Book Talk with Peter Zeihan

hello everyone my name is kamran bihari i'm the director of analytical development for the center for global policy and welcome to another session of cgp's book talk webinar series and today i have the distinct pleasure of hosting an old colleague of mine and one of the world's most prominent geopolitical forecasters and analysts uh peter zion and he is uh he spent a long time at stratfor many years there but he is now known for his own company called zion on geopolitics and he has the author of many books and we're going to be talking about the latest one dis united nations the scramble for power in an ungoverned world thank you peter for doing this welcome to uh our webinar series pleasure to be here and it's great to see you again cameron likewise so um this is a fascinating book you are challenging a lot of what most observers take for granted about the world um and and it's really rich with insights and it's really a pleasure to read because uh you know there are a lot of books that have a lot of you know filler and background and and i'm happy to say that uh you know i couldn't stop reading because uh i needed to absorb everything so let's let's start from the top and you you say that the world is going to become ungovernable some people already see that happening but you point to a very deep malaise within the international system and i want you to start from there and tell us you know what is that what is it that you're trying to address and why you wrote this book and how long you uh it took you to write it and take it away well there's uh let's let's start with the basics there why i decided to write it my whole career has been about documenting transitions i'm a developmental economist by training so it's all about figuring out what policy works where and why and why if you pick that policy up and move it into the next town over it's usually an utter disaster policy needs to reflect place and some local governors really understand that and that's why you have some wildly successful cities places like charleston south carolina for example is probably the best-run city in the country in terms of economic policy and others that just can't make it work even when their geography might suggest they'd be very successful detroit comes to mind you can apply that on a national scale you can apply that on a global scale and you can apply that across timelines so what i've done with my first couple of books was go through the major technological advancements that have changed how people react and interact with their locations so sedentary agriculture deep water navigation and industrialization are three great technological revolutions and each one tends to favor a different sort of geography so whoever figures those texts out first has a great run but then those technologies tend to evolve and mature and migrate to other geographies that can actually use them better so sedentary agriculture terminal river valleys in desert environments places like lower egypt places like the indus river started out there but eventually spread to any place they could have a windmill deep water navigation started in the iberian peninsula but eventually moved to great britain because it you know as good as the peninsula is for enable power and ireland is better industrialization started in england moved to germany that has a better river system but eventually all of these technologies migrated to the geography that could make the most use of them and that was the united states and the timing then really mattered so once the united states started to emerge in the late 19th century as the global power and it started to participate in the global system in the early 20th century the united states had this rare moment in time where industrial wars had leveled much of the advanced world leaving the united states as the only rich country with its physical infrastructure intact and the americans used that moment to create the global order that we now live in and that's where global trade came from and global finance and global energy flows and global consumption everything about the world that we know is because the americans leveraged that moment at the end of world war ii we did that specifically to fight the cold war by sharing our infrastructure and consumption and military forces with our allies we were able to allow them to export the way back to affluence but that was always a security policy and that's something that most people forget is that the united states didn't create the global system so it could trade with the world it already had a continent-sized economy at home that was just fine it did it to fight a war and that war ended in 1992 and we've kind of been on strategic drift ever since so the big thing for dis united nations and the reason why i tried to get it out of the door as soon as i could was that with the americans losing interest completely in all things global and this is not a trump thing if if you listen to the democratic debates of those 114 million people who are trying to get the ticket every single one of them said that donald trump was being too soft on trade so this is left this is right this is center the americans are just done and if everything about the last 70 years that allowed globalization to exist is dependent upon the americans commitment to global security and that commitment is now gone then everyone needs to find a new way to operate and what we do in disunited is we explore the countries that we think of as the countries that are going to dominate the human condition and show how actually they're the ones that are most dependent upon the united states whether it's brazil or iran or russia or china and the countries that will do very well are the countries that actually have good geographies and have seen their relative position in the world weakened by americans basically leveling the playing field and allow everybody in and that is that's countries like france or argentina or turkey or japan countries that we think of either as has-beens or middle powers that just can't get it right the the rules of the game are changing right now and of course kovit comes along and speeds everything up well that's a that's a really good intro uh on something that's really deep and complex and broad and so let's let's uh you know go down in altitude and i want to you know ask you about you know you constantly refer to the order and you've already mentioned uh the order that the united states created um you also want to tell your readers uh very early on to not take this for granted that what has existed since 1945 and even past the you know the collapse of the soviet union uh you know is an anomaly with the rest of history um i want you to unpack that i want you to sort of explain you know how this order is was or is still truly unique so that we can appreciate the coming disorder in the context of you know the entire history of humanity well let's break that into three pieces so first of all the world before 1945 the world before the order was imperial and had been imperial for millennia the idea was within a region and then once technologies allowed it on a global scale you would have one or two major powers that would arise and dominate their neighborhoods fear of influence you could call it imperial outlands the the imperial marches whatever you want whatever term is appropriate for the setting and then those empires where they would rub up against one each other would battle those empires within their own system would maintain their own internal trade supply alliance in order to benefit the imperial center whether that whether that be paris or baghdad or something else and this is basically how humans interacted from about 3000 bc this was our normal and if you lived in an imperial center then you would benefit from all the riches of the empire and if you lived anywhere else in the empire then your sole existence was to serve the purposes of the imperial center which usually meant a lot of your wealth whether in taxes or resources or or slaves were sent off and anything that you did get back was usually just a military formation that would be sent in order to maintain control these imperial systems would battle one after the other they would rise they would fall over time until the technologically the technologies changed in roughly 1500 we got deep water navigation in roughly 1750 we started getting industrialization and the interaction of geography and technology meant that new powers would rise in new places industrialization was particularly key because it allowed countries to reach out in a matter of days almost anywhere in the world and exert influence in a way that normally would take a multi-decade if not multi-century build up that lasted until world war ii destroyed the entire system leaving just one country standing what the united states did was unique in many ways but by far the most dramatic impact is that the united states did not establish an empire remember an empire siphons resources from the territory it controls the united states did the opposite whether it be a financial aid or military protection the united states distributed its power on a global scale in order to cement its alliance network together it was never an economic policy so most of the modern middle east particularly in places like the persian gulf these places could have never existed as independent powers with a notable exception of iran of course without american strategic overwatch and that's a problem they're experiencing now is how do you how do you adapt to a world where oil shipments are not safe and the americans really don't care what happens to you we're going to see some version of that on a global scale because there is no nato without the united states there is no east asian manufacturing model without american security overwatch there is no global oil trade without americans patrolling the seas so the great pillars of civilization as they've evolved in the 20th century are all of a sudden not simply without their guardian and without their maintainer but there are plenty of regional powers some of which used to be american allies that have reasons to tear those pillars down for their own local geopolitic that's gonna take us into a completely new direction because it's not like we're gonna shift just immediately back to the old system of empires where you've got a dominant regional power that takes time and most countries have forgotten how to operate in that environment and most of the countries that we think of right now as the challengers to the americans you know the powers that are heir to the throne they actually need the americans more than the countries that have been kind of quiet for the last half century so a quick example china everybody's like china china china their horizons take over they're going to take over the world covets speeding up no 40 years after the one child policy consumption consumption-led growth in china is now completely impossible 60 years after a debt-driven policy infrastructure-driven growth is now impossible all that is left for china is export-led growth and they don't have enough resources to fuel that on their own so china has become one of the countries most dependent upon the american-led security structures just to keep their economy at an even keel so all the americans really have to do if they want to wreck the chinese is go home that's something the americans can manage even in the current political climate china utterly lacks the economic structure the financial reach and the most importantly the military capacity to protect its own system uh so it's gonna disappear this decade regardless on the flip side you've got a country like japan which has actually the world's second largest expeditionary navy and because the population is aged so much it's not nearly as dependent upon the flow of trade in and out as the chinese are banned it's physically positioned further out from the mainland so it's less vulnerable to interdiction and it can access the western hemisphere in a way that the chinese simply can't so long as the chinese don't get into a big fight with the americans japan is the the country to bet on for a while now does that mean i'm gonna invest in their stock market no but i'm not a financial analyst that's not my job i i track national power and this change in environment that we're living through right now is leading to kind of an interregnum if you will a period of shifting rules and shifting powers between a period of extreme stability under the order and a period of regional competition as new powers rise but that point in between where everyone's learning to operate in that environment we're going to see a global demographic conversion we're going to see a collapse of the export-led economies we're going to see countries that have military capacity use it we're going to see countries that don't have military capacity develop it all in just a few years we are living right now through the greatest period of change in at least the last 500 years and it's going to be catastrophic in many places the 2020s are going to be a decade that historians are going to be talking about for centuries wow you've given us uh a lot to chew on it's overwhelming i mean and i'm sure everybody listening and watching is is being overwhelmed but that's a great thing um that's why we have you here uh so i want to get into some of what you just said but before i do i want to go back to your book um and and you just mentioned china and you have two chapters on how to rule the world and you posit the american model and then the british model but in the context of what china is doing unpack that for us over here and tell our viewers uh you know what is it why are you trying to compare and contrast especially in the chinese context well it's impossible to talk about geopolitics today without bringing up the chinese they're the second largest economy everyone's kind of betting on them dominating the future and especially under covid they're becoming far more aggressive diplomatically and strategically and so you need to understand the strengths and the weaknesses of the chinese system and the reason why i went with those two chapters with the american and british model is the americans and the brits are the only country countries in human history that have actually dominated the globe it's not something that happens accidentally it's not something that happens quietly and it's not something that happens over a long period of time in the case of the brits they developed a technology industrialization and it took a century or two for that to leak out to the rest of the world so the reason the brits with only three percent of the world's population were able to control most of everything is they literally bought brought a gun to a knife fight for a century and there were very few countries that could stand up to that particularly with the way that they decided to run their imperial system indirectly through local powers you can't replicate that now because there is no technology right now that can overwhelm the technological suite that currently exists so even if the chinese managed to dominate ai which by the way is software so it can be stolen and applied anywhere in the world in less than six months that's not a century advantage the chinese simply can't out develop the world leaving aside the fact that they're at least 30 40 years behind most of the advanced world right now the american model is basically built on america subsidizing everybody providing strategic overwatch for everyone else's shipping even at times that we are at war with them we were protecting vietnamese exports while we were at war in vietnam that's that's the depth of the commitment of the american to the global structures can you imagine the chinese protecting rival economic shipments that would hurt their own corporate interests no china's a predatory economic power china needs open markets so it can shove their products out if that gets shut off it doesn't work and the chinese need access to every possible market they can find and with global demographics shifting and aging that market is going to go away the size of the global consumption base is probably going to be about a third to a half the size in 2030 that it is right now i'm sorry a third smaller to half smaller i said that backwards so there's nothing about the system that works in the midterm for the chinese and there's nothing about a chinese-led international system that actually works for the chinese all of the factors whether it's military protection consumer activity financial capacity the chinese just don't have it and if they were to reform their system into a direction that might allow a british style or an american style domination you'd be doing it without the ccp and and that is something that the ccp is not simply not willing to consider folks uh we're speaking with peter zion who is the author of this united nations the scramble for power in an ungoverned world and uh please for those of you who are joining us uh you know late please send your questions through the chat feature if you're joining through zoom and if you're viewing on youtube uh you can you know uh put your questions underneath the screen in the comment area and we'll pick them up from there and we'll try to answer as many as possible thank you so peter um moving along and you've already sort of touched upon this and hinted about this um you are obviously saying that china is not going to be the next hegemon global hegemon uh and in fact in your book you say you know we need to in east asia we really need to worry about japan and that's really counterintuitive for you know most of the planet uh walk us through that argument japan is primarily geographic i mean there's a number of reasons you should bet against japan in terms of economics and it's a very old demography that is aging very very quickly there aren't a lot of resources honestly the japanese aren't even self-sufficient with food i mean this this would suggest that japan is a country that just can't make it work but japan has always kind of been like that uh what makes japan special is it is an island country that is able to use its navy it's kind of built into the culture even pre-dating unification all the local dynamos typically had navies and those were merged in the late 1800s and then industrialized and so japan's naval tradition and its physical position with most of its cities facing the pacific rather than asia gives it a huge amount of insulation never has to have an army and it can just go out and that is true as true today as it was back in the 1940s japan is actually the only country in the world that has functional super carriers right now that are not american flagged the us has 11 the japanese have two and they have two smaller carriers that are pretty good all are capable of global deployment so anyone who would get in a scrap with the japanese americans aside would have to face naval aviation that was very professional it could come out them from any direction at any time and interrupt any supply line that is even theoretically possible so if your country is dependent on energy imports or merchandise exports you get in a scrap with japan you're done uh the japanese don't even have to come within a thousand miles of your mainland in order to crush you economically in addition because of that age demography the japanese have basically relocated a good portion of their industrial plant to other countries to service the markets directly hiring locals selling the locals and then some of the profits coming back of course to tokyo that economic model if you can maintain good relations with your target market works in a world without global structure in fact it even encourages your host government to take steps to protect your supply lines so in the case of the united states japan has factories in alabama they have factories in south carolina and texas and mexico it's a good system it works and it doesn't require east asian security it just requires american security and the americans are pretty good at taking care of their own when it comes to that so if you combine the fact that china has basically outsourced their economy and the fact that china can become the military determinant anywhere in the east asian rim or indian ocean that they want to be this is a country that not only is going to last for decades and is going to see a huge increase in its relative power compared to other countries in the east asian region this is a country that's likely to get a lot more aggressive doesn't mean we're going to see a neo-imperial empire modeled on what they had in the 1920s it'll probably be a lot friendlier because the japanese will able be able to provide the sort of maritime protection that the americans used to provide and in order to do that there is a certain trade-off handing over security quality to the japanese has consequences most of them are positive because it means you can get japanese investment so for southeast asia writ large japan is likely to be the face of their future for china that's a big pill to swallow and i have a hard time thinking that the chinese are going to be able to make that sort of strategic compromise but if they don't they've lost access to global trade that's the only way forward for for the chinese if they want to remain an economically dynamic power i just don't see it happening so you've hinted on why the chinese are not going to be competitive uh in in the years to come could you sort of further break that down for our viewers and listeners what about china is going to drag it down if i can use that phrase well it's there's a long list so demographically the one child policy has gutted the population structure under age roughly 35 so consumption led today is already impossible and if you fast forward that to 10 years you get this huge pulse of population that moves into the retirement category so even export lead is almost impossible so the economic models that we're aware of today simply don't function in china 10 years from now and the one that long-term successful countries use is already not possible in the chinese system there's the regional issue the northern china plane the north china plain is where the han ethnicity originated and it's always been the kernel of empire whenever the chinese have been strong but if you go into central china with the yangtze river and southern china with the city-states on the coast these are places that only get amalgamated into northern china when periods when the han of north china are very strong otherwise they tend to rebel and break away we're probably going to see some version of that again china is completely incapable of feeding its own population they import about 80 percent of their energy and most of the inputs that allow them to grow food in the first place but because the land is so infertile and because their rain patterns are basically drought or flood they have to use about five times the input in terms of fertilizer and pesticides and so on of the global average so if anything breaks down global trade not only do you have an economic collapse in china you have a famine there's their borders there's no place that they can go to kind of fix this if they go south they go into vietnam and the last time the chinese tried that which was in 1979 they got treated to the same sort of gentle welcome as the americans and they didn't like that very much you go southwest you hit india and even if you could get past the himalayas which you can't india's nuclear power you could go west into kazakhstan but what does the winner get and you could go north into russia but the russians have made it very clear that if you do try to roll north into siberia for whatever reason we're not going to meet you with men in tanks and planes we're just going to nuke you and call it a day and then if you go out into the water the chinese maybe may be large and it may have a lot of cruise missiles but it's not long range only about 10 of their vessels or surface combatants of a size that can matter that actually can go more than a thousand miles so you can't you can barely get to a place like japan or the philippines much less go past it the chinese navy was designed around conquering taiwan and if no one else gets involved that might be possible but then what all it does is sever all connections because if the chinese really start shooting in the east and the south china seas no one's going to trade with them no one's going to sell a super tanker to china under those and under that sort of environment so everything about the chinese system today will fail the question is whether they can manage a transition and with the ccp the options for those transitions are very limited because the ccc the ccp's primary goal here is to mean power maintain power and they really don't care what the economic damage is so long as they can do that on the chinese issue in your book um and in your other writings you mentioned that uh their economic model is not sort of based on sort of what we think as profit and and therefore that that has created a huge problem in terms of you know staggering loans that haven't been paid up and they're just like a you know rising mountain of loans so can you explain that to our viewers sure there's many levels of it and getting data on china that's really reliable is difficult on the best of days but the short version is that in the west in general and in the united states in specific money is considered an economic good so the idea is that cash has a value so if you want to get a mortgage loan your house is used as collateral if you want to get a business loan you have to show that you've got a business plan and you've used capital responsibly in the past that doesn't apply in china and china economic or in china capital is considered a political good it exists to serve the state's political goals which for the most part are social placidity via mass employment so they'll funnel low to zero to negative interest rate loans and nearly bottomless supply to entities that can show that they can achieve state goals such as mass employment or maybe punching into a new economic sector and that's why the chinese have become the world's largest producer consumer importer and exporter of things like steel and cement you know that should not be possible but if you change the economic rules a lot of things that normally we would just kind of shrug off as silly suddenly become the norm the one belt one road program for example is not something i would call economically viable or even geopolitically viable but if you have an excess supply of things like steel and cement at home and there's no place to put them you build a rail line to a place like kabul or you run roads through the eurasian step uh through russia you know places that no one would ever want to transit anything under normal circumstances but if you're just trying to get rid of stuff that you've built fine now over time those loans still build up especially when you start taking out loans to pay off loans so best guess total debt especially once you include the local stuff is probably about triple gdp and for a country at china's level of development you'd normally expect a debt load of something like one quarter that china hasn't collapsed yet obviously but every other country every other company that has ever followed this model it's kind of loosely based on enron for the americans out there has eventually ended because eventually you run out of cash and eventually the capital disconnect becomes so huge so this happened in indonesia in 1998 and it destroyed the government it happened in japan in the late 1980s and they haven't had economic growth ever since but the only countries that have managed to transition from this sort of economic model to something more sustainable also went through extreme political convulsions in doing so and the two models to look at are taiwan and south korea and both of those saw the complete collapse of the authoritarian models that came before the imprisonment of the former presidents and cabinets and a shift to democracy the ccp is not even going to consider that path let's shift back to the to the western hemisphere and to europe specifically you make startling uh you know claim or assertion uh that germany is not going to be the powerhouse of europe france will be um and and so that's really odd you know for those of us who have sort of seen the eu even if it's weak and dysfunctional but germany is sort of keeping it holding it together and the news if you pay attention to the news you know there's nothing about france that comes out that says that this is going to you know uh you know emerge as as greater as a greater great power than it already is how have you arrived at that conclusion well let's start with the germans uh the german let's start with the german pluses they've got more miles of navigable waterway per unit of population than almost any other country on the planet so their ability to develop internally is huge they also don't have a primacy city berlin is obviously the biggest city but it's not the only one that matters they've got like 20 major metropolitan regions each with their own identity that has been able to develop and with industrialization they all got knitted together with rodent electricity and telegraph and exploded upon the scene but remember what germany was like before that you know germans have been around in some flavor for 1500 years but they've very very rarely been a significant power even in central europe they've been shattered among all of those various little municipalities and the larger powers the more consolidated consolidated powers around them whether it's sweden or denmark or france or austria or poland or russia have been able to prey upon the germans it took industrialization to make germany a country and that didn't happen until 1870 1871. now when that did happen new technology new geography they were able to explode upon the world in a series of conflicts that ultimately commonly did in world war ii which tore them back down and told them they could not have any sort of strategic opinions but the american global order said that we're all on the same side and we will physically look after you and we will provide you with a bottomless market that you can sell whatever you want to in that environment the explosive conflict that we saw from roughly 1840 to 1945 no longer mattered because the germans didn't have to fight for resources they didn't have to write fight for trade routes they didn't have to fight for markets the americans did that all for free and in exchange all the germans had to say is yeah americans can write our security policies problem solved we've now had 70 years of that and in that sort of environment where the germans didn't have to fight and the europeans could have anything provided germany was able to grow in a way that the germans have always wanted to but two problems first this era is ending and with the without the american strategic overwatch germany goes back to where it was in roughly 1900 when it is surrounded by potential rivals and it's going to have to battle for resources and access and markets second demographics germany was the first country to become majority urban because it industrialized so quickly and when you move off the farm and into the city especially if you're living in an apartment instead of having four or five kids for the free labor you maybe have one germany's birth rate has been among the lowest in the world now for 60 years and in the next five years the germans move into mass retirement which means that consumption-led growth has been impossible for decades and export-led growth will now be impossible five years from now and that even assumes that the americans stay engaged and there was some place to sell to there's not going to be so everything about the economic structure of the german system is done and with kovid it might be done it's probably going to be done a lot faster than five years now if this were any other country i'd just write it off this would be the end countries can't survive that sort of rapid economic and social change but germany has proved in the past that it can it just does so with a transformation that perhaps its neighbors don't really appreciate so if germany has to go out and look for its own security and economic needs again that means among other things it's going to need an independent security policy which means it's going to be needing an independent military policy which means it's going to need a military in the first place and so we're going to see a rearming in germany on the pace of what we saw in the late 1930s because without that germany ceases to exist now in the end will this allow germany to be sustainable in the long run no but no country wants to die in the next five years and that's one of the things the germans are going to have to do to have a chance compare that to france young population relatively robust independent infrastructure not really trade driven they've kept their market to themselves even within the european system they also don't border problem countries or even the spheres of influence of problem countries like turkey or russia uh they're atlantic facing they've got a foot in the north sea they've got a foot in the mediterranean their traditional arrival the united kingdom is kind of offline right now because of brexit and some defense reorganizations most of the problems that the rest of the world is going to be facing don't apply to france and most of the problems that the rest of europe is going to be facing don't apply to france so if the eu goes away like i think it will it's not going to be fun for the french but they'll be the first country to bounce back and they'll bounce back the highest and they will be something unique in the european sphere a country with a functional political and social model with a good geography not entangled by their neighbors problems and it has the world's third most powerful navy it can go out and get the things that the rest of europe needs and become what it's always wanted to be the broker of europe wow okay so um what about russia you more optimistic about russia than you are about china and uh and germany uh we i'm asked this question because it's almost like every other day you hear at least you know in when you read about the middle east that oh russia is now you know has is is a rising player in the geopolitics of the middle east because the united states has pulled back and but if one were to read your book you'd say well that may be momentary but russia is you know on its way down and fast take well let's let's start with the middle east just to give a purse a little bit of perspective and scale one of the many things that the global order achieved was a freezing of military conflicts around the world that had been endemic and it meant that con peoples could attempt to have a nation state on the french model to a certain degree even in places where the local geography would not suggest that it's very likely to succeed and it also prevented the more powerful countries of the old imperial cores from venturing out and conquering parts of the world so it might not feel this way for people who study the middle east right now but this actually has been the most peaceful period in its history because those outside powers have been prevented from operating and because the low capacity of the local states meant that wars among those states were relatively limited in most cases and that has allowed places like libya to continue to exist despite the fact they had a complete crackpot in charge of the place for 40 years uh and it had never been a country before in that sort of environment where you have low local state capacity but the outside powers are barred there's not a lot of strength locally so when the americans step back anyone who wants to come in is going to find it relatively easy to make their mark so what's the total russian deployment to all places in the middle east combined it's like what nine thousand that's not a lot that shouldn't be able to achieve what it's doing but the local powers are a step down and places like syria and libya honestly wouldn't be able to exist at all without the americans barring the empires all the americans are now leaving so anyone who wants to can put their chocolate into the peanut butter and we get where we are now okay so it's not a high bar to intervene assuming you can deploy a little bit russia at large uh let's start with the geography the russian core around moscow it's completely wide open to the west to the east to the south uh one of the reasons that the russians are so paranoid is people tend to invade them every generation or two so it's it's not that they're paranoid without reason uh second let's look at the demography between world war one world war ii collectivization brezhnev's mismanagement and the post-soviet collapse we have a terminal demography across the russian system across the russian ethnicity which is about 75 80 percent of the russian population which means that the russians are unlikely to remain as a majority in their own country as soon as 2050 and in that sort of environment a complete physical lockdown of the country is really their only option one of the reasons that the soviet system was as powerful as it was as there were enough ethnic russians to basically oppress everybody else into doing things for the russians that is no longer possible and with the post-soviet breakup russia's borders are actually longer than they were in the soviet period the soviet period yes they expanded out but they did a lot of consolidation and they anchored a lot in physical barriers like the carpathians or the tianshian mountains that's all gone so russia has to patrol and control a longer border with fewer people which is less ethnically russian moving forward and all of that assumes you believe russian data which honestly they've just started making up so the numbers are probably considerably worse than the ones i just gave you and so the russians are dealing with the collapse of their tax base they're dealing with the collapse of their infrastructure they're dealing with a halloween out of the security services and the military structure all in a time where they need more resources just to hold the line so the question in my mind is not will the russians die in my lifetime they will the question is what will they do on their way out the door to try to extend their twilight if i had a betting man i would guess that they would try to move out and re-establish a shadow of the former soviet borders because that would buy them another generation and i look at events in places like georgia and ukraine in that light however i could be wrong and it could be that the russians are so desperate for just the aura of power that they start intervening in places like syria and georgia and libya simply so they look at their government and don't see failure they see headlines of success even though the rot has now become irreversible and in that scenario where this is just about propaganda we are going to have a cataclysmic russian collapse in probably less than 15 years so you already touched upon the middle east but i i want to get to the part of your book which is you know another sort of counterintuitive uh you know forecast on your part and and it's it'll be startling for people who have read the book and who will listen to you uh you are so right now iran is seen as the power uh that uh is possible of the interests of the united states and the west and the region and so on and so forth uh you have a different view you consider saudi arabia to be far more of a threat than iran is why do you why do you make that case or why do you claim that well let's start with iran iran's geography normally would not be successful it's mountainous there's no navigable rivers of any length the climate is variable to say the least but because the geography of everyone around it is even worse it has been a power that stretches back to antiquity that means that iran has a certain amount of cosmopolitism built in and in a polyglot area that is mountainous you know you kind of have to do that that means that from an american point of view if you can ignore you know the the bad history the last 40 years iran's actually a natural ally its ability to expand is relatively limited uh most of its military has to be used to contain its own population and it's more tolerable of ethnic variety than the arab world with large now there's a boatload of caveats that go with that sentence but i think that's fairly accurate writ large in this environment you throw oil into the equation and the iranians have money to burn and so the iranians have been in a very difficult position for the last 40 years their primary export can only make it to market if the americans allow it and so as long as the american order continues you're fine oil powers trade powers economic activity powers the american alliance that's why iran exists today but the american alliance has fallen into disrepair the americans are leaving it the americans never used global trade their economy is not linked to globalization and they're leaving which means that everything that has made iran work under the eye to ayatollahs is all of a sudden in danger and they've over extended one of the problems that iran has always had going back to antiquity is if you start expanding out from the mountain core there's no clear place to stop and so they've become the preeminent power in iraq and in syria and in lebanon and now what they are now facing pressure from egypt from turkey and from saudi arabia and saudi arabia to be perfectly blunt has much deeper pockets and saudi arabia's external borders are hard desert that make a lot more sense so the saudi strategy under the house of solute and triply so under mbs is pretty straightforward spawn militant groups wherever you can set the place on fire let it burn this is where al qatar came from this is where isis came from and i'm sure in the next year or two we're going to see groups that we that are going to make isis look like preschoolers uh saudi arabia does not need to win the middle east for iran to lose saudi's power comes from holding the holy cities and comes from oil exports and it has a variety of export options that iran doesn't have so even closing the persian gulf down right now for iran would not achieve what they're after because the saudis can shift their crude out to the west coast to the red sea iran doesn't have another option so the traditional playbook that iran has been using to fight the americans no longer applies if the iranians do all these anti-american things and the americans don't care it actually is now going to hurt america excuse me it's going to hurt iranian interests more than american interests and its big rivals locally have other options iran has become one of the country's most dependent upon an american presence and that is something ideologically the ayatollahs just can't wrap their minds around so they're continuing with the old playbook you add in trump's new sanctions iran has ceased to be an oil exporter the persian gulf is not nearly as important as it was just three years ago and the iranians have yet to adjust their strategies to to match in the meantime the saudis are lighting matches wherever they can and iran is looking at a full-scale collapse of their entire position across the entire region that doesn't mean iran's going to cease to exist it doesn't even mean that iran's going to have a regime change it's a mountain country it's hard to shift but it does mean that this aura of invincibility that seems to exist in the region and especially in washington just isn't true and we're going to iran is likely to be the country that sees the most cataclysmic collapse in its position in the short term china is probably going to take a little bit longer russia longer still let me read something from uh your book i want you to expound on it you write and i quote is it american foreign policy to oppose terrorism or to oppose iran because the countries that do the most to generate transnational islamist terrorism are the countries that do the most to oppose iran is it america's goal to pursue human rights or expand trade because many of the countries who most excel at dehumanizing humans are among the most lucrative trading partners yeah americans really need to sort their out uh one of the things about the cold war that was kind of simple was that when you lived with fear of atomic destruction you kind of focus the minds and everything else was a secondary position americans aren't in that position anymore so we picked up kind of all these anticipatory goals in the 1990s many of which conflict and since there no one has stepped forward to take control of the global system american policy has never really needed to shake itself out what we're going to see over the next few years is that shakeout when the americans withdraw from the system the ability to influence events around the world will drop as a result and so americans will still have this relatively cantankerous relatively erratic uh foreign policy in smaller and smaller geographies that reflect where their interests actually are so if you're in the western hemisphere you might still be dealing with the americans on this or that level but if you're in the eastern hemisphere you're probably not going to uh there are some what's best way to put this on our way out the door issues because you can't withdraw in a day where the americans are going to remain a little bit involved just for to for vestigial regions uh reasons that's not going to be in the persian gulf that's not going to be in the levant in the case of islamic terrorism it's probably going to be in the african sahel and that's mostly because we have partners there that the americans really trust most first and foremost the french but in the middle east writ large they're going to have to figure out how to get on their own and if you're kuwait a bahrain or saudi arabia or the uae you're going to have to do that in an environment of extreme change without american military backup and without an external security guarantor that means you have to do one of three things number one build a military worthy of the name and learn how to use it that's one of the things that the saudis are doing in yemen right now nobody wants to conquer yemen there's nothing there but it's good for practice in anticipation of iranian attack on number two you need to have a completely different strategic outlook and that's why the saudis are burning everything down because if the iranians are on the defensive throughout the entire range of territories they've made progress in they're not really thinking about marching across that 600 mile desert gap between southern iraq and kafji third you find a new ally and the saudis have done that too israel we now have a functional alliance between the two powers that shares intelligence that provides energy resources that provides training that has replaced some of what the americans used to do and that alliance between the keepers of the mosques and the zionists is now the foundation of what security looks like in the middle east and some countries are okay with that some countries think it's awful but that is the new reality that has emerged in the region before i get to keep the q a and we have several questions there i just want to ask one last question about turkey because you spend an entire chapter arguing that turkey is going to become the regional power and you sort of intersect it with the iranian saudi struggle so what do you mean by that when you say when you say that okay there's iran there's saudi and they're going to struggle they're not going away but then turkey will enter this space and then somehow dominate it well for two thoughts first of all it's kind of by default uh iran expands and contracts expands and contracts throughout history and we're about to we're on the verge of a massive contraction so we know that the power of the future in this region is not going to be iran saudi arabia because of the strategy they have of burning things down even if everyone liked the saudis which nobody likes the saudis that could never expand in terms of influence and control they just don't have the population base to even try and they know that so they're not trying so if these two powers which are kind of defining the fight of the day if neither of them can do it you have to look at who else is in the region egypt is locked in a single valley always has been has really only expanded once in its history the russians are more concerned with the european theater they're facing their own collapses and the germans are not here for the long term and so you're not going to have any sort of european push through the balkans that just leaves turkey now turkey's geography is secure and controlling the straits and access to both the aegean and the black sea means that they're the linchpin of regional trade that hasn't mattered under the american order because everybody's on the same side and trade can go anywhere but without the americans when trade becomes contested all of a sudden turkey reprises its role as the link between north and south and east and west so simply for that point turkey is going to rise significantly as a power you add in that it is nato's second largest army you add in that it is nato's third most powerful navy you add in the fact that it's got a young and growing demography you add in the fact that it's got a functional independent manufacturing base that is bigger than the entire middle east combined this is the country that is going to dominate the region for the future at least the next 30 40 years the question is which direction does it go because everyone who studies turkey knows it has a european aspect it has an accidental aspect it has a caucasian aspect sometimes it's interested in the mediterranean and as powerful as turkey is compared to all of its neighbors it's not more powerful than all of its neighbors so it has to choose to concentrate its efforts in one direction or the other and i think everyone in turkey's sphere of influence agrees that they don't want the turks focusing on them so whether it is armenia or germany or egypt or israel or russia everyone is trying to get the turks locked into some sort of quagmire somewhere and honestly siri is a great candidate for that well thank you thank you so much and i want to shift to the gallery now and we have a bunch of questions and we're going to try to get to as many of them as possible so there's a question uh what is your best take on how climate change will impact the united states as well as your global geopolitical model two questions that have nothing to do with each other uh general geopolitical model let me start with that uh geography structure technology demography how those four interact is what determines everything and one of the things that has been the the geography piece and the demography piece have basically vanished for most model building in recent decades and that's because of the global order by putting everybody on the same side largely outlined or allowing connections across a global strata in any sort of economic activity we've forgotten that a lot of what exists in the world right now is artificial and now that that's going away we start to start dealing with the more bedrock issues of consumption and demographic structure and geography in ways that we really haven't had to think about for almost a century uh that that that's what kind of puts me in a different bucket for most people who do future casting climate change let me give you two examples and give you an idea of how difficult this can be to forecast so australia and wisconsin have experienced roughly the same increase in temperature but have had very different outcomes in australia most of that temperature rise has occurred during the day particularly in the summer and as a result we're seeing catastrophic continent-wide what forest fires that are absolutely devastating in wisconsin most of the temperature increase has occurred at night which means we're having longer frost-free seasons which means within five ten years wisconsin will be double cropping it's hard to see the australian situation is anything but a disaster it's hard to see the wisconsin situation as anything but a triumph and getting data that is good enough to understand how it affects the specific climactic geography of a local zone zip code by zip code we just haven't had that data yet now one of the projects that i'm working on for the next book is this specifically because we're starting to get that data i couldn't have made that australia wisconsin comparison two years ago the data wasn't there now it is we're starting to see it trickle through in ever larger flows so what i'm gonna have to do is go globally and look at how the climate has changed bit by bit by bit to see what the new map is now my best guess is to the results any place that is hot and wet is going to get hotter and wetter any place that is hot and dry is going to get hotter and drier so the climate zones that have managed to boom under the american order ones that may have been considered marginal at one point become more marginal and they're going to have to deal with the collapse of american support and the global system at the same time they're dealing with more extreme climates that means places like india are probably going to get more wetlands that means places like the brazilian serato are probably going to dry out that probably means in the middle east you're going to see the deserts get more intense but places that are in the middle places that had a more classical temperate climate are probably only going to get more water and if that is something they can manage then they'll probably actually do better so that argues pretty well for parts of eastern brazil and it argues very positively for the united states writ large so if most of the rest of the world is dealing with climate stress at the same time it's dealing with demographic collapse and security collapse and economic competition whereas the united states is just kind of like ho humming going along with bigger crop yields it would seem to argue that the united states is going to be one of the country few countries it's actually a net beneficiary of the changes and if you want another add another layer of crazy to that if you break down global trade that includes global natural gas and global oil trade for the united states that doesn't matter we're self-sufficient in both but if you're anywhere else in the world and you import the energy that allows you to literally keep the lights on and the trucks running you have two options option one you can de-industrialize and de-civilize and deal with crop yields that are one-quarter to one-third of what they used to be so you can have famine and a population adjustment if you want to use the technical term or you can use coal the united states is the first world country that is not only self-sufficient in this stuff but because it's the first world country closest to the equator has the most solar radiation plus it's got the wind belt in the great plains the united states can go green we probably will to a certain degree but most of the rest of the world is moving into a more carbon intensive future because of lack of choice which you know sets us up for some potential climate catastrophes that will affect the rest of the world more than the united states there are a bunch of questions related to covid and so instead of asking them sort of one at a time why don't you just give us your sense of coven now this book you know you've been writing for a while and along comes covid how does that impact your prognosis uh for global order or disorder well it's damn inconvenient because the book only came out in march [Laughter] but most of the transitions that i'm talking about whether it's because of the american shift or the demographic change were supposed to happen this decade and based on where you were on the planet and what you were dependent upon or not dependent upon and what your population structure looked like that could happen in 2021 it could happen in 2020 20 2029 uh or somewhere in between what kovid has done has robbed the world of the year 2020 for economic development or growth or transition and honestly with the way the epidemic is playing out 2021 is probably a loss as well so if you were a country that was going to face this big transition in 2022 to 2025 you just lost two years you'll never recover to where you were in january much less have the capacity to do any sort of even semi-orderly transition to a world without mass exports to a world without a global energy market to a world without american security overwatch so we're gonna see a compression of time frames for a lot of what was in the book uh the bigger inconvenience for me is my next book was supposed to be on what happens after this transition and even if i had it finished today it takes a year to publish so we'd probably not be able to uh get it out there before this transition was over so we're we're looking at everything particularly in the east asian room with the chinese and particularly in the eurasian space with the russians and the germans happening probably within the next 48 months there are a few questions related to india and i noticed that india isn't one of sort of the big places in this book that you talk about you have even mentioned in your presentation obliquely so where does india fit into this especially in the context we have one question you know saying you know is india along with sub-saharan africa the last bastion of fast consumption growth on earth all right well let me start with sub-saharan africa sub-saharan africa is absolutely not a bastion of fast consumption growth uh that is a pure factory demographic uh and not in africa uh africa's geography is very difficult it's a series of stack plateaus there's no integrative infrastructure excite from a few tap lines that come in from the coast uh africa today is growing because of the baby bust in the developed world there's a huge number of people in the rich world that are in their late 50s and early 60s on the edge of mass retirement their investments for retirement have pushed down the cost of capital some of that capital has made it's into sub-saharan africa where it's spawned an infrastructure and consumption boom but that is done in two years and any infrastructure that is not completed and any economic processes that are not self-sufficient by that time two years are done so africa is unfortunately a special case india is different i i'm more hopeful for india now their demographic structure is very similar to turkey it's very similar to mexico relatively young it's still aging but not nearly as fast as what we're seeing in europe or east asia uh so you've got a population boom that's sustainable there the problem they have is geographic two pieces to that first of all uh the ganges is a temperate zone that really doesn't have a winter so fantastic agricultural capacity but it's not navigable so capital generation is incredibly low at sub-saharan african levels and if you take very low capital availability per person and combine it with very rapid population growth you get endemic poverty in addition geographic problem this is a place that if even if pakistan didn't exist and it was all indian territory it's still blocked by mountains and jungles and deserts from expanding so india is very static in geopolitical terms so bottomless population bodily bottomless population growth bottomless poverty and a geographic trap that means that india never really joined the american-led order they were too statist they never really rejiggered their population structure or their economic policies to take advantage of global trade which means that when global trade goes away they don't have that far to fall it'll still hurt and it's going to hurt everybody but india's position is static it's been static for 1500 years which means as the rest of the world collapses and reforms india's kind of it's in its own little pocket it could be better but wow it could totally be worse india is also the first major country on the trade lanes that come out of the persian gulf so they're unlikely to ever face an energy crisis so if you're one of those people that is a perennial india bear sorry india has looked like this for 1500 years it's not going to change it's going to be okay but if you're one of those people who buys into the shining india rhetoric i'm sorry india has looked like this for 1500 years it's not going to change and compared to the rest of the world that's borderline glorious okay so we have a question about technology military technology and the question is that general mcmaster has spoken about u.s over reliance on exquisite defense technologies including super carriers and a related vulnerability to asymmetric tactics and technologies what is your take on this concern let me start with the uh carriers the ford class which are very cool pieces of hardware like oh my god these things are going to have lasers in a couple of years that's probably going to be the america last american carrier class so i think the current plan is to have three of those total and then that's it after that the us will probably be segueing into smaller vessels that are roughly destroyer shaped that just carry scabs and scats and scats and cats of cruise missiles keep in mind that you use carriers to project power to establish a new fact on the seas in an area where you don't have any other assets if you're not maintaining a global order you don't need that okay so that's kind of that piece second piece mcmaster in specific and honestly the entire defense industry in general hasn't received updated guidance from the white house for 30 years now their last standing orders were to maintain global primacy that makes sense in a global order it does not make sense if you're doing strategic retrenchment or withdrawal or isolation isolationism or america first or whatever you want to call it and so the united states is going to be already has been withdrawing from the world america right now has fewer troops stationed abroad than at any time since the 1920s and as our policy catches up to the strategic reality i'm really not worried about the type of exposure the americans are going to have when sailing within sight of the asian mainland because they're not going to be sailing within sight of the asian mainland much longer we need to right side right size our military that is obvious uh and some of the platforms we have are not necessarily appropriate to the sort of environment that we're going to be involved in we're probably going to increase the special forces by more than we have drone warfare is going to become far more prevalent and the drones themselves are going to get both much larger and much smaller we already have drones that can patrol for up to a month at a time very soon they will be armed and we already have drones that are about yay big that special forces can carry for recon and targeted kills and those are going to be shrinking down to about like that so you can just release a pocket full of them and like you know take out everybody in the building but the era of the aircraft carrier as important as that is and as long as it's lasted is going to end in the next 25 years now i don't think it's going to end in combat because most of these scenarios that i've read about how the americans couldn't win a naval war with china assume hilariously two things number one that the american navy has to be able to operate without impunity within sight of the chinese coast at all times and two that is america's navy's responsibility to safeguard all trade in and out of china while fighting china sorry that's asinine if in the incredibly unlikely scenario that the americans and the chinese actually cross swords the americans would do the same thing the japanese would do we'd just stop shipping in and out of the country and do a few targeted strikes at critical infrastructure and the lights would go out and it would be over uh you'd basically sink everything that the chinese have passed the first island chain in the first few days and then you start dynamite fishing within the first island chain it'd be an easy easy easy war i don't think it's gonna happen because the chinese aren't stupid so we have a question that applies your assumption to the middle east that the united states is stepping back and it's not taking the responsibility for security regional security so the question is that in that kind of environment uh you know what it what does the national security of israel look like short version israel is probably fine uh they've already cut a deal with the saudis so they don't have to worry about any sort of energy shortages regardless of what happens with the regional geopolitic or whatever happens in the black sea with the russians or whatever else uh number two i think it's highly unlikely that the turks are going to have any sort of long-term tif with the israeli so it just doesn't serve their national interests there's obviously some some good rhetoric that can be gained from being an anti-zionist but i don't think that's going to be something that is what the turks are going to base their national policy on so the biggest problem that the israelis actually have is food supply they only grow about 20-25 of their own food and even that is with extensive subsidies and irrigation luckily for the israelis the europeans are a mass exporter so with only 7 8 million people it's fairly easy to manage that import structure that leaves israel kind of in the perfect position they've uh managed to resurrect their deal with egypt so that security threat is gone syria has fallen apart it's a failed state lebanon's a failed state so there might be some parallel military stuff hezbollah-like stuff but that while strategically annoying is not a strategic threat to the existence of the country jordan's already a functional satellite saudi arabia the biggest checkbook in the region is broadly on their side and iran is a long way away uh that's a pretty good position to be in all things considered so we have a question about uh eastern and central europe and it's uh what what do you think about hungary and russia colluding to partition romania meaning transylvania the hungary everything under the the serbian gap to russia and leave a weak balaykia as a buffer sure uh i don't take that too seriously um hungarian nationalists have always been cartographically creative and it usually doesn't come out into the something and the fact that they have to partner with another power gives you an idea of what their local strength is hungary's demographic situation is among the worst of europe they know they can't do it themselves russia has no problem taking best arabia if they thought they could get it but first they have to get to ukraine and it's not that that's a military obstacle it's just that in the process of doing that other countries are going to act so if the russians did start moving in that direction probably the first thing you would see is that the turks would cut a deal with both bulgaria and romania to establish kind of a hard line up at bess arabia because turkey is the regional power that would suffer from that sort of rearrangement the most and that is something that the hungarians absolutely would not like to see but it's not like it threatens hungary directly so we'll probably get some sort of neo-turkish neo-imperial turkish system in the lower balkans in the eastern balkans uh assuming that that was tried well now we might get that anyway from an economic point of view that honestly is the economic or the imperial expansion that makes the sense most sense for the turks the balkans are far richer than the middle east at large and if you're looking to secure kind of an outer buffer versus potential rivals that is the one that makes the most strategic sense uh you'd also if you want to get really creative if the russians did start moving that you'd probably see turkish troops uh conquering the yalta or sorry the crimean peninsula in a matter of days they've got the sea lift capacity they've got the air cover necessary and they would have the allies that they would need and if you can get a turkish footprint there you can guarantee that the russians were remained unanchored in the eurasian step forever and that was something that would absolutely speed the russian collapse so there's a question about the global financial system and does the disorder that you talk about lead to the collapse of that global financial system and will financial sectors in the united states uk and other places collapsed as a result what sectors will rise as a result of the division well that's like two-thirds of what the next book is supposed to be about so let me give you kind of a short version uh what we have seen under covid is that even with the us economy suffering and arguably suffering more and longer than most of the advanced economies the capital flight still floods in so congress has approved about three and a half trillion dollars of deficit emergency spending so far and we're only two months in there's at least another two trillion coming over the summer there'll probably be more after that all of that is driven by deficit spending about two-thirds of that is being paid for by foreign capital flight into ust bills so if we're moving into a world with less global structure we basically are entering a world of de facto dollarization i mean you got to look at the competitors the european union as the euro has kind of become a joke they just can't even function in terms of currency policy because of what's going on with brexit the pound is no longer perceived as a store of value in canada we've got a de facto rebellion coming up between the prairies and eastern canada so canada is questionable as a store of value of the hard currencies the largest one that is still in a country that is perceived as politically unified and economically functional is australia australia exports raw commodities and in an environment of a global breakdown we're going to see a lot of the values for that go down after australia you hit sweden and i'm sorry that's just not enough of the other major currencies the japanese are barely internationally traded and the chinese keep their system under a complete lockdown every time they try to open up a little bit they lose a couple of trillion dollars in capital flight mostly to the united states and so they lock it back down so the us dollar is not going anywhere we're seeing a de facto dollarization of the system right now without any sort of conscious policy from the united states imagine what happens if there was a conscious policy from the united states uh that does mean a lot of things are going to shift around if you break down the euro system obviously the capital flight will increase and you'll have a split in currency values between countries like germany and countries like italy that widen considerably and drive the continent apart economically that's basically an end to those kind of financial markets for the excuse me it's going to hit every economic sector differently energy we go into a regionalized system or some sort of neo-imperial expansion in the middle east in order to get the crude in manufacturing you get a breakup of the long gangly supply chains we've become used to as international transport is no longer safe for cheap that argues for regionalization of supply chains much closer to points of consumption that would argue to do very well for places like mexico or turkey or india or the united states uh in terms of lost attraction agriculture probably half maybe two-thirds of the food that is produced right now can only be produced in the volume that it's being produced because of internationally traded inputs that are relatively low-cost historically speaking a lot of that goes away that's a very technical way of saying that a billion if so people are going to starve because of a lack of production and you can just go down the line of any other economic sectors you're really interested in we'll we'll jump to uh the second question because we've got a lot of them so you don't mind um so there's a question there actually more than one about refugees and i'm just going to sort of paraphrase all of them we already have a refugee crisis and people displaced you know whether internally or beyond borders uh the disorder that you're talking about what does that do to the refugee crisis uh you know intuitively one would think it would make it worse what is your view on that considerably worse one of the things that has prevented refugees from being a major factor in the global system for the last 70 years is most wars were preempted or blocked by the united states and it's the americans withdraw you're seeing areas that were geographically questionable kind of falling into disrepair first that's afghanistan that's kurdistan that's iraq that's syria that's libya as that withdrawal accelerates as credit becomes less available as export options become less available as populations break down due to age domestically as international trade reduces the capacity to earn a living as breakdown of international trade prevents the ability of agricultural to generate the food stuffs that are necessary on a local level you'll see more and more and more state failures that would suggest that a broad swath of sub-saharan africa is in trouble that would suggest the north african tiers for the most part in trouble that would suggest that states that are in pressure cookers are in trouble and unless you have the financial capacity of dealing with this sort of environment where the cost of everything that makes a state function goes up in an environment of less security you're going to be genuine refugees so i'm particularly excuse me i'm particularly concerned about egypt despite its geographic isolation it's hugely overpopulated it can barely feed its people right now and the changes that we're seeing whether the climatic or economic or demographic or trade related all argue for impoverishment and even if you know one percent of egyptians leave that's already almost as big as what the outflow from syria has been i'm concerned about countries that are going to be on the periphery of some of these new neo empires based on which direction based on which direction the russians go they could generate huge waves so if if the rush if the i'm sorry not the russians based on which direction the turks go if the turks move into the balkans it'll be as partners that'll be pretty stable but if the turks move south into iraq and syria they're not going to have a lot of patience for the arabs much less the kurds and god forbid the turks move east into either northern iran or the caucasus where the math is just going to be completely different so we're going to have states that disintegrate and we're going to have states that fall to outside predation in asia southeast asia writ large looks pretty good but china doesn't it's been a long time since the world has heard of a refugee flow from the from chinese territory but it's going to happen the question is where is it going to go we have a short question but the deep one it's it's basically asking what comes after neoliberalism yeah that's that's the primary topic of the next book uh here's here's the issue we know that we're facing a demographic collapse this decade we know we're facing a structural collapse this decade those two together change the economic model that we've been familiar with not just neo-liberalism neoliberalism capitalism fascism and socialism are all predicated on the concept of more the idea that with every passing year every passing generation we will have more interconnectivity more resources more consumption larger populations and we've been living in this era of more since the time of the columbus expeditions everything we know about economic history is an argument over how to parcel out more more is over this decade we flip and we deal with an era of less fewer connections smaller populations less consumption less interconnectivity we don't have a framework for how to do that so will neoliberalism end yeah so will fascism so will communism so will socialism and we're not going to figure it out on the first try two other thoughts bright or dark based on your point of view the united states is aging the least slowly i'm sorry the least quickly and so will be the last man standing in the old system so the united states will continue to have more for some time and its integration with mexico buys it at least a couple of decades so the united states is not going to have to deal with this sort of collapse until at least the 2040s probably considerably after so americans and anyone in their sphere of influence can watch what's happening in the rest of the world and maybe learn a few lessons second this shift from a world of wars happening exactly the same time that the global structures are breaking down and the last time we had this sort of churn in the global strategic environment was the period from the 1870s to the 1940s when a number of different isms nazism communism for example clashed over what the correct economic model was we now get to see that happen in a world where more than one region is industrialized and if we clashed so vigorously back in that period over the concept of more imagine what's going to happen when the dominating theory is the concept of last that's my biggest fear for the next 20 30 years a related question the world's intellectual capital has been moving to cities how does that mega trend factor into your analysis well kovid's certainly knocked it down um the idea that you concentrate populations in order to have better city services at a lower cost you know it's just basic economics it doesn't work with covet at all new york is probably going to be one of the last metro regions in the united states to recover simply because everybody has to use the metro to get around and nobody wants to get into it uh for for obvious reasons uh we're going to see some echo of that everywhere else but the real hit to cities wherever they happen to be especially in the eastern hemisphere though is when we have global agricultural problems because people who live in sydney's all have one thing in common they can't grow their own food and if we start to have agricultural shortages then a lot of the people who kind of live on the margins have no choice but to move back to the countryside in order to grow their own food and the more people who do that the more food that is not these are spoken for and is not available for the cities now stalin's approach was collectivization which was a humanitarian disaster but it kept the cities fed and if we're dealing with an environment of less you should start thinking about some of how should i say stalin's reinventions of what we thought of as normal as options that countries are going to be forced to consider in order to maintain modernity because the alternative is going back to a neo-subsistence existence and no country is going to do that willingly so there are some questions related to southeast asia um and i'll just sort of summarize what significance will oceania oceania and the southeast asian region have under the new world under the new order i'm we're particularly interested in what happens to australia and indonesia sure let me dispose of oceana real quick just so you know where i'm drawing the lines uh southeast asia i start papua new guinea go to myanmar go to vietnam that triangle you know the major states i'm very bullish on that chunk oceana the smaller island states they really can only exist as protectorates some of them will obviously remain within the american sphere of influence but only a few in micronesia really the others have to look to australia in new zealand so um that said oceana not big enough to really matter except as a as imperial bases and the australians then the kiwis and the americans will probably be able to prevent extra regional powers from doing what they used to do in the 1800s so as long as you're in one of those three spheres of influence you're probably okay southeast asia i'm very bullish on southeast asia it's population structure for the most part is young and growing its industrial plant is right now integrated in chinese and japanese and american supply chain so it's going to be relatively easy to retool that to whatever the new future happens to be whether it's japanese letter american-led and most importantly these countries are broadly as a unit self-sufficient in energy and food stuffs so it doesn't take a lot of integration between them and another country or region in order to boom and uh with the australians right there being able to export the raw materials to this region they'll be able to experience kind of an echo of the panda boom of china but perhaps not from a sound or economic footing so i think southeast asia writ large has a pretty bright future covid's obviously getting them off to a bad start but overall i think it looks pretty good australia new zealand let's start with australia i haven't had a recession in 30 years largely because of price insensitive purchases of the chinese that is going to end in the next couple of years there is going to be a global adjustment aka a depression during the interregnum there is no way that the australians get out of that without a hell of a lot of pain so they're going to probably experience something nearly on the catastrophe level of the great depression but on the back side of this once they've kind of sorted out their housing must mess which is far worse than what the u.s did with subprime they will be able to grow again because they have that southeast asian partner and i think australia's future long term looks very bright new zealand is unique in so many ways it has no security threats it's land is so productive that it's the lowest cost producer for almost every food stuff that it generates and then of course the people are wondering from wonderful in the country is beautiful there are only five million people however so the leading a leader in the region they cannot be uh but as a counterpoint to all things australian as a partner to all things australian uh this is a country that's still going to do very very well the the internationalization however that we have seen of the new zealand economy of late is probably going to get dialed back but considering that the growing markets are so close to them i think they're going to do fine we're almost at the end and we're going to have one last question for you before we let you go um you uh a critique that we often hear for people in the geopolitical space is that they really over privilege geography and i want to get your thoughts on you know that critique you know people would say well you know peter and you know everybody else who does geopolitics they just they just look at geography as very determinate and you know there's more than geography so that's one and then related to that is uh the final question is so where is the u.s in all of this disorder what is your sort of brief prognosis for what will happen to the u.s let's start with the u.s the us geography is great the population structure is stable it doesn't need trade relations with very many countries and uh say what you will build the trump administration and there's so much to say about the trump administration it has managed to hammer out trade deals with korea japan canada and mexico already and we'll have them with the united kingdom by the end of the year that's half the trade portfolio you add in the disruption of kovid and the united states can basically leave the world and not feel the difference so the united states is going to do just fine it doesn't mean that it won't poke its fingers and things around the world from time to time but it's going to be at least another 20 years before the u.s ventures out in any sort of meaningful strategic manner on the scale that we've become used to so uh still a giant a stable giant a growing giant but a retreated giant for a generation what about the debt you know there's a there was a question about the debt that i forgot to ask as long as the u.s dollar is the global currency uh that that really doesn't matter and i'm a fiscal conservative it kind of calls me to say that uh and if there's anything that covett has shown us it's even in a time of moderate geopolitical distress everyone puts their money here can you imagine what it's going to be like once currency regimes start to fail which gives the united states extraordinary latitude japan right now has a national debt that's about twice that of the united states and they're not the global store of currency so the us continue can continue running deficits like it has under trump and obama for at least another 40 years before it reaches a point that it's likely to be an issue now is that the best use of our money absolutely not if we had stuck to the clinton era program of fiscal prudence uh we not only would have paid off the national debt by now we would have paid for the entirety of the baby boomer retirement our the u.s economy would probably be 15 trillion dollars larger now than it was then or than it is i'm sorry would have probably been 15 trillion larger today than it would have been otherwise uh that would have been amazing uh opportunity missed but hardly a national disaster and the other question was geographic determinism right yes okay uh well one it's really hard to argue that geography isn't the single most important factor affecting countries over the long run you're not going to grow a lot of crops in the desert and if you're a farmer in the midwest you're gonna be able to export your grain down a naturally occurring water wave for free and the amount of income that will come from that will be legion that's what paid for the development of the united states um it's not the only thing now i would underline two other issues number one is demography because if you don't have enough young people to be consumption led that puts you in a different economic basket that makes you vulnerable and second leadership does matter you do get the rare leader who pops up from time to time who is able to take the country in a new direction or make use of geography in a new way or buck the odds and so countries like uh south korea should be failed states but they've had a secession of leaders who were sufficiently visionary and aware that they were able to make it the fifth largest exporting power now whether or not that is sustainable in this new era we're going to is an open question but koreans have definitely learned how to make the most of what little they have and turn themselves into a trans shipment point and a manufacturing powerhouse but leaders like that are rare not everyone is an ataturk not everyone is a stalin and as we've seen in the country with as good of a geography as france recently you know sherock was very very good until he wasn't uh and he managed to lead france to be at like the pinnacle of international diplomacy and then he made a series of bundles and france fell to much further lower than he had started at leadership is quirky and leaders die and they slip in the shower and they full-on bullets and they are not a reliable measure of power but over the short term days months sometimes years they determine everything but over the longer term it's demography and geography which is one of the reasons i focus on the decade time horizon or longer as opposed to next tuesday well peter uh you know when you're having fun you know you don't want it to end but you know everything comes to an end and so is this session i can't thank you enough for taking the time out and this has been a fascinating you know journey through across the planet and back and and the future that that we're looking at um folks that was peter's zion he is the author of ungoverned uh in un uh this united nations i'm sorry the scramble for power in an ungoverned world if you haven't gotten the copy yet please do there's a lot more in here than we could have covered in the 90 minutes uh we will continue to bring you other speakers like him but it's difficult to uh you know make comparisons because everybody has you know we try to bring you know has a strong spot so this is kamran buhari signing off for right now and watch out this space for future webinars book talks and other panel discussions take care

Channel: Newlines Institute for Strategy and Policy

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Id: F68RLLXSJLU

Length: 92min 16sec (5536 seconds)

Published: Wed May 27 2020