thing that will really matter in the near future and most places will be a lot worse off than the US. Things will be tough all over but the US and its NAFTA allies will be in pretty good shape (along with the USA’s own advantages, the Canada/USA/Mexico bloc makes for about the most perfectly complementary international resource, labor, and consumer markets imaginable).
To finish the quote above: “Recent decades have not been the American Century, they’ve been the American Sacrifice. The FUTURE will be the American Century”. But there are also other countries in promising situations and these he outlines too.
Note: Zeihan states that the final edit of the book occurred in February [2022] just before Russia invaded Ukraine. He was able to insert a few final-final comments one week into the war. I would say that current war-induced issues of food security and fertilizer supply certainly fit into Zeihan’s predictions. As of this writing, Germany has just declared a natural gas crisis because Russia has cut gas supplies to it. Germany also has seized three LNG ships from Russia. (Or take this recent quote from the UK Daily Telegraph: “Olaf Scholz’s government faces the unenviable task of dialling back Germany’s dependence on both countries [Russia & China] and finding an alternative to globalisation.”)
Meanwhile the money/food/fuel-starved Sri Lanka is suffering from the disastrous mistake of banning chemical fertilizers because of some hippie delusion, even before the supply of those became a current wartime casualty, and so has seen food production plummet by 50% or more. These are all the kind of food and resource scarcity, trade disruption, and competition issues Zeihan spends this book warning about. He probably thought we had more time.
It is tempting, as a few reviewers do, to push back on the conclusions as unrealistic and too straightforward in their analysis. There is a mountain of detail and data. I will probably need to read this again, or at least keep it handy as a reference.
The only part of this I see as slightly off – perhaps – is the lack of weight given to the expression and impact of political will on the forecast outcomes. In purely economic terms, the EU is currently committing economic suicide by continuing to enforce sanctions against Russia. Ukraine was not forecast to perform so well in a war against Russia. And yet…the first continues and the second continues to surprise.
There isn’t a lot of doubt in Zeihan’s world view and many commentators have taken issue with his apocalyptic view of China’s future. Many of his predictions from 10 years ago have come true, so he has some credibility. Of course, he is not going to be right on everything. It is, perhaps, worth pondering whether some of the challenge inherent in demographic decline may not be offset by the rollout of AI. That will be the subject of another Daily Something, but, for now, if you haven’t bookmarked Peter’s website www.zeihan.com and signed up for his daily email, I recommend it.