(Roughly) Daily

Posts Tagged ‘geopolitics

“These are the times that try men’s souls”*…

Last January, (R) D looked, via Adam Tooze, at the concept of the Polycrisis: “I know it is relentless. That is also a feature of the polycrisis we are in. It comes from all sides and it just doesn’t stop.” He’s developed his thinking, summarizing in a recent Financial Times piece…

Pandemic, drought, floods, mega storms and wildfires, threats of a third world war — how rapidly we have become inured to the list of shocks. So much so that, from time to time, it is worth standing back to consider the sheer strangeness of our situation…

Of course, familiar economic mechanisms still have huge power. A bond market panic felled an incompetent British government. It was, you might say, a textbook case of market discipline. But why were the gilt markets so jumpy to begin with? The backdrop was the mammoth energy subsidy bill and the Bank of England’s determination to unwind the huge portfolio of bonds that it had piled up fighting the Covid-19 pandemic.

With economic and non-economic shocks entangled all the way down, it is little wonder that an unfamiliar term is gaining currency — the polycrisis.

A problem becomes a crisis when it challenges our ability to cope and thus threatens our identity. In the polycrisis the shocks are disparate, but they interact so that the whole is even more overwhelming than the sum of the parts. At times one feels as if one is losing one’s sense of reality. Is the mighty Mississippi really running dry and threatening to cut off the farms of the Midwest from the world economy? Did the January 6 riots really threaten the US Capitol? Are we really on the point of uncoupling the economies of the west from China? Things that would once have seemed fanciful are now facts.

This comes as a shock. But how new is it really?…

Welcome to the world of the polycrisis” (gift link)

Then, in his newsletter, he goes more deeply into the concept and its roots…

Polycrisis is a term I first encountered when I was finishing Crashed in 2017. It was invoked by Jean-Claude Juncker to describe Europe’s perilous situation in the period after 2014. In the spirit of “Eurotrash”, I rather relished the idea of picking up a “found concept” from that particular source. On Juncker check out Nick Mulder’s wonderful portrait of “Homo Europus”. It turned out that Juncker got the idea from French theorist of complexity and resistance veteran Edgar Morin, who is a whole ‘nother story…

Polycrisis – thinking on the tightrope

Both pieces are fascinating and useful; both, eminently worth reading in full…

* Thomas Paine, The American Crisis

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As we ponder profusion, we might recall that it was on this date in 1898 that an American institution was born.

The University of Minnesota football team (for our non-American readers out there, I’m of course referring to the kind of football where you’ll get a penalty for using your feet) was playing their final game against Northwestern University. The U of M’s team had been having a lackluster year, and there was a general feeling on campus that this was due to lack of enthusiasm during the games. So several students, lead by Johnny Campbell on a megaphone, decided to lead the crowd of spectators in a chant: “Rah, Rah, Rah! Ski-U-Mah! Hoo-Rah! Hoo-Rah! Varsity! Varsity! Minn-e-so-tah!” The crowd went bananas, as they say, and an energized Minnesota team won the game 17-6.

That day Johnny Campbell and his (presumably drunk) friends became the first cheerleader squad.

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Johnny Campbell

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“In the deepest sense the search for extraterrestrial intelligence is a search for ourselves”*…

Will the monumental moment of first contact fuel division among war-hungry humanity, or will it inspire our better angels and unite us? Becky Ferreira considers…

Do intelligent aliens exist somewhere out there in the universe? It is a grand mystery that has captivated humans for generations, fueling ever-more sophisticated searches of the skies for signs of advanced civilizations. But while aliens have taken many forms in our imaginations—from hostile invaders to inscrutable ciphers—we have absolutely no idea what extraterrestrial life-forms might look like, how they would communicate, or even if they exist at all.

We can, however, make some assumptions about the only intelligent space-faring species that we know of—humans—and how we might react to contact with an alien civilization. Indeed, people have spent decades developing protocols that attempt to anticipate this momentous event and all of the extraordinary potential consequences it could have on our civilization. It’s an especially important question now, as the world appears more strongly divided than at any time in recent memory, with major powers taking on increasingly antagonistic stances toward each other. 

In 2020, a pair of researchers dug into this question in an article in Space Policy by suggesting that humans might pose as big a risk to ourselves in the aftermath of alien contact as any extraterrestrial species…

The potential consequences of first contact: “Scientists Are Gaming Out What Humanity Will Do If Aliens Make Contact,” from @beckyferreira in @VICE.

* Carl Sagan

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As we listen carefully, we might note that today is the (fictional) birthday of ALF (Alien Life Form), from the 1980s TV series of the same name; he was born on this date in 1756 on the planet Melmac. ALF follows an amateur radio signal to Earth and crash-lands into the garage of the Tanners, a suburban middle-class family who live in the San Fernando Valley area of California. While largely a sit-com, it wove thematic threads (that echo that echo films like The Day the Earth Stood Still and ET) to explore exactly the issues raised in the piece linked above.

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Written by (Roughly) Daily

October 28, 2022 at 1:00 am

“The international situation is desperate, as usual”*…

… so desperate, an increasing number of pundits argue, that globalization– the “flat world” proclaimed by Tom Friedman– that was to totem of the turn of the century, is no longer possible. But as the estimable Martin Wolf argues, we shouldn’t be too hasty– nor too sweeping and blunt– in our judgements. Trade in goods may be slowing, but the potential for technology-enabled trade in services remains huge…

What is the future of globalisation? This is among the biggest questions of our time. In June, I argued that, contrary to increasingly widespread opinion, “Globalisation is not dead. It may not even be dying. But it is changing.” Among the most important ways in which it is changing is via the growth of services provided at a distance.

A crucial point is that the expansion of trade in such services has depended little on trade agreements. The regulation of service activities focuses on final services, not intermediate ones. There exist, for example, strict rules on selling accounting services in the US. Yet there are few rules on the qualifications of the workers that do the paperwork behind the provision of such services.

Thus, a “US accountant can employ pretty much anybody to tally up a client’s travel expenses and collate them with expense receipts”. Examples of occupations that provide intermediate as opposed to final services include book-keepers, forensic accountants, screeners of CVs, administrative assistants, online help staff, graphic designers, copy-editors, personal assistants, X-ray readers, IT security consultants, IT help staff, software engineers, lawyers who check contracts, financial analysts who write reports. The list goes on. As Baldwin argues in The Globotics Upheaval, the potential for this sort of technology-enabled trade is huge. It will also be highly disruptive: the white-collar workers who provide these services in high-income countries are an important part of the middle class. But it will be hard to protect them.

In all, the evidence suggests that natural economic forces have largely been responsible for past changes in the pattern of world trade. Growing concern over the security of supply chains will no doubt add to these changes, though whether the result will be “reshoring” or “friendshoring” is doubtful. More likely is a complex pattern of diversification. Meanwhile, technology is opening up new areas of growth in services…

Globalisation is not dying, it’s changing,” from @martinwolf_ in @FT.

* Tom Robbins, Even Cowgirls Get The Blues

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As we contemplate commerce, we might send muckraking birthday greetings to Upton Sinclair; he was born on this date in 1878. A writer, activist, and politician, he is probably best remembered for his classic novel, The Jungle, which exposed labor and sanitary conditions in the U.S. meatpacking industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act.

Many of his novels can be read as historical works. Writing during the Progressive Era, Sinclair describes the world of the industrialized United States from both the working man’s and the industrialist’s points of view. Novels such as King Coal (1917, covering John D. Rockefeller and the 1914 Ludlow Massacre in the coal fields of Colorado), Oil! (1927, the Teapot Dome Scandal), and The Flivver King (1937, Henry Ford– his “wage reform” and his company’s Sociological Department, to his decline into antisemitism) describe the working conditions of the coal, oil, and auto industries at the time.

Sinclair ran unsuccessfully for Congress as a nominee from the Socialist Party. Then he ran, as a Democrat, for Governor of California during the Great Depression, under the banner of the End Poverty in California campaign, but was defeated in the 1934 election.

He was awarded he Pulitzer Prize for Fiction in 1943 for Dragon’s Teeth, which portrayed the Nazi takeover of Germany during the 1930s.

It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

Upton Sinclair, ruminating on his gubernatorial loss

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Written by (Roughly) Daily

September 20, 2022 at 1:00 am

“‘I wish it need not have happened in my time,’ said Frodo. ‘So do I,’ said Gandalf, ‘and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.'”*…

A couple of weeks ago, (Roughly) Daily took a look at the fall of neoliberalism. What’s to come? The estimable Noah Smith has a suggestion…

For years now, I’ve been thinking about what the next big organizing principle of U.S. political economy will be. By “political economy” here I mean the type of economic policies we carry out, and the ways that we expect those policies to reshape our economy. This will be the first in a series of posts laying out my predictions for what the new paradigm will look like.

From the late 1970s through the middle of the 2000s, our organizing principle was what some people call “neoliberalism” — deregulation, tax cuts, free trade, and the shift of the welfare state towards in-kind benefits and work requirements. The reasons we went down this road were complex, and the results were mixed. This replaced an earlier paradigm that people called “the New Deal”, which started to emerge during the Great Depression but really solidified during and just after WW2. That paradigm involved large-scale government investment, heavy regulation, high taxes, social insurance, and the encouragement of a corporate welfare state.

Ever since the financial crisis and the Great Recession of 2008-12, we’ve been looking for a new organizing principle. Obama didn’t really try to give us one; with the exception of Obamacare, he was mostly focused on crisis recovery and damage control (stimulus, financial regulation, boosting the welfare state incrementally along largely neoliberal lines).

But everyone knew a new paradigm was needed. The question was what it would be…

[After carefully considering, then sadly rejecting climate change as a candidate…]

So if it’s not climate change, what will be the thing that forces us to come up with a new policy paradigm? If it’s not the moral equivalent of war, perhaps it’ll be the threat of actual war…

The War Economy,” Part 1

In a second post, he elaborates on how the U.S. and its allies might stack up against a “New Axis.” He dives into relative demographicc, economic, and social strengths, concluding…

I can’t say whether or not the New Axis is the most formidable military competitor that the U.S. and its allies have ever faced. The original Axis was certainly fearsome, and the USSR had tens of thousands of nuclear weapons ready to roast the world at the touch of a button. But I think that the comparisons above show that the New Axis certainly represents an economic competitor like none the U.S. and its allies have ever faced. And the reason is simply China. Russia is mainly a gas station with nukes. But China has three things going for it:

  • China has far, far more workers than the original Axis or the Soviet bloc.
  • China has advanced manufacturing technology that probably rivals the original Axis in relative terms, and far exceeds the Soviet bloc.
  • China has the world’s largest manufacturing cluster, making it the “make everything country”, which neither the Axis nor the USSR managed to be.

He continues…

This is simply a unique situation in modern history. The Industrial Revolution began in Europe and spread to the U.S. and the East Asian rim. The aftermath of WW2 saw central Europe and the East Asian rim incorporated into a U.S.-led alliance that dominated global manufacturing in a way that the communist powers could never threaten. Now, with the rise of China, world manufacturing is divided roughly in two.

Much of the War Economy in the U.S. (and its allies) will therefore be about rediscovering the manufacturing capabilities they neglected during China’s meteoric rise…

The War Economy, Part 2: Sizing up the New Axis

The Brookings Institute recently published its own (and very resonant) assessment of U.S. readiness, “The Sources of Societal Competitiveness.” And Nathan Gardels followed with a trenchant reminder that consensus on national security is a double-edged sword…

In the end, the enduring vitality of any country must be built primarily on the wherewithal within, not on the shaky foundation of menacing adversaries without. George Kennan, architect of the containment strategy against the Soviet Union, understood that lasting vigor comes from the inner confidence of a nation that thrives on its own terms and doesn’t rely on enemies to hold it together. External threats may spur a welcome renewal, but it will remain fragile if that becomes its purpose.

Kennan believed correctly that the West would ultimately be victorious in the Cold War not on some battlefield but through the organic strength of a robust society that no adversary could match.

The same perspective applies today with respect to the challenge of assertive autocracies, especially China. The most important contribution democracies can make to fostering more freedom in the world is to demonstrate through their own institutional integrity and innovations how a governing consensus can be reached by non-authoritarian means.

When Domestic Unity Is Built On Foreign Enemies

We live in interesting times. Eminently worth reading all of the links in full.

* J.R.R. Tolkien, The Fellowship of The Ring

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As we return to first principles, we might recall that it was on this date in 1945 that the Japanese Foreign Ministry sent telegrams to the Allies (by way of Max Grässli at the Swiss Department of Foreign Affairs ) announcing that Japan would accept the Potsdam Declaration. The surrender of the Empire of Japan was announced by Japanese Emperor Hirohito on 15 August and formally signed on 2 September 1945, bringing the hostilities of World War II to a close.

Japanese Foreign Minister Mamoru Shigemitsu signs the Instrument of Surrender on behalf of the Japanese Government, on board USS Missouri (BB-63), 2 September 1945. Lieutentant General Richard K. Sutherland, U.S. Army, watches from the opposite side of the table. Foreign Ministry representative Toshikazu Kase is assisting Mr. Shigemitsu. Photograph from the Army Signal Corps Collection in the U.S. National Archives.

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Written by (Roughly) Daily

August 10, 2022 at 1:00 am

“A great sound is given forth from the empty vessel”*…

Pakistan’s economy appears to be in pretty bad shape. Riffing on a provocative thread from Atif Mian, the redoubtable Noah Smith compares the economic condition of Indian’s nuclear-armed antagonist with its island neighbor (and current basket case) Sri Lanka…

Many of the particular root causes of Pakistan’s situation are different than in Sri Lanka — they didn’t ban synthetic fertilizer or engage in sweeping tax cuts. The political situations of the two countries, though both dysfunctional, are also different (here is a primer on Pakistan’s troubles). But there are enough similarities at the macroeconomic level that I think it’s worth comparing and contrasting the two.

In my post about Sri Lanka, I made a checklist of eight features that made that country’s crisis so “textbook”:

• An import-dependent country

• A persistent trade deficit

• A pegged exchange rate

• Lots of foreign-currency borrowing

• Capital flight

• An exchange rate crash (balance-of-payments crisis)

• A sovereign default

• Accelerating inflation

[He then examines each as it pertains to Pakistan]

… Pakistan shares a lot in common with Sri Lanka. It doesn’t have a pegged exchange rate, it’s not as dependent on imported food, and it doesn’t have quite as much foreign-currency debt. But the basic ingredients for a slightly more drawn-out version of the classic emerging-markets crisis are there, and there are some indications that the crisis has already begun.

Because Pakistan didn’t peg its exchange rate and didn’t borrow quite as much in foreign currencies as Sri Lanka, it made fewer macroeconomic mistakes than its island counterpart. But in terms of long-term economic mismanagement, it has done much worse than Sri Lanka. No, it didn’t ban synthetic fertilizers — that was an especially bizarre and boneheaded move. But one glance at the income levels of Sri Lanka and Pakistan clearly shows how much the development of the latter has lagged:

Pakistan went from 3/4 as rich as Sri Lanka in 1990 to only about 1/3 as rich today. That’s an incredibly bad performance on Pakistan’s part…

Another emerging-market crisis looms: “Pakistan is in big trouble,” from @Noahpinion.

Oh, and the weather’s not helping either.

For a consideration of the interesting (that’s to say, challenging) questions that Pakistan’s predicament (and the travails of other debtor nations) pose for China, which is an increasingly large lender across the developing world, see the first set of items here.

* Pakistani proverb

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As we batten the hatches, we might spare a thought for Fazlur Rahman Malik; he died on this date in 1988. A scholar and philosopher, he was a prominent reformer in Pakistan, who devoted himself to educational reform and the revival of independent reasoning (ijtihad). While his work was widely-respected by other reformers, it drew strong criticism from conservative forces– who eventually forced him into exile. He left Pakistan in 1968 for the United States where he taught at the University of California, Los Angeles and the University of Chicago.

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Written by (Roughly) Daily

July 26, 2022 at 1:00 am

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