Apr 2
Failed World Economies Cause World Wars. And We've Got One.
The Three Problems Facing the West — And the World
Russia's bloody war in Ukraine marks a turning point in modern history. It's the first large-scale war on European soil since the last World War — and around it, the world as we knew it is slowly starting to spin in a different direction.
The political and economic order the West imposed on the rest of the world — globalization, neoliberalism, call it what you like — is now unravelling. And in its wake lie the seeds of everything from another world war to an age of chaos and conflict.
The West — and the world — now face three different and distinct threats. They go like this. The world's authoritarian regimes — and the engines of American globalisation — are beginning to ally against the West. Meanwhile, it's questionable whether America and Britain — the West's post-war leaders — are going to be capable of leading the West for much longer. And atop that, the rest of the world, caught in between the West and the authoritarians, is largely indifferent, because it has mixed emotions about whom to support and why.
Let me simplify those three threats. The West is fractured and riven. Meanwhile, globalisation — the economy it designed — has turned against it. And alongside that, the West's "soft power" has waned, as American political scientists put it. Those three threats raise significant questions for the West. What kind of world does it want? What is its vision for a political economy in the 21st century? Does it have one? Because "buying resources from hostile, regressive authoritarian states and goods made out of those resources" isn't one.
Let's take those three threats one by one.
The war has gone terribly for Putin. Instead of storming across Ukraine, and installing a puppet regime in days, it's more than a month later, and Russia's on the retreat. The Russian army has been revealed as incompetent and flat-footed. Yet even despite all this, a political realignment is beginning to happen. India openly supports Russia. China says the right things to the West, the things the West wants to hear, but goes right on supporting Russia, too.
This is the beginning of the formation of a political axis. An anti-Western one.
Are you old enough to remember the term "BRICs"? It's what financial types used to throw around a decade or two ago — an acronym for Brazil, Russia, India, China. They were to be the world's next great engines of growth. Today, strikingly, they're all authoritarian states.
That's not a coincidence. It's a relationship, a crystal clear one. What happened to these nations, especially Russia, India, and China? Think about the role they play in "the world," by which we Westerners really mean, without thinking about it, "the global economy we designed."
These nations are the linchpins of globalization. Russia provides the resources — oil, gas, coal, steel, nickel, iron, wheat, and many more besides. China takes those resources, and transforms them into the everyday stuff that we in the West take for granted — everything from electronics to household good are made from them. Literally anything plastic you buy from Amazon or Walmart or what have you that's made in China has a pretty good chance of being made of Russian oil. To coordinate the buying and selling of all this stuff, India is globalisation's "back office" — it runs the technology and accounting and finance and even the legal contracts and so forth.
That is the "global economy" the West designed. Russia provides the resources. China transforms them into goods. India handles the technology.
Now. What did that global economy — China manufactures, Russia resources, India clerks — result in? Who did it work out for?
We Westerners enjoy the fruits. Our lifestyles are opulent, abundant in artificially cheap goods, made in China of plastic, aka Russian oil, sold to us via Indian server farms and call centers and what have you. Nobody in history has ever enjoyed such an abundance of stuff as us Westerners — shelves piled high at superstores the size of warehouses.
But though we Westerners — especially good liberals — think of it as a great success, the reality of this global economy is dire. 20% of the world — that would be us in the West — consumes 90% of its resources. That leaves just 10% for 80%.
In other words, the global economy we designed — "globalization" — is, in any objective terms, a shocking failure. It's incredibly, profoundly, mind-bendingly unequal.
Imagine that I came along and offered you the same deal the global economy does to everyone who's not the West. Hey, I'm going to take 90% of your resources — and in return, pay you a pittance. You'll only be left with 10% to live on. Sound fair? Hey, it's better than slavery! It's a better deal than us colonising you! That's what Amartya Sen, the Nobel Laureate, calls it the greatest mistake of Western economics — imagining that a deal is fair just because "at least it's not slavery."
So what happens when a global economy is this unequal? Well, as you can imagine, the rest of the world — the 80% who are only left with 10% of the globe's resources to live on, while we Westerners live our ultra-opulent lifestyles, having monopolised 90% of the planet's wealth — is left pretty unhappy. They end up thinking "Wait. We're getting a raw deal!" That's because they are.
Now let's come back to how Russia, China, and India — the former "BRICs" — are the linchpins of globalization. Are you beginning to see the problem here? If not, let me make it even clearer. Russia provides the resources. China provides the blue collar labour. India provides the pink collar labour and technology.
Globalisation promised these countries that they'd get rich. But they never did. Instead, they are still mostly crushingly poor. And along with that poverty came a backlash, in the form of authoritarian politics, which rose in each of these countries — again, not a coincidence, but a relationship.
Take Putin's rise. It came after Russia experienced an incredibly painful decade. The Soviet Union had fallen. Instead of a Marshall Plan for reconstruction, or integration into Western institutions, Russia was forced to liberalise its economy at light-speed — the condition of bailouts from the IMF. Its currency was attacked by hedge funds. Hyperinflation set in. And then it defaulted on its debt in 1998. Putin rose to power in 2000 — precisely because by this point, the country demanded a strongman who could restore some form of order to this utter chaos and ruin.
China's story is similar. How did China become globalisation's factory floor? China wanted to open up, after decades of being a closed communist society. And the West looked the other way, conveniently, when it made trade deals. It only cared about cheap labour — not rights or democracy or development or anything else. It didn't say, for example, "OK, to trade with us, you need to give people these rights, and ensure this level of democracy, and we'll pay you fairly to do all that, too." Instead, the West paid China as little as possible — and turned a blind eye to any consideration but profit. Remember Sen's fallacy of "at least you're not a slave"?
Globalisation has failed these countries, and failed them badly. That is why it is now unravelling. That's why in each of them, an aggressive, bombastic nationalism has set in. In Modi's India, fanatics take vows to kill religious enemies. Xi's China regards the West with open contempt. Russia's already attacked Ukraine.
So what's happening here is a kind of disjuncture. These countries, economically, are still the linchpins of globalization. But politically, they are changing, fast — reverting back to nationalism, hostility, and discontent with the West, which is only understandable, because, well, it ripped them off badly and deliberately, too.
We're therefore in a strange position. A conflicted one. You can see it most clearly in the example of Europe still having to rely on Russian oil — even though it doesn't want to. That's the disjuncture I'm talking about. Politics changes faster than economics. In this case, the global economy the West built now has to be deconstructed by the West — before it's dismantled by aggressive, authoritarian hostile states, through war and violence, like Russia's war on Ukraine, instead.
Globalisation has failed the West, too. You only have to look at America's shattered interior to see it. It used to be full of proud middle class towns that made stuff — everything from cars to engines to refrigerators. Those towns are mostly dead, ghost towns, full of addicts or fanatics or both. Making China the factory floor and India the office of an economy and Russia the resource provider was a bad idea for the West, too. The only people in the West who really benefited from globalisation were in politics, finance, real estate, and lobbying — the blood money poured in, and they made fortunes. Inequality spiralled. But the working and middle class became one vast underclass. And as the middle and working class died, they turned to demagoguery.
All of that brings me to my second point, which is that it's questionable how much longer American and Britain can lead the West. Take a hard look at America's political situation — a realistic one. Biden's done a good job with the war. And yet his approval rating is still underwater. Ironically, it's Putin who's seen a groundswell of support — not Biden.
That bodes ill for the future. How dumb are Americans, even? Dumb enough, it seems, to re-elect Trump, to turn Congress into a GOP stronghold. That much seems almost inevitable at this point — it's difficult to see how the Democrats stay in power. The Republicans have a permanent advantage that has never really gone away in America — which was a conservative country, but now, politically, is beginning to resemble Russia. It's turned hyper-conservative, nationalistic, backwards to the point of one party and it's grass-roots base openly rejecting democracy and advocating violence.
What happens if Trump — or someone like him — takes power again? Not to America, but to the West? If Trump has been in power now, Putin would probably have been at the gates of Poland. Trump is on Russia's side — and so is the GOP. They wouldn't have armed Ukraine, sanctioned Russia, frozen its currency reserves, and stopped Putin in his tracks. Trump or his ilk wouldn't have given speeches shoulder to shoulder with NATO's Secretary General or the EU's senior officials. They would have told Big Lies about Russia being the rightful party — because that's exactly what they're doing now.
So how long can America really lead the West? The rest of the West is probably already planning for a scenario where America isn't on its side anymore. A future where an ultra-conservative America — the kind of place where vigilante justice against women and kids is the norm — is openly hostile to not just Western institutions, like NATO and the EU, but Western values, like equality, freedom, justice, openness, truth, gentleness.
That future seems almost inevitable now. What does the West look like without America and Britain? There's no good answer yet, really. One part of it is that Europe invests in its own armed forces again. But beyond that, it seems too worrisome to really think about. So let me make it a little clearer what that future probably looks like.
America is turning into a country much, much more like Russia than like the mature, healthy social democracies of Europe. It's openly hostile to everyone from women to kids to the LGBT to immigrants and minorities of all kinds. It's open season, more or less, on anyone who's not pure of faith or true of blood. Rights are being reversed at light-speed, which took decades to win. America is giving up on Western values.
And as it does, its orientation to the world will change. As it goes on electing the kinds of lunatics who the GOP is now notorious for — alleged sex predators, serial abusers, fanatics who threaten to murder their fellow members of Congress, lunatics who think the state should serve God, extremists who openly applaud a bloody coup attempt — America will not be on the West's side anymore. In the worst case, it openly forms alliances with authoritarian nations — as Trump seemed so eager to do. But even in the best case, it becomes something more like Russia was two decades ago — a force of destabilization, which, because it's openly contemptuous of Western values like peace and justice and equality, begins to grow closer to the world's authoritarian axis than its former friends in the West.
So, again, what is a West without America? That leaves the social democracies of Europe, plus Canada. It means the EU is the last major force of stability and democracy and peace in the world, really. And the EU is not yet remotely prepared to be that. The EU is not prepared, really, for a future in which both America and Russia are openly hostile to it — but that future is very much on the way now. Biden's interregnum of friendship will be just that — because, of course, like I said, Americans are still contemptuous of him, and Kamala Harris has all but disappeared. That's not his fault — it's just a symptom, and the deeper problem is that America is turning ultra-conservative, against Western values, beginning to resemble Russia more than the West.
At this crucial moment in history, no less — think about how ominous that is for the West.
America is beginning to resemble Russia precisely because globalisation failed it, too — triggering just the same vicious cycle of poverty, stagnation, debt, demagoguery, nationalism, and fascism. They are two sides of the same coin. Ironically, that's happening at the moment the West needs it most.
The rest of the world is watching all this — this set of realignments, the BRICs turning authoritarian and hostile, allying against the raw deal of globalization, even if the economics are harder to undo than the politics, wanting more for themselves, even if it means war and conflict and death, while America begins to resemble Russia, at particularly the wrong moment for the West, because it leaves the West leaderless — with a cross of amusement and schadenfreude.
To see it you only have to look at how many countries abstained from condemning Russia at the UN. They aren't doing it because they're terrible people. They're doing it because, well, nobody much has ever cared about them. The West has either ignored them, or exploited them, or overtly devastated them — and now all this smacks of hypocrisy. The rest of the world watched Putin butcher Syria — and then it watched desperate Syrians drown in seas policed by European gunboats, or fenced into threadbare refugee camps where they froze and starved.
You can see why the world thinks there is a double standard here. Now, don't get defensive and point out how Syria isn't like Ukraine. The point is that is how the world sees it, whether or not you agree. People are people, and had the West stopped Putin in Syria, it would have prevented the slaughter in Ukraine. But the sad truth is that Syria's devastation was not enough for the West to act on. And so it's only understandable that the world has heard the message, over and over again: to the West, you're expendable. Your lives don't matter. They have no worth. You're the 80% of humanity who's left to live on the 10% of resources we're generous to let you have — even though they're your resources in the first place.
It's hardly any surprise that the world is watching the West with indifference. The West's global economy has been a disaster for it. The world is remotely equal or prosperous or free. And aren't those Western values, too? But do they only matter for Westerners? And if a value doesn't matter for everyone — then isn't it just a double standard?
The world isn't foolish. It looks at the West and sees this hypocrisy intently. The West talks about peace and freedom and equality and justice — but takes 90% of the planet's wealth for itself. Leaving the world with just 10% to subsist on, which isn't enough, so kids starve to death, and their parents, in despair sell kidneys to try and feed them, like in Afghanistan — but the West doesn't seem to care about people like that, while Ukrainians are offered comfort and friendship and warmth. Everyone should have that, the world thinks — not just some.
And so the West's soft power has waned. There was a time, perhaps, where the West could have counted on much of the world to back it — but not anymore. The double standards and hypocrisy are too visible, too much. You leave people to sell their kidneys to feed their kids — and you don't care. You leave countries to be devastated by Putin — and you don't care. Why should we care about you?
Good luck with your world — we're not sure we want to be part of it anymore. That is what the world is saying to the West. Russia's war on Ukraine is just one facet of this larger set of transformations.
Let me now summarise them. The global economy the West built is coming undone. It will be taken apart with war and violence, like Russia's war on Ukraine, as the former engines of globalisation, Russia, China, India, turn authoritarian, and ally against it — unless the West dismantles globalisation first, like Europe cutting dependence on Russian oil. This is all driven by a backlash against the failure of globalisation to really benefit anyone but elites — a backlash which is turning America into a country which resembles Russia more than it does the West, a society of anti-Western values. And that is going to leave the West leaderless. Meanwhile, the world is watching all this with a kind of pity. Nobody much ever cared about it in the first place — and so what's really changed?
Umair
April 2022
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