Posts Tagged ‘politics’
“Self-control is the chief element in self-respect, and self-respect is the chief element in courage”*…
To observe the obvious, power– and the exercise of power– is having a moment. It’s a little surprising that there’s not a broader discussion of Michel Foucault (and here) afoot… but then, the subjects and terms of our civic discourse are effectively being set by the powerful; and it’s hard to read Foucault as anything but a thorough-going critic.
It’s not so surprising that Thucydides is much discussed; it’s been easier for the powerful to find consoling, justifying “lessons” in his History of the Peloponnesian War, which recounts the 5th century BC war between Sparta and Athens— “Thucydides Trap” and so much more. Indeed, even critics are invoking Thucydides.
But, David Polansky and Daniel Schillinger argue, we need to listen wisely, not too well: the powerful wielding Thucydides are misreading him…
It’s almost never a good sign when Thucydides is in the news. The ancient Greek historian of the Peloponnesian War is typically invoked either to alert us to the possible return of a bygone age of terrifying great-power conflict, or to confirm that strong states can and should advance their own material interests, irrespective of justice.
Earlier this year, the Canadian prime minister Mark Carney earned much acclaim when he quoted, at Davos, the most famous lines in Thucydides’ History of the Peloponnesian War: ‘The strong can do what they can, and the weak must suffer what they must.’ While Carney intended his reference to be a critique of US behaviour under the Trump administration, Thucydides is also invoked in defence of aggressive or even imperialistic policies, especially in the United States. Yet those who look to Thucydides for either a justification or a critique of empire should be disappointed. Thucydides pulls no punches: he writes to expose the delusions of both the strong and the weak, the unjust and the just. Self-deception is a leitmotif of his History. Because self-deception is perennial, and because it can prove disastrous to victors and vanquished alike, Thucydides’ work remains timely and timeless, as he expected it would…
[The authors outline the war between the Athenians and the Peloponnesians and Thucycides’ vantage…]
… The line Carney invoked is often associated with ‘realism’ in world politics. This is a somewhat woolly term that encompasses both a moral position of scepticism about the possibility of justice in political life and an analytical approach to understanding political events in terms of material power and interest. Thucydides is a plausible originator of realism inasmuch as he offers an unvarnished and unsentimental account of the operation of political power among Greek cities. His realism may be contrasted with the ‘liberal institutionalism’ of a thinker such as Immanuel Kant, who holds out hope for mutual cooperation and even perpetual peace among states.
During the 20th century, these lines of ideological disagreement came to define discussions of international politics in both academic and political discourse. For example, the British historian E H Carr warily observed, during the Second World War, the spread of what he called ‘utopianism’, as reflected in the excessive hopes that international institutions such as the League of Nations might foster world peace. In response, Carr offered a qualified defence of realism for providing a pragmatic and flexible guide to politics in a dangerous world: ‘realism is the necessary corrective to the exuberance of utopianism, just as in other periods utopianism must be invoked to counteract the barrenness of realism.’
Thucydides’ own relationship to realism is more ambiguous than his reputation might suggest, however. For one thing, he never uses the term itself (which does not much predate the 20th century – in fact, it was Friedrich Nietzsche who first applied the term to Thucydides). He also rarely issues judgments under his own name. Many of the most notorious lines in his History are spoken by historical figures. Would anyone suppose that lines spoken by Richard III contain clear statements of William Shakespeare’s own views?
No doubt, Thucydides provides ample material for those who hope to find realist perspectives in his work. It is also true, however, that his History elicits a range of searching reflections on war’s causes and consequences. Note that Thucydides emphasises, humanely, the suffering occasioned by the Peloponnesian War. Some of this suffering was caused by disasters coinciding with war, not least the plague at Athens, which killed as many as a quarter of Athenian citizens by 425 BCE. But much suffering was caused by the Greeks themselves, including the Athenians and Spartans, whom one might have thought too ‘civilised’ to become so violent. In Thucydides’ words: ‘Never had so many cities been taken and laid desolate … never was there so much banishing and blood-shedding, now on the field of battle, now in factional strife.’
Thucydides himself was hardly exempt from events that shook the Hellenic world. He suffered from the terrible plague that struck Athens. He served in the war as an Athenian general, only to be exiled by his fellow citizens as punishment for failing to prevent the revolt of Amphipolis in 424 BCE. Yet Thucydides writes about the war with sobriety and restraint. There is little editorialising in his History; the author all but effaces himself. Thomas Hobbes, who was the first to translate him directly from Greek to English, observes: ‘Thucydides is one, who [does not] digress to read a lecture, moral or political, upon his own text, nor enter into men’s hearts further than the acts themselves evidently guide him.’ It is this same reserve, meanwhile, that seems to invite readers to impose their own interpretations upon the work.
The most well-known line in Thucydides’ History – and the one still encountered by undergraduates the world over, not to mention the attendees of Davos – is the one delivered by the Athenians to the Melians: ‘The strong do what they can and the weak suffer what they must.’ This episode, the Melian Dialogue, occurs in 416 BCE (more than halfway through the war), when the Athenians send an expedition to the neutral island of Melos to compel the Melians to submit to Athenian rule. Prior to the siege, nameless representatives from both cities meet for parley.
Note, however, that the standard translation of the famous line is more ominous than the Greek verb, συγχωρέω, really warrants. A more accurate rendering of the line would be: ‘Those who are superior do what they can, and the weak yield.’ Perhaps the translation issue explains, in part, why many readers suppose that the Athenians here say that ‘might makes right.’ What the Athenians actually say is that the language of justice only has a place in negotiations among relative equals in power. Between the powerful Athenians and the weak Melians, the Melians must yield to Athenian interests. So, even if the Athenians’ line contains a threat, it also invites the Melians to speak without pretences.
The Melians reject this offer to find common ground on the basis of shared interests. Although we do not hear from the Melian people but only from their oligarchic rulers, these announce that the Melians will fight the far-more-powerful Athenians, even as the Athenians ask only that the Melians become tributary allies of Athens, supporting the Athenian empire with cash and ships. The Melians even seem to expect that they will defeat the Athenians – because they will receive the help of the gods (as just men) and the Spartans (as Spartan colonists). In their own words: ‘We trust that the gods may grant us fortune as good as yours, since we are just men fighting against unjust, and that what we want in power will be made up by the alliance of the [Spartans], who are bound, if only for very shame, to come to the aid of their kindred.’
The Athenians explain to the Melians that neither nature, the gods nor the Spartans will protect them: ‘As you have staked most on, and trusted most in, the [Spartans], your fortune, and your hopes [for justice], so will you be most completely deceived.’ And the Melians were deceived: the Athenians destroyed the island, killing all the men and enslaving the women and children.
The Athenians would soon suffer a similar fate. On the heels of the Melian massacre, within six months’ time, the Athenians would launch an expedition to Sicily, ending in the total destruction of their forces – about 40,000 men, the size of a whole city. For many readers, the Athenian disaster in Sicily represents punishment for the annihilation of Melos.
In one of his rare direct statements on the war, Thucydides himself declines to blame its outcome on any particular military encounter – not even the Sicilian expedition – nor upon the Athenians’ pursuit of empire. More broadly, the Athenian response to the Melians holds true for other cities. There is nothing in Thucydides’ History that refutes the Athenians’ central claim: the strong are simply in a greater position to impose their preferences, which the weak disregard at their peril. Every city rules to the limits of its power.
The question, rather, is whether any city does so wisely, without illusions. What, after all, did the Athenians gain – except infamy – by destroying tiny Melos? Why did the Melian rulers prevent the Athenians from speaking to the people, and why did they insist on self-destruction when they needed only to pay tribute to Athens? The pathos of the Melian dialogue, for Thucydides, lies in the self-deceptions of both the Melians and the Athenians – and the disastrous consequences to which these give rise.
he Melians represent one instance of a broader psychological phenomenon depicted by Thucydides: a fervid attachment to justice, especially in times of war, can carry with it certain delusions. In Thucydides, the just are self-deceived, both because they think that they will prosper on account of their justness, and because they overrate their own attachment to justice.
Sparta is a case in point. The Spartans and their allies insist on the justness of their war against Athens. To hear them tell it, the Athenian empire imposes slavery on its subject cities, since these are compelled to contribute tribute and ships to Athens. By contrast, the Spartans call themselves ‘the liberators of Hellas’.
This rhetoric of justice masks the Spartans’ true motivations, which Thucydides unmasks. Thucydides comments on the Spartan decision to declare war against Athens in the first place: ‘The [Spartans] voted that the treaty had been broken, and that the war must be declared, not so much because they were persuaded by the arguments of the allies, as because they feared the growth of the power of the Athenians.’ While the Spartans denounce the injustice of the Athenians and proclaim the freedom of all Greek cities, they act as they do because they see their own hegemony on the Peloponnesus threatened. At the very moment the Spartans vote for war and prepare to invade Attica, they remain nominally in treaty with the Athenians. Evidently the Spartans do not care about the injustice of breaking the treaty so much as they care about protecting their interests, whatever they may think or say – though they do make sure to say, as a pretext, that the Athenians have broken the treaty.
The Spartans also commit many of the worst atrocities reported by Thucydides…
… At best, the Spartans are hypocrites, trumpeting the causes of justice and liberation while quietly acting out of fear and self-interest. Yet the truth is worse and more complicated. The Spartans are moved by a passion for justice, which burns hot when they mete out punishment. Those who threaten the interests of the city – including their own best slaves, whose only fault is their excellence – incur the wrath of the Spartans. They are self-deceived because they do not seem to realise that their passion for justice has grown into a monstrous taste for punishment. The crimes of the Spartans receive a fraction of the attention paid to the fate of the Melians, partly because the Spartans committed their atrocities without the Athenians’ famous (or infamous) rhetorical flourishes.
Meanwhile, the Athenians may appear not to be self-deceived. After all, they talk tough about the weakness of justice in affairs among cities, and aren’t shy about pointing it out to others. In a conference at Sparta before the outbreak of the war, envoys from Athens offer a tripartite defence of the Athenian empire. First, human passions – especially fear, but also desires for honour and profit – compel cities to rule to the limits of their power. Second, experience confirms this account of the psyche. Only weaker cities appeal to justice; the strong simply act, securing their interests as they can. Third, because human nature and experience together compel cities to seek expansive rule, no city should be blamed for so acting. Necessity excuses the Athenian empire.
Yet, Thucydides exposes the delusions of the Athenians no less than those of the Spartans. If the Athenians grasp the weakness of justice among cities, they overestimate the power of reason – including their own. It was the Athenians, after all, who insisted on a dialogue with the Melian elites, trusting (mistakenly) that they would be able to persuade the Melians to accept Athenian rule. By destroying the island in the end, the Athenians school the Melians in the weakness of justice, but they commit two blunders of their own: they lose the resources that Melos might have provided to their empire; and their massacre of the people hurts their reputation as the ally of the people in oligarchic cities.
Likewise, in the war conference at Sparta, the exposition of the Athenian position works not at all to dissuade the Spartans from declaring war (indeed, it seems almost calculated to enrage them). Again and again in the History, the Athenians browbeat their enemies at the bargaining table. It is unclear whether the Athenians care more about realising their strategic aims or vindicating their own cleverness.
It is not enough, in other words, for the Athenians to realise their ambitions; they also want the satisfaction of seeing the other cities acknowledge the truth of their worldview. But its truth should not require other cities to grasp it. Silent conquest would work just as well – or better, insofar as it avoids needlessly offending those whose acquiescence would be of benefit to them.
Finally, for all their vaunted realism, and even when they focus their deliberations on material realities, the Athenians make bad decisions, or fail to understand their own motivations. For example, when the Athenians decide, under the influence of the charismatic Alcibiades, to invade faraway Sicily, there is surprisingly little discussion of the actual strategic value of this venture. Rather, the citizens of Athens vote as they do for a variety of more personal incentives, with the older men seeing opportunities for vicarious victory, and the young seeking glory and adventure with little fear for their lives. And yet, as though mistrusting their own judgments, they elect to place the cautious Nicias in charge of the expedition, as if his personal moderation would somehow balance out their immoderate goals. In the event, this mismatch leads to disaster.
More broadly, this misunderstanding of their situation extends to the nature of their empire itself. Pericles, the pre-eminent Athenian statesman, admits that the Athenian empire is ‘like a tyranny’. Yet he does so only in the final speech (before his death), with the plague raging through his city. Even then, he cannot help urging the Athenians to hope for glory. He claims that, even in defeat, Athens will be remembered for having ruled over more Greeks than any other city.
In one sense, at least, Pericles was not mistaken: we do still recall the exploits of the Athenians. Yet our remembrance is owed less to Pericles than to Thucydides. But, where Pericles poetically declares that ‘heroes have the whole earth for their tomb,’ Thucydides depicts the end of the Sicilian expedition: the Athenians leaving behind the unburied and the wounded, drinking their own blood in the river Assinarus, and dying, ignominiously, in the stinking quarries of Syracuse. And where Pericles promises his fellow citizens that they will leave behind them ‘imperishable monuments’, Thucydides leaves us his far more ambiguous History of the war.
Thucydides saw in the Peloponnesian War ‘a rough master, that brings most men’s characters to a level with their fortunes.’ Observing the United States’ present conflict with Iran, which has increasingly severe implications for the global economy, it is evident that those who embarked on the war had outsized expectations of success at minimal cost, and the tough talk that accompanied its outset was a reflection of those same expectations rather than a true apprehension of events. This kind of faux-realism has a way of excluding the subject from the harsh logic of their own claims about political life.
Meanwhile, others routinely predict the decline of US power as a cosmic punishment for its repeated aggression against other countries. While decline may be inevitable over a long enough timeline, the many announcements of it are also a form of wish-casting for a just universe, in which the unjust inevitably receive their comeuppance. After referencing Thucydides, Carney offered some tough-minded talk of ‘middle powers’ banding together, which was rather vague on actual power analysis: how sure are we that these states really do constitute middle powers (as opposed to small ones)? And what do their aggregated capacities really amount to?
A similar self-deception pervades the Hellenic world throughout the war. The Athenians deceive themselves as to their true capacity to rule over their fellow Greeks, especially as to the power of their reason to control events and persuade others. And they even go so far as to deceive themselves as to how their exploits will be remembered by those they conquered. The Spartans deceive themselves as to the justness of their cause, no matter their own acts of manifest injustice. Finally, the Melians deceive themselves that their own just cause in facing a stronger invader will be rewarded through salvation by either their Spartan allies or the gods themselves.
By contrast, Nietzsche accords Thucydides the highest praise for his ‘unconditional will not to deceive [himself]’. He sees the world as it is, and he does not attempt to find in it confirmation of what he already believes he knows. Thucydides’ self-knowledge defines the distance between him and us, which is not merely temporal but psychological. It is ironic, then, that so many with greater confidence and less self-awareness apply their own purposes to a work concerned with the vast human capacity for self-deception…
As Thucydides said, “Ignorance is bold, and knowledge is reserved.”
On learning from a still-timely ancient history: “Thucydides the perspicacious,” from @aeon.co.
See also: “Thucydiocies: How Not to Read Thucydides in Contemporary Political Discourse.”
* Thucydides, History of the Peloponnesian War
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As we fumble with force, we might recall that on this date in 48 BCE, Julius Caesar‘s forces defeated the Roman Republican army led by Pompey in the Battle of Pharsalus. A climactic event in “Caesar’s Civil War,” the victory boosted Caesar’s power and legitimacy. While the civil war dragged on until 45 BC, Caesar grew steadily stronger until his ultimate victory, after which he was appointed “Dictator,” and set into motion the conversion of Rome into an imperial state, completed by his heir Octavian (or as we also know him, Augustus).
Scholars disagree as to whether the Battle of Pharsalus was the inciting event for the collapse of the republic or a symptom of the republic’s collapse. Either way, Caesar’s victory there was the turning point from republic to imperial rule.
“Let’s go to the numbers”*…
From the McKinsey Global Institute, the executive summary of their snapshot– a “balance sheet”– of the global economy…
• The global balance sheet takes stock of all assets, liabilities, and wealth, providing a lens into economic health. This annual update estimates that it reached nearly $1.8 quadrillion ($1,800 trillion) in 2025, up from $1.7 quadrillion in 2024. Several asset classes grew further out of balance with the underlying economy, raising the possibility of corrections through inflation, asset valuation losses, or, optimally, productivity growth.
• The balance sheet’s mounting detachment from the global economy was driven by the world’s two biggest economies in 2025. US equity values soared to 2.4 times corporate net assets as profits were double their share of GDP since 2000. China’s corporate debt grew to 80 percent of real assets, versus 50 percent globally. Government debt remains near all-time highs in the United States and has grown most rapidly in China.
• Globally, most corporate and household debt and real estate moved closer to 25-year averages relative to GDP. Inflation helped with this normalization, although values remain well above pre-2000 levels. The ratio of productive assets to GDP held steady amid flat investment.
• Global household wealth growth rose to a new high of $570 trillion, driven by “paper” gains. Only 20 percent came from real capital formation, while valuations of existing assets grew four percentage points faster than already-high consumer price inflation. In the United States and Canada, equity values drove wealth growth. China, France, and Germany saw a drop in paper wealth as real estate prices declined. In the United Kingdom and Japan, inflation pushed up asset values.
• Major economies were on different pathways entering 2026. The United States has been in a “productivity acceleration” scenario, but high public debt and equities add the possibility of “sustained inflation” or “balance sheet reset.” Europe has gravitated toward “secular stagnation” as sluggish demand depresses growth and interest rates. China has experienced a partial balance sheet reset amid declining property values, although government spending and corporate investment have continued to propel balance sheet growth.
In this report, we provide an update on the global balance sheet in 2025, exploring to what extent its recent expansion, and by extension wealth growth, has been “in balance.” The analysis finds that wealth was, to an even greater extent than previously, rooted in asset values rising faster than real economy investment and growth, creating record levels of global wealth “on paper.”
Although many economies that were studied experienced wealth and balance sheet swings, the global picture was largely driven by its two biggest: the United States and China. Higher US equity values and the accumulation of China’s public and private debt brought some near-term economic benefits but left their economies more vulnerable to potential corrections.
Businesses use both income statements and balance sheets to develop a complete picture of their financial health. Analysts of the global economy tend to focus on the former. Since 2021, MGI has developed a “global balance sheet” to fill this gap, representing a clearer view into the world economy’s wealth and health.
Our previous reports found that from the mid-1990s to the COVID-19 pandemic, household wealth expanded faster than gross domestic product. Asset prices for real estate, equities, and bonds grew, as did debt and deposits. This occurred amid declining (and eventually rock-bottom) interest rates, rapidly expanding US profits, and a property boom in China. Productivity did not keep pace across advanced economies, nor did real wealth formation through net new investment.
When the balance sheet outruns the underlying economy, weaknesses can be exposed. When real estate and equity values rise faster than GDP, capital may disproportionately go to asset repurchases, sometimes with a lot of leverage. This may push up valuations but leave the economy deprived of the type of investment that generates long-run growth. For households, wealth rises but merely on paper, with heightened risks of eventual corrections. Growing asset values also tend to exacerbate wealth inequality, as existing owners of wealth see large gains while entering asset markets becomes harder for others (for example, young households trying to buy a home).
Elevated balance sheets may correct in one of three ways. A productivity acceleration scenario involves higher income supporting high asset values and debt; this is the most preferred outcome. A sustained inflation scenario brings down the real values of assets and debt, recalibrating the balance sheet with higher nominal GDP. But it can erode inflation-adjusted wealth along with other undesirable side effects. A balance sheet reset scenario, entailing a drop in asset values, deleveraging, and defaults, would shrink the balance sheet in absolute terms, with severe wealth losses and, often, lengthy periods of lost economic growth. Or the balance sheet may just stay high, particularly under secular-stagnation-like conditions of low investment and interest rates, as seen in the United States and Europe in the 2010s. That’s seemingly good for wealth, but at the cost of low growth and rising leverage.
Historically, most balance sheet corrections have taken place through higher inflation. Indeed, the inflation coming out of the COVID-19 pandemic in the United States and Europe brought a correction in the balance sheet (and wealth) ratio to GDP. In China, a drop in property values drove a decline in wealth to GDP.
In 2025, global wealth reached a higher dollar value than ever before. But how “healthy” was this new growth? After postpandemic corrections, some balance sheet items have resumed expansion and reached new heights. This was particularly the case for US equity as AI fueled market optimism and corporate earnings continued to climb. Rising government debt relative to GDP remains a challenge in many economies amid higher interest rates. Stocks of currency and deposits remain high compared to longer-term historical norms. Altogether, this has culminated in even more wealth on paper than in the past several decades and raises the stakes for US corporate earnings to deliver.
Balance sheets, and macroeconomic factors like productivity and inflation, point to diverging trends across major economies. Recognizing the swing factors that can shift an economy to productivity acceleration is more urgent than ever: for the United States, corporate earnings and greater government saving (in other words, less borrowing); for Europe, greater investment; for China, higher domestic consumption.
Future global wealth and stability may depend on it…
[The report unpacks 0with lots of charts/data) the contents– the constituent elements– of the balance sheet, examines whether or not it is “in balance,” and considers whether the growth that it reflects has been “healthy.” (McKinsey worries that it has not been.) It concludes, addressing the executives who are McKinsey’s primary clients…]
… A balance sheet that is out of kilter with the economy—in other words, with high paper wealth fueled by debt and liquidity levels significantly above historical norms—can unwind via higher productivity, higher inflation, or asset price corrections. Balance sheets may also remain large, typically under secular-stagnation-like conditions, effectively kicking the can down the road for potential correction.
Each of these four scenarios shapes the long-term economic outlook. Only productivity acceleration delivers real economic growth justifying valuations, thus protecting wealth. The others sacrifice wealth, growth, or both. Sustained inflation reduces real values of wealth, secular stagnation sees low growth, and a balance sheet reset signals a loss of wealth and growth. Importantly for business leaders, two scenarios would likely mean structurally higher interest rates: Productivity acceleration would entail greater demand for capital amid higher business investment, while sustained inflation would likely involve central banks tightening policy rates and, ultimately, higher long-term yields.
All scenarios are possible for all major economies. However, they appear to be on different pathways, with different swing factors that could move them from one trajectory to another.
For executives, this means both preparing for an unusually broad array of economic pathways and carefully watching the swing factors, which rise above the noise of daily indicators (see sidebar “Business planning for all scenarios”). Leaders across sectors and industries could also explore ways to encourage the optimal outcome, the productivity acceleration scenario.
Major economies show significant divergence in trends across macro drivers of productivity, inflation, and interest rates, along with fundamental balance sheet components including real estate, equity, and debt.
The United States has seen a structural uptick in both productivity growth and interest rates relative to the prepandemic period. Productive investment, particularly driven by the tech sector, has recently grown. High equity values also signal market confidence, although they may pose some downside risks. Meanwhile, inflation remains above the Federal Reserve’s 2 percent target and government debt remains near all-time highs, adding further inflation risk.
The eurozone has experienced a return to secular-stagnation-like conditions, akin to the prepandemic period, amid flat productivity and higher saving. Europe’s balance sheets overall appear more in balance compared to the US balance sheet (with a few exceptions, such as Italy’s government debt). Productivity growth rates, however, are down across the region’s three largest economies (Germany, France, and Italy). Until recently, inflation was mostly trending toward the European Central Bank’s 2 percent target, although Europe is more exposed to energy price changes. Personal savings rates remain high amid a drop in aggregate demand and per capita household wealth has declined in PPP terms in Germany and France.3 Productive investment remains below prepandemic and global averages.
China continues to work through a partial balance sheet reset in the face of a continued decline in real estate, with questions about future growth drivers amid low household demand and a boom in corporate investment. Productivity growth has receded in recent years, although it remains above the rate in advanced economies. Inflation and, in tandem, nominal interest rates have dropped, and concerns have shifted to dealing with deflation risks. At a macro level, lower household property investment has been offset by higher corporate investment, especially among state-owned enterprises, and by government spending. This has coincided with a substantial rise in corporate and government debt, both reaching all-time highs.
While the United States is the only major economy showing signs of productivity acceleration, it is not guaranteed long term, and other economies have a potential path to it. Focusing on “swing factors” could help filter signal from noise in the daily flow of indicators, market fluctuations, and political headlines. These factors differ by economy.
In the United States, swing factors that could knock the economy out of productivity acceleration include the “fiscal tightrope” and corporate earnings.
- Government debt stands at about 120 percent of GDP. Combined with higher interest rates, this means more public spending will need to be directed toward debt repayment. Public spending could come under pressure, especially from bond investors, in the form of higher market interest rates. These translate into higher business costs of capital. If fiscal policy tightens too little, a public debt crisis or sustained inflation becomes more likely. Too much, and secular stagnation is a potential outcome. To bring budgets back into balance, greater fiscal saving (or lower borrowing) on the order of three percentage points of GDP would be needed.
- On the corporate-earnings side, an equity or wealth reset could be triggered by a large structural shift in the longer-term outlook—for example, from AI disappointment or large geopolitical disruption. Equities are at all-time highs, at 3.7 times GDP and 2.4 times net assets, and constitute nearly 40 percent of household wealth. A price correction could result in a sharp pullback in demand, ushering in an extended period of low growth. It is thus imperative that corporate earnings deliver on high expectations…
Eminently worth reading in full: “The global balance sheet 2026: Imbalance and divergence.”
See also: “World Economic Situation and Prospects 2026” from UNCTAD (the UN Trade and Development Organization), whose review of the global finacial situation resonates with McKinsey’s, but whose recommendations are targeted to global policy makers and development champions:
• Strengthen coordination across macroeconomic policies. Monetary policy alone cannot manage persistent price pressures. Better alignment between monetary, fiscal and industrial policies is essential to stabilise inflation, support investment and protect vulnerable groups.
• Use fiscal policy strategically and credibly. Targeted and temporary measures can help protect households from high prices and support social cohesion, while credible medium-term fiscal plans and prudent debt management are essential to rebuild fiscal space.
• Scale up multilateral cooperation and development finance. Implementing commitments under the Sevilla Commitment, including debt reform and expanded concessional and climate finance, is vital to closing investment gaps and reducing systemic risks.
• Reinforce an open, rules-based trading system. Strengthening transparency, predictability and cooperation in global trade remains central to sustaining growth and limiting fragmentation in an increasingly uncertain global economy.
And for a differently-flavored kind of accounting: “What the Big Mac index reveals about a global currency beef.”
* Catchphrase often used by financial and sports journalists to transition to statistics or financial data, e.g., on public radio’s wonderful Marketplace.
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As we ponder the political economy, we might recall (hoping that history doesn’t repeat itself) that on this date in 1929, while the U.S. economy was already showing signs of strain (agricultural strains and a sagging consumer market), the U.S., its businesses, and its financial markets were still in the “Roaring Twenties.” Roughly three months later (on October 24, 1929, “Black Thursday,” and October 29, 1929, “Black Tuesday”) America– and the world– suffered the Wall Street crash of 1929 and began the slide into the Great Depression.
By this date in 1932, stocks had lost roughly 90% of the value they had had three years earlier. GDP in the U.S. had fallen 30%; GDP around the world was down 15%. International trade fell by more than 50%, and unemployment in some countries rose as high as 33% (peaking in 1933 at 25% in the U.S.).
“Historical oblivion is the default, not the exception”*…
Indeed. And that’s especially true of the institutions that guard the archives that are our cultural heritage. The ongoing transition from physical media sales to digital licensing markets has unleashed a new wave of archival ephemerality, which endangers these memory institutions’ core operations and threatens to plunge society into a digital dark age.
The stakes are high. As Haruki Murakami observed: “Robbing people of their actual history is the same as robbing them of part of themselves. It’s a crime… If our collective memory is taken from us – is rewritten – we lose the ability to sustain our true selves.”
Michael Menna (a Stanford Law Fellow who co-authored the “Our Future Memory” manifesto) and Lila Bailey (Senior Policy Counsel at one of the world’s most crucial repositories, The Internet Archive), call for four digital rights that would allow libraries, archives, museums, and other cultural heritage organizations (“memory institutions”) to uphold their shared public service mission of preserving history and providing access to information…
… We are living through a troubling paradox: Digital technologies have enabled the production and distribution of more information than ever, yet access to that information isincreasingly fragmented and fragile. These technologies should permit us to engage and learn from all the digital content at our fingertips. Instead, many of the basic rights we grew accustomed to in the physical world are now being overtaken by aggressive market tactics that do not reflect the public-interest values the law was meant to protect. If copyright, privacy, and other regulatory frameworks were designed to balance the interests of creators and users with the public’s need to access and contribute to the wealth of human knowledge, then our increasingly digital information economy has thrown that balance out of whack.
In this new media environment, publishers and other content providers have unprecedented power to control knowledge and culture with technical restrictions and exclusionary licensing terms. Governments also have an easier time censoring what people can see by scrubbing their websites and pressuring commercial platforms to do the same. These sudden changes will feel familiar to anyone who has logged onto a streaming service or social media app to find a movie or news story suddenly missing. But for libraries, archives, museums, and other cultural heritage organizations (“memory institutions”), it poses an existential risk to
their core public service mission of preserving culture and protecting history. When these organizations can no longer collect and provide access to digital materials, members of the public cannot place their trust in a stable record—which affects their ability to confidently participate in democratic discourse.
We write this paper from our perspective at the Internet Archive, a nonprofit research library that specializes in web archiving, digitization, and the preservation of media in all forms. We feel the harms from these shifts firsthand and hear many of the same complaints from our partner memory institutions around the world. That shared frustration with today’s digital landscape has given rise to an emerging consensus among libraries, archives, museums, and their allies, calling for better legal protections and practical options to continue their services and preserve cultural memory in today’s information age.
This two-part paper (1) presents the looming threat of “vanishing culture” as a first-order political crisis, and (2) discusses the key role that libraries and other memory institutions can play in meeting that crisis.2 In the first part, we examine the underlying causes of vanishing culture and trace its ripple effects along several different facets of modern life: (a) educational resources, (b) journalistic integrity, (c) civic engagement, (d) religious study, and (e) environmental policy. In the second part, we reintroduce a framework of four rights that would ensure memory institutions’ ability to work together to collect, preserve, and provide access to digital materials. This framework rests on the simple proposition that memory institutions should be allowed to do the same things in the digital world that they’ve historically done in the physical world. It originated in the 2024 statement titled Four Digital Rights for Protecting Memory Institutions Online3 before it became a global rallying cry for the Our Future Memory movement and its growing list of library, archive, and museum signatories. Together, these memory institutions are striving to combat the political causes and effects of vanishing culture by speaking with one voice to the importance of memory work in an age of digital ephemerality. That is why we call on all memory institutions, large and small, to sign onto the Statement and join the movement. Individuals and communities need memory institutions to educate themselves and freely participate in civic life, and every time a content provider lets critical information disappear online, it offers further proof that today’s digital markets alone do not constitute a viable alternative. If things do not change soon, we risk sleepwalking into a future where both memory institutions and the public they serve will become passive consumers, rather than active stewards of human knowledge…
Menna and Bailey explain the situation; unpack the four rights they propose: collection, preservation, access, and collaboration; then issue a call to action.
Eminently worth reading in full: “The Political Threats of Vanishing Culture and the Need to Protect Our Future Memory” (PDF here)
See also Vanishing Culture (full PDF here)
And consider joining me in supporting the Internet Archive.
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As we preserve and share, we might send open birthday greetings to a man who would surely have understood the importance of Menna’s and Bailey’s arguments: Sir Karl Raimund Popper; he was born on this date in 1902. One of the greatest philosophers of science of the 20th century, Popper is best known for his rejection of the classical inductivist views on the scientific method, in favor of empirical falsification: a theory in the empirical sciences can never be proven, but it can be falsified, meaning that it can and should be scrutinized by decisive experiments. (Or more simply put, whereas classical inductive approaches considered hypotheses false until proven true, Popper reversed the logic: conclusions drawn from an empirical finding are true until proven false.)
Popper was also a powerful critic of historicism in political thought, and (in books like The Open Society and Its Enemies and The Poverty of Historicism) an enemy of authoritarianism and totalitarianism (in which role he was a mentor to George Soros).
“As the servants of the Machines are becoming a privileged class, the Machines are going to be enormously more powerful”*…
Technological sovereignty is a nation’s ability to create, control, and own (or reliably source from reliable alllies) the technologies, infrastructure, and data essential to national security and economic growth.
Concerns with technological sovereignty date back to at least the 17th century (when, for instance, European mercantilist states banned the export of textile machinery to protect domestic monopolies and maintain a favorable balance of trade). They characterized much of the 20th century (as nations built up indigenous defense industries to ensure military independence).
In our 21st century, the one-two punch of the Trump tariffs and his attack on Iran (and the effective closure of the Straights of Hormuz), with the supply chain disruptions attendant on them, have raised the issue of technological sovereignty anew– and with a vengence. In our interconnected, interdependent– thus vulernable to disruption– world, China and the U.S. are in the lead; but experts project slow advance in national tech sovereignty over the next several years.
But this time around, Francesco Crespi and his co-authors argue, the Big Tech corporate monopolies/oligopolies in both China and the U.S. have emerged as even more important players (than their historical analogues have been). Their increasing dominance of private R&D, the increasing centrality of privately-controlled digital technology, their resultant control over knowledge, infrastructures, and key technologies such as telecoms, cloud computing, and AI. have made them central to nation’s futures, even as the Big Tech players (as corporations) have different imperatives.
Crespi, et al. unpack this state of play and propose a typology of technological sovereignty that takes into account the degree of technological dependence on Big Tech, the nature of the relationship between states and digital companies, and, consequently, a nation’s capacity to align the activities of these companies with its own strategic objectives. They summarize:
This paper has examined TS at a historical moment in which the control of critical technologies, infrastructures and knowledge is increasingly concentrated in a limited number of digital corporations. Its starting point was a conceptual tension in the existing debate. TS is commonly defined as the capacity of a state, or a federation of states, to access and provide critical technologies without incurring one-sided structural dependence (Edleret al., 2023). Yet this definition implicitly assumes that sovereignty is ultimately held and exercised by public authorities. The argument developed in the present paper is that this assumption has become increasingly problematic. In core domains such as cloud computing, AI, data infrastructures, satellite systems and digital services for defence, the effective control of technological capabilities is often exercised by private corporations whose interests, strategies and governance mechanisms only partly overlap with public objectives.
The empirical evidence discussed in the paper points to three connected transformations. First, the long-term retreat of public research and the expansion of intellectual property regimes have shifted the centre of gravity of innovation systems towards large private actors. The rise of ICT and platform-based business models has reinforced this tendency by allowing a small group of firms to accumulate data, proprietary knowledge, network advantages and infrastructural assets on a global scale. Second, the hierarchy of corporate R&D has changed substantially since the early 2000s. Digital firms, especially from the United States and China, now occupy the leading positions among global R&D spenders and dominate strategic technological areas such as AI, cloud and software ecosystems. Third, this concentration is infrastructural as much as technological. The control of data centres, cloud availability zones, platforms, operating systems and search engines gives Big Tech firms a systemic role in the functioning of economies, public administrations and security apparatuses (Coveri et al., 2025).
As a result, this concentration of techno-economic power modifies the relationship between the state and private capital. Public authorities no longer simply procure technologies from firms operating in competitive markets. In many cases, they depend on proprietary ecosystems that set standards, store data, provide computing capacity, update software and mediate access to essential digital functions. This produces a form of structural lock-in that is particularly severe in dual-use and security domains. The state can retain formal authority while losing part of the operational capacity required to exercise it. Under these conditions, TS cannot be evaluated only by measuring the presence of advanced technologies within a territory; it must also be assessed by asking who owns, controls and governs the infrastructures and knowledge through which those technologies are produced and deployed.
The analysis of the military-digital complex further strengthens this conclusion (Guarascio and Pianta, 2025). The digitalisation of warfare has made the capabilities of Big Tech increasingly indispensable for military and intelligence activities. Cloud infrastructures, AI systems, cyber-defence tools, satellite connectivity and battlefield data services have become essential components of contemporary security systems. At the same time, public procurement, defence contracts and battlefield experimentation reinforce the technological and market position of these firms. Hence, the resulting relationship is one of mutual dependence, but it is not necessarily symmetrical. Governments need access to digital infrastructures and capabilities that they often do not control internally, while Big Tech firms use military and security demand to consolidate their technological advantages, expand proprietary ecosystems and increase their bargaining power vis-a-vis public authorities. This gives concrete substance to the notion of privatised TS (Abels, 2026).
Building on this analytical and empirical framework, the paper proposes a typology for interpreting the notion of TS according to these structural transformations. In particular, it distinguishes between strong and weak technological sovereignty and between private-driven, public-driven and public-private-driven governance arrangements. This distinction matters because the same technological capability may have different economic and political implications depending on the distribution of control across states, domestic firms, foreign firms and hybrid institutional arrangements.
They conclude:
Taken together, these findings suggest that TS should not be assessed only by asking whether a country possesses advanced technologies. It should also be assessed by examining how control is distributed and governed across the state, domestic firms, foreign firms and hybrid governance arrangements. The broader implication is that private-driven TS is not neutral from a welfare standpoint. It may increase innovation speed and geopolitical capacity, but it can also redirect technological change towards rent extraction, militarisation and proprietary lock-in. On the opposite, public-driven technological sovereignty can better preserve public-good objectives, but public institutions should possess adequate technical, financial and organisational capabilities, while public-private technological sovereignty can work when public conditionality is strong; otherwise, it may degenerate into the socialisation of risk and the privatisation of control. A welfare-oriented strategy for TS should therefore prioritise public and collective control over essential technological infrastructures, strengthen public R&D and procurement capabilities, impose interoperability and open- standard requirements, and ensure that critical data, patents and infrastructures generated with public support remain accessible for public purposes.
The central policy question, therefore, is not simply how to become technologically sovereign, but how to prevent the pursuit of sovereignty from becoming a vehicle for the privatisation of the very capabilities on which welfare, democracy and long-term development depend. Technological sovereignty can strengthen resilience, strategic autonomy and collective welfare only if it is embedded in institutions capable of governing technological change in the public interest. Without such institutions, the language of sovereignty may legitimise new forms of dependency: dependence on domestic monopolies in some countries, dependence on foreign platforms in others, or dependence on public-private arrangements in which public authorities finance
strategic projects while private actors retain control over their future trajectories. A research and policy agenda on TS should therefore place ownership, governance and accountability at the centre of the analysis, alongside capabilities and geopolitical positioning.
Eminently worth reading in full: “Technological Sovereignty, Big Tech, and the Military-Digital Complex” via @ssrn.bsky.social. (Full PDF here.)
See also: “Technology sovereignty as an emerging frame for innovation policy. Defining rationales, ends and means” and “Reconciling open science with technological sovereignty“
And for a look at one of the moving parts of the puzzle, one that underlines the importance of Crespi’s closing suggestions: “Elon Musk and SpaceX’s Futurist Coup.”
(Image above: source)
* J.R.R. Tolkien, The Letters of J.R.R. Tolkien
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As we develop deftly, we might might send connected birthday greetings to a man who was instrumental in the development the promise/threat of Big Tech as today we know it: Mark Weiser; he was born on this date in 1952. A comouter scientist and CTO of Xerox PARC, he is is widely considered to be the father of ubiquitous computing, a term he coined in 1988, when he described a future in which personal computers would be replaced with tiny computers embedded in everyday “smart” devices and their connection via a network.
“I believe that we can forecast the ‘changing landscape of context,’ and thus get insight into when we are entering the danger zone”*…
Derek Thompson shares his interview with philosopher Agnes Callard…
Here are some questions that I consider self-evidently compelling about the modern world:
- Why is the news media so interested in telling you how much the world sucks all the time?
- Why are so many of us obsessed with distraction and managing our attention?
- Why is it so hard to stop comparing ourselves to others?
- And why does everything in art and design seem the same these days?
A week ago, I didn’t think these questions were related. I’m not sure I would have told you I had a good answer to most of them. And I certainly wouldn’t have made the audacious and borderline bonkers claim that one single theory could begin to explain all of them, at once.
But then I had the pleasure of speaking to Agnes Callard, the University of Chicago professor, about her new theory called “the uni-context.” It’s easily one of them most interesting conversations I’ve had all year. And once you’ve heard or read it, I think you might find it hard to think about anything else.
One way to prepare your mind for Callard’s theory of the uni-context is to think about the better-known concept of “context collapse.” If you post something to social media, it will be simultaneously visible to your boss, your parents, your ex, and total strangers. So, while your offline life might be distinct with each of these groups—you might be differential to your boss, childish with your parents, and bawdy with your friends—all of those distinctions are flattened on the internet. That’s context collapse, and you can think of it as the answer to a question: How do informational norms change when we’re all living in the same universal room?
Callard takes the idea significantly further. She asks: How do all other norms—our morals, our ethics, our sense of what is good for us and for others—change when we continually imagine ourselves to be living in a universal room with everybody else? The connections that Callard makes are consistently surprising, often quite funny, and ultimately mind-exploding…
A small sample…
… Thompson: Tell me if this is a fair recapitulation of our conversation so far.
For most of human history, people judged norms based on local context. A home had its own rules, a cathedral its own rules, and a classroom or bar or funeral parlor had its own rules. But now it is almost like we are constantly living in universal rooms, and the universal room we occupy is assumed to have universal values and universal norms. That has specific implications. First, rather than talk about what is good, which is context-dependent, we tend to focus about universal truths, and it’s easier to talk about universal bads than goods, so people focus on negativity. Two, character is context-dependent, so we talk less about character and more about its universalist equivalent, which is identity.
There’s a third implication that we should discuss. If everyone is on the same comparable plane, the same evaluative field, then comparison itself becomes a more inextricable part of life.
Callard: Exactly.
Thompson: Tell me how the uni-context leads to a world of more comparison and competition.
Callard: Imagine two school districts with two high schools that do things slightly differently. If you’re in district A, you go to school A, and if you’re in district B, you go to school B. There might be a lot of information about what they do, but people treat it as: I’m in this district, so I go to this school. Then they change the rule: You can go to either school no matter where you live. Suddenly there is motivation to compare. You had the information before, but no motivation to compare, because the schools were not in the same space of choice, the same evaluative field.
Now they are, so you find ways to compare them: graduation rates, what colleges people get into, how many AP classes they teach. And that affects the schools. Suppose one gets less popular because it doesn’t teach many AP classes. They were offering an individualized curriculum, but now everyone’s going to the other school, so they say, “We’ve got to teach AP classes too.” The process homogenizes the two schools, so they can compete. That’s not the only possible result. They could specialize, with one becoming the school for freshman and sophomore years, the other becoming the school for junior and senior years. But if they don’t recreate a normative barrier, you get homogenization from comparison.
As more things enter the same evaluative field, you make comparisons you never used to be able to make.
Thompson: There are three pieces I’m trying to keep straight.
One, the upstream phenomenon of the uni-context. Two, the downstream phenomenon of more fields of comparison. Three, the further downstream phenomenon of homogenization.
This is where the theory really starts to sing for me, because I think about sports. As the analytics revolution came for baseball, you had all these teams in possession of the same statistics by which they could compare players. Previously, you had 30 teams using their own private scouts, so their analysis was more context-dependent. But when an easily calculable statistic like on-base percentage or WAR becomes the conventional way to evaluate whether a player is good, all the players become part of the same comparative set. You can rank them one-to-250 easily on a spreadsheet.
But analytics didn’t just lead to more math, or more comparison. It led to more homogenization of strategy. One of the great critiques of baseball has been that every team essentially does the exact same thing: it’s the same strategies for pitchers; the same strategies for hitters; the three true outcomes; all the batters swinging for the fences. So you have the uni-context creating a comparative field, in this case analytics, which leads to homogenization.
Callard: What you said reminded me that I have a theory of the inflection point for the uni-context. I don’t think it started five or ten years ago. The moment it really showed up was around 1910.
One century ago, there were a bunch of people looking around at the world, thinking: What the hell is happening? Did culture break? A lot of those people were novelists, and they wrote a new kind of novel called the modernist novel, which is a novel about how to live in a world in which the uni-context is just coming into existence. Theorists of the time—such as Georg Simmel, Max Weber, and Martin Heidegger—they noticed something weird was going on. They tended to describe it in terms that sound almost like the opposite of the uni-context. They described it as the fragmentation of everything. All of a sudden, they said, everything is breaking apart. That was my first clue.
The reason I thought of this is that you said everything is becoming homogenous, and I thought, “in a way, yes, but that’s a later effect.” The first thing that happens when a bunch of stuff is unified in a single evaluative field is that you feel overwhelmed by your choices. It feels like stuff is fragmented, because you don’t know how to compare these things, because you haven’t yet developed technologies of comparing them.
So, the early feeling of the uni-context was a feeling of the world being fragmented. If you were a medieval peasant doing art, you were in art’s normative world. If you were in the church, you were in the church’s normative world. But in the 20th century, around World War I, you start to think: How do we reconcile the schoolteacher turned murderer, the soldier? How do we think about the relationship between art and religion? We’re suddenly trying to compare all these different values inside a single context, and the world feels dis-unified. Eventually we get technologies of commensurability. What fragmentation really means—and that part was invisible to these writers—is that suddenly everything is part of the same evaluative field. That’s why you experience a multiplicity where you used to experience one thing at a time…
There’s much more, all of it provocative. Here, the conclusion…
Thompson: I want to know what we should do about this.
A simple answer might be: When you’re having dinner with your family, you can be present with your family, or you can be on your phone, which is a universal room that makes you everywhere at once. So put away the phone. But that feels like a cheap and predictable answer. Do you have something prescriptive that isn’t just “put away the phone at family dinner?”
Callard: The question of whether the uni-context is good or bad is loaded, because the uni-context struggles to see good things. It’s better at seeing bad things. Pretty much everyone who hears me talk about the uni-context immediately responds that it’s bad. I’ve never had anyone say, “The uni-context sounds great!”But the thing is that this supposedly bad thing is a thing we’re creating. We’re choosing it over and over again. Even me talking to you from far away about an abstract thing [is the uni-context.]
The uni-context is a space of unruliness. It’s a space in which a certain thing about humanity gets expressed, namely our deep aversion to “world closure.” For almost all of human history, we have lived in closed little worlds, and those worlds presented themselves as the only world. A series of contexts presented the person with direction—here’s what you should do. What we are moving toward is a “world openness” that we hunger after, where I’m not just going to do things a certain way because that’s how we do things or where I was born.
Antonio Gramsci famously said, “the old world is dying, and the new world struggles to be born: now is the time of monsters.” So, how do we use openness, as Callard describes it, as space in which to create a world in which we want to live? How do we recover the wisdom imbedded in context– the accreted shell of our shared history– without context’s reactionary trappings? How do we build anew a better world?
In any case, once you learn what the “uni-context” is, you won’t stop seeing it everywhere: “A Philosopher’s One-Word Theory to Explain Why the World Feels So Weird,” from @dkthomp.bsky.social and @agcallard.bsky.social.
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As we muse on milieu, we might recall that it was on this date in 1963 that The Essex (a singing group composed of four active-duty Marines) reached #1 on Billboard R&B chart with their first release “Easier Said Than Done” (which had been intended as the B-Side of the record); it went on to top Billboard‘s Hot 100, and was the biggest hit of their career.
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