(Roughly) Daily

In yesterday’s post, Álvaro García Linera wrote of the liminal time in which we live. Today, Parag Khanna starts from a similar place, but equally provocatively concentrates on what he sees coming next…

… the grander the vision, the further it likely lies from reality. Theories that inaccurately observe the present will inevitably fall short in predicting the future. This goes both for proponents of American hegemony as well as those aping the “return of great power rivalry” meme. Even as mainstream Western scholars belatedly accept the emergence of a multipolar world, it would be a mistake to allow their parsimonious frameworks such as neorealism to guide our thinking. 

These top-down approaches neither capture the shifting global and regional dynamics among more than a dozen primary and secondary powers, nor the deeper systemic change by which a wide range of actors contest authority and shape global society in an irrevocably decentralized direction.

Indeed, the most accurate description of today’s world is high entropy, in which energy is dissipating rapidly and even chaotically through the global system. In physics, entropy is embodied in the Second Law of Thermodynamics (pithily summed up in a Woody Allen film as: “Sooner or later, everything turns to shit”). Entropy denotes disorder and a lack of coherence. 

Robert Kaplan’s famous thesis of “The Coming Anarchy” three decades ago strongly aligns with the entropy mega-trend. Indeed, Kaplan memorably captured the decay underway, particularly in the “global south,” and the failed attempts by the post-Cold War West to sustain order in those regions.

Covid, supply chain shocks, inflation, corruption and climate volatility have all conspired to uphold his thesis alarmingly well: Swathes of Latin America, Africa and the Near East exhibit neither functional domestic authority nor regional coherence. The current faddish term “poly-crisis” applies in spades to this large post-colonial domain.

But entropy is not anarchy. It is a systemic property that manifests itself as a growing number of states and other actors seize the tools of power, whether military, financial or technological, and exercise agency within the system. There is still no consensus as to what to name the post-Cold War era, but its defining characteristic is clear: radical entropy at every level and in every domain of global life. How do we reconcile an increasingly fractured order with an increasingly planetary reality?…

[Khanna characterizes the decline of U.S. exceptionalism (centrality/hegemony), the rapid diffusion of systemic power, …

… the structure of power is no longer a pyramid but a web with multiple spiders forging networks of varying strength. Today we live in a truly multipolar, multicivilizational and multiregional system in which no power can dominate over others — while all can freely associate with others according to their own interests.

This structural entropy is embodied in what I call the geopolitical marketplace, a distributed landscape far more complex than the conventional wisdom of a bipolar U.S.-China “new Cold War.” Many countries in the world are post-colonial nations innately suspicious of overtures that would render them subservient pawns of either the U.S. or China.

This is why the notion of alliances is a hollow one for much of the world. Alliances are more like multi-alignments in which swing states, regional anchors and almost every other country actively play all sides in pursuit of their own best deal. This is not about deference to hierarchy but active positionalism: each country, large or small, places itself at the center of its own calculations…

This is the reality of regional systems, overlapping spheres of influence, and ascending powers willing to say yes or no as it suits them. Exploring dynamics within this geopolitical marketplace are far more revealing than today’s anodyne tropes such as the “return of great power rivalry” that posit a neat division of the world into red and blue. And yet the rapidly changing structure of global order is only half the story of the entropy engulfing our world…

[Kahnna describes the “Global Middles Ages,” in which the world has moved from a presumed monopoly to an active marketplace in which anyone with the capacity can offer their supply to meet another’s demand, and the world devolves into a networked archipelago of functional hubs…..

… Every geography in the world thus features a complex milieu of overlapping and contested authority among some combination of the five Cs: countries, cities, commonwealths, companies, and communities. The answer to the question “who’s in charge?” is far from uniform. In contrast to an era where the government was the sole sovereign, authority in today’s polities is an ever more unique combination that depends on the locale.

A similar devolution is underway in the financial domain. The Eurozone is moving toward a capital markets union to deepen its own liquidity, while countries within regional trade blocs such as Asia’s Regional Comprehensive Economic Partnership (RCEP) are harmonizing interest rate policies to minimize exchange rate fluctuations. The BRICS nations also want tighter exchange rate bands and trade denominated in their own currencies.

The U.S. dollar still comprises the largest share of global reserves, but nations have amassed dollar savings not to underwrite America’s low borrowing costs but to invest in their own economic security — including offloading U.S. Treasuries to hoard gold. Trillions of dollars of accumulated savings have been channeled into Western corporate war chests and Asian and Arab sovereign wealth funds whose capital flows and recirculates in all directions. 

Most global trade is also still denominated in dollars, but new agreements are undercutting Washington’s blocking power. China is the largest trading partner of most countries in the world, and incrementally converting its trade with them into RMB currency, meaning they will increase their RMB share of reserves in order to finance imports. Russia is not only accumulating RMB reserves but has started lending RMB to its own banks. Expect a petro-yuan soon — but also a petro-euro and petro-rupee as well. But remember, countries don’t want to unshackle themselves from the dollar only to become subservient to another self-interested superpower.

Indeed, the more the U.S. weaponizes the dollar through sanctions, the more countries flock to alternatives such as central bank digital currencies (CBDCs) that enable instantaneous and secure transactions while circumventing the U.S. financial system…

The diffusion of power in the technological domain accelerates all this simply by way of states enabling other states — whether by launching their satellites, installing their 5G networks, selling them surveillance technology, training their scientists or engaging in other modes of technology transfer. Now thanks to Starlink, there is WiFi almost everywhere.

And anywhere there is WiFi there can be DeFi — decentralized finance — a peer-to-peer marketplace of exchanges and crypto-currencies. We have entered a supply-demand world in which any two nodes in the global network can transact with a third by whichever means they choose…

The dollar, the internet and the modern-era primacy of the English language are symbols of American strength but also default utilities now slipping out of their master’s control. Americans have the loudest English language megaphones on global social media platforms such as X (formerly known as Twitter) and Facebook, but that hasn’t stopped Chinese and Russian state-affiliated groups from bombarding Americans with mind-warping propaganda on TikTok. Regardless of whoever professes to own the global town square, the truth is that nobody controls it. 

America is clearly not immune from social and political entropy. In theory, political devolution is a hedge against federal dysfunction. More than a dozen American states have a GDP size that would earn them membership in the global G20; each could be self-governed politically and serve as a laboratory of policy innovation while making America much more than the sum of its parts economically and demographically. But in practice, the federal system all but encourages the Balkanization visible today: An antiquated electoral process has convinced each side that the other is illegitimate, the Second Amendment has become so contorted as to justify red state militias, and a 2024 election may hinge on a heartbeat (or courtroom conviction). 

Indeed, of the thousand cuts lacerating America today, most are self-inflicted. Gun violence is escalating, hordes of undocumented migrants are flooding in and being weaponized by red states against blue while drug abuse and fentanyl overdoses surge to record levels. Meanwhile, corporate America has been gorging on inflation while small businesses are forced to swallow rising interest rates and over-regulation. Make no mistake that a restoration of national unity in the model of Johnson’s Great Society is not the most likely scenario for America’s future…

[Khanna contrasts the U.S. condition with that in China, India, and others…] 

… Planetary thinking embraces the liminal phenomena and complex butterfly effects that tie us together, but it must also contend with the diffuse patterns of terrestrial agency that will shape our response to the planetary condition. Nowhere is this more apparent than in our efforts to adapt to climate change, which will further create the future’s winners and losers.

Some geographies will suffer such intense drought that they may be fully vacated, while others such as Canada and Kazakhstan will gain millions of grateful climate migrants and be able to harness their human capital to become new power centers. The world will no longer be bureaucratically divided into investment grade categories set by ratings agencies that label them as a “developed market” (DM) or “emerging market” (EM), but between climate resilient and non-climate resilient zones.

If institutionalized orders such as the late 20th-century multilateral system tended to be established only after major wars, would an entropic drift into regional spheres of influence be preferable to a World War III among dueling hegemons? In this scenario, conflicts may flare from Ukraine to Taiwan, but they would be ring-fenced within their respective regions rather than becoming tripwires for global conflict. Regions that strive for greater self-sufficiency, such as North America and Europe today, could reduce the carbon intensity of their economies and trade, but potentially at the cost of undermining their interdependence with and leverage over other regions. Such is the double-edged nature of an entropic world.

With no major power able to impose itself on the global system or able to reign in those transnational actors domiciled abroad or in the cloud, the future looks less like a collective of sovereign nations than a scattered tableau of regional fortresses, city-states and an archipelago of islands of stability connected through networks of mobile capital, technology and talent. To argue that there is some bedrock Western-led order underpinning the global system rather than crumbling inertia is tantamount to infinite regress.

Global entropy doesn’t solely imply fragmentation. To the contrary, the system exhibits characteristics of self-organization, even aggregation, into new patterns and formations. Highways, railways, electricity grids and airlines link cities in ways that form neo-Hanseatic networks and alliances, and the internet transcends borders to link self-governing social communities. The universal reach and penetration of connectivity enables authorities of all kinds to forge bonds effectively more real than the many states that exist more on maps than in their peoples’ reality. The world comes together — even as it falls apart…

Reconciling an increasingly fractured order with planetary reality: “The Coming Entropy of Our World Order,” from @paragkhanna in @NoemaMag. Eminently worth reading in full.

(Image above: source)

* Michael Ende, The Neverending Story

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As we reconsider reorganization, we might recall that it was on this date in 2011, per Harold Camping, that the world would end. A Christian radio broadcaster and evangelist, Camping first predicted that the Judgment Day would occur on or about September 6, 1994.  When it failed to occur, he revised the date to September 29 and then to October 2.  In 2005, Camping predicted the Second Coming of Christ on May 21, 2011, whereupon the saved would be taken up to heaven in the rapture, and that “there would follow five months of fire, brimstone and plagues on Earth, with millions of people dying each day, culminating on October 21, 2011, with the final destruction of the world.”

For several years after Camping’s death in 2013, Family Radio, the netwok of Christian stations that he co-founded and fronted, continued to air some of his past broadcasts and distribute his literature. But in October 2018, it discontinued using any of Camping’s commentary and content; Tom Evans, president and general manager of Family Radio, explained that “Family Radio has come out of self-imposed isolation and we’ve repented from many of our former positions, date-setting the end of the world and all that.”