Predicting De-Globalization - Peter Zeihan (Part I)

The Creation of Order and Disorder

This is the second installment in a series on analysts who were relatively early in predicting de-globalization.

Peter Zeihan has become a bit of an internet celebrity over the past few years for making bold predictions about the future (many of which appear to be panning out), his breadth of knowledge about the world, and his uncanny ability to have an answer for almost any question he is asked about any part of the world. It is clear that Zeihan has a powerful and clear conceptual model of the world which he is using to understand where things are going. It seems that that model places great emphasis on variables, like geography and demographics, that rarely ever change. Their stubborn-ness makes them unavoidable constraints that all societies must plan around; all change must adapt to them, not the other way around. And, in the rare moments when there is even a slight shift in these tectonic plates, they send shockwaves through the entire civilization. Zeihan believes we have entered such an era today.

Let’s make a deal

Before getting into the nitty gritty of geography and demographics, though, we must begin with history. In March 1946, Winston Churchill delivered his famous Sinews of Peace address in the United States, proclaiming to the world that an “iron curtain” had descended over Europe. World War II was barely behind us; various parts of the globe that had been devastated by war were still surveying the shambles, trying to chart a course forward. Amid this environment, Churchill came to the U.S. to offer a warning about Soviet efforts to consolidate power in Eastern Europe, the imminent threat of a bifurcation of Europe along ideological lines, and the need for strong ties between the British Empire and the U.S. (or, as he called it, “the English-speaking world”) to check the growing power of Russia.

The stage for the Cold War was set. The U.S. emerged from the war as the leading military, industrial, and economic power in the world. The U.S.S.R. emerged as the only legitimate rival military and industrial power with a massive geographic footprint, abundant natural resources, nuclear weapons (which they developed soon after the war), global ambitions, and a world-view and value system that was significantly at odds with the United States’.

Both countries understood that a hot war would be catastrophic for them and the world. What ensued was a race for global influence. In order to win friends over to its side, according to Zeihan, the U.S. made a very enticing open offer.

It went something like this:

- We will use our military to protect the world’s oceans for economic trade for our allies

- We will open our massive consumer market for our allies to sell into and grow their economies

- Our allies will side with us against the Soviets and defer to us on strategic security issues

“This world system was put into place 70 years ago. The core of the international system during the Cold War was the Americans’ support of the global trade and security order. The Americans agreed to provide global and regional security to their allies in exchange for deference on security matters. When issues of economic import rose to prominence, the Americans tended to give way. When issues of strategic import rose to prominence, the Americans tended to get their way because that was the deal.” (Link)

I’ve found this to be a powerful framework as it frames other events like the Bretton Woods agreement, the formation of the U.N., and the Marshall Plan in an interesting light. It also provides a detailed blueprint for the broader “containment strategy” vis a vis Russia, which was famously articulated by George Kennan in the 1940s.

According to Zeihan, the deal worked incredibly well. Over the next several decades, countries around the world began entering the American-led system. Even if they had no interest in taking a side in the spat between America and Russia, the prospect of growing their national incomes through trade was too enticing a proposition to abandon indefinitely. As more countries joined the system, the attractiveness of the network grew.

“This arrangement froze geopolitics as previously independent countries were pulled into a massive, interconnected system because of not only America’s overwhelming economic and military power, but also the power of the alliance structure it controlled. This was such a powerful force that it even pulled in America’s enemies one-by-one and allowed them to rise, fueled on exports. In the process, the US made the global economy dependent on the relatively free flow of goods, people, and money while also alleviating the need for the large militaries that defined the first half of the 20th Century. In other words, the US and its alliance shifted every global system that mattered for literally every country in the world.”

Losing the plot?

Then, in 1989, the Berlin Wall fell. All of a sudden, America’s only major geopolitical rival was no more. This is what some scholars have termed the beginning of the “unipolar moment,” the emergence of America as the global hegemon.

With no serious rival in sight, America’s ability to maintain a global economic and military order was greater than it had ever been. However, at the same time, it’s interest in doing so was set to decline. With no need to win over allies in its battle for influence with the Soviets, why did America need to deploy its resources to defend global trade and underwrite the growth of the global economy?

America could have decided to leverage the opportunity to more assertively shape the world according to its vision of the Good. But, according to Zeihan, the American people weren’t very interested in such ideas, too absorbed perhaps with internal issues and trying to win individually in the game of markets. According to Zeihan, George Bush Sr. tried to start a national conversation after the Cold War about how America wanted to use its power to shape the world…and he was voted out of office for it. Every subsequent president learned the lesson, the American people weren’t very interested in world building.

As a result, the global system entered a kind of steady state. America remained as the hegemonic pole of global power, with all countries adjusting their foreign policy around it. Global trade was sustained and countries that took advantage of it continued to grow. America did intervene militarily in certain parts of the world, but did so reluctantly and with an eagerness to exit, rather than stay and establish dominance. The events of 9/11 did shock America into a more interventionist position vis a vis the world. But that interventionist impulse remained relatively contained to the Middle East and didn’t expand into a project of assertively using its power to unilaterally shape the global picture.

It is not that such conversations never happened. Among elite circles, there were likely debates around what a new global order should look like which were deeply intertwined with ideas of how America should use its power*. But, because the average citizenry didn’t care much for the subject, the political class was not willing to risk political capital to make any significant changes to American foreign policy, to assert some kind of new identity of America as a world builder.

Hence, things sort of plodded along for a couple of decades until the 20-teens. That’s when a few things happened that jolted the system in a new direction. First, frustration regarding growing wealth inequality and the hollowing out of America’s manufacturing base began to boil over among large segments of the population ushering in dramatic changes in political discourse. Also, policy makers and other institutional leaders seemed to suddenly realize that China had arisen as a “peer competitor” on the global stage…and the CCP didn’t seem so interested in the whole “liberal free-market democracy” thing.

Moreover, a narrative began to form that America had actually facilitated the rise of its own competitor, that American policies had allowed China to grow and squandered America’s relative geopolitical dominance. This would obviously be seen as an embarrassment for those decision makers. Analyzing this narrative from the historical framework that Zeihan lays out, one can conclude that it is both fair and unfair. During the Cold War, the whole point of setting up a global trade regime secured by American military force was to allow American allies to grow their economies through export in exchange for joining the American side. Helping your allies grow their economies was part of the plan. However, after the Cold War ended, the justification for continuing such a policy, when looked at from the American security point of view, is more shaky. At best, it was based on an assumption that as other countries grow they will become more like the U.S. and hence naturally more friendly. An assumption that many would consider naïve today.

And so, both among the common populace and the decision making elite, a strong anti-globalization strain of thought began to take hold. According to Zeihan, whether Hillary or Trump won in 2016, the American government would have begun a more concerted effort to pull back from and re-engineer the global system of trade that it had put in place so many decades ago. Of course, the details would have been different and that does matter. Trump won and launched a direct trade war with China, refreshed NAFTA, and began pushing NATO allies to pay up, among other things. Biden followed and has, according to Zeihan, continued and even intensified the nationalist economic orientation of his predecessor.

We’ve established the historical-political framework that underpins many of Zeihan’s predictions about the future course of the world. The system of relatively free and safe global trade that most of the world became used to over the past several decades was created out of a security (i.e. not an economic) strategy to contain the U.S.S.R. Americans’ belief in the usefulness of this system for themselves has run its course and the country no longer has the will to support it. As the Americans retreat from defending the global system, no other country will come in to take its place. The system must dis-integrate going forward.

This provides an explanation for why de-globalization will continue to happen. But how did America come to be so dominant in the first place? And how is it that America is able to retreat from this inter-connected system without harming itself? These are obviously complex questions, which will require further exploration of history and politics. But we can also find clues by turning our attention to the “tectonic plates” mentioned at the beginning of the article: namely geography and demographics.

We’ll explore these in Part 2.

*There is a view of American foreign policy over the past few decades that describes America as a “neo-imperialist” type of power which stands in contradiction to the picture that Zeihan paints. This view, as I understand it, proposes that America, and the West generally, through various institutions including domestic government and defense agencies, to international bodies like the IMF, World Bank, WTO, and an ecosystem of NGOs and think tanks has attempted to push various countries around the world to reform their societies and institutions in ways that are more appealing and comforting to the West. This behavior is often seen as more subtle and indirect than, but equally as insidious and disrespectful of national sovereignty as, traditional forms of imperialism and colonization. I think it would be enlightening to try to reconcile this view with Zeihan’s view of American foreign policy since the Cold War as largely apathetic and disinterested in world-shaping. I do believe that a reconciliation is possible. However, I’ve chosen not to attempt this here; the purpose of this article is to try to explain Zeihan’s framework as well as I can. I’ve tried to stick to that mandate.

Some disclaimers are in order: Firstly, I have not read any of Peter’s books although I do intend to do so eventually. Whatever I’ve written here and in Part 2 come from several hours of listening to and reading online content. I believe that’s given me a decent overview of his thought which I’ve tried to present.

If you disagree with the way I’ve characterized something here, or you have a different take on world affairs than Zeihan, please share in the comments section; I’d love to start a dialogue.

Also, it appears that Peter recently appeared on an episode of Rogan. I haven’t watched the full thing, but from the few clips I’ve seen on Youtube, it seems like Joe asked some fairly…unorthodox questions relative to what Zeihan is used to. I’m looking forward to checking out the whole thing myself. Regardless, that appearance means the mainstream discourse will be even more aware of Zeihan’s views than it was before.

Would also recommend you check out Zeihan’s main website — https://zeihan.com/ — where he has posted a generous amount of content free of cost.

I should say once more, at the risk of sounding redundant, that this article is not meant to be a critique or an endorsement of Zeihan’s views. I’m simply trying to explain them as I understand them. While I find many of his ideas compelling, I am still a beginner in this subject and am not in a position yet to effectively critique or endorse these experienced analysts.