Category: World

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World

The Counterweight that Isn’t

The Muslim World. (Mohsin, OIC Member States, CC BY 3.0)

As the United States comes now to face Russia and China in great power competition, one feels intensely the lack of a unified Muslim world. For one need only take a look at a map to appreciate that it is a dagger at once aimed at the Russian belly and the Chinese back—and has historically been an important antagonist of both empires. There is no question that, were Islam not the geopolitical non-entity that it is today, Russian and Chinese horizons would be badly limited by the need to protect their flanks. Instead, the only threat the Muslim world presents to these countries today is as an enticement to conflict in dividing up its territories in Central Asia.

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World

Atlas Shrugged

After the collapse of the Soviet Union, the United States believed, correctly, that they were the world’s only remaining great power. China was poor. Europe had long been exhausted by its two great 20th century wars, and political collapse in Russia had reduced her to the rank of a middle power—an echo of this view is found in the observation, oft-repeated these days, that the Russian economy is the size of Italy’s. The question then became whether the United States should use its power to police the world, or whether it should allow the lesser powers to mistreat each other or their people.

The first Gulf War seemed to say that, at least when it came to the revision of borders, the United States would police the prevailing territorial status quo. Iraq had annexed Kuwait, and the United States rode in to reverse that outcome. American-led military action also put a stop to Serbian expansionism a few years later, seemingly reinforcing this signal.

The American commitment to protecting individual persons around the world, as opposed to sovereign nations, seemed somewhat weaker, but was by no means non-existent. There was much hand-wringing in Washington about failure to intervene to quell genocide in Rwanda, for example.

The picture of America as sole great power was reinforced over the ensuing decade. The September 11 attacks, carried out by a ragtag group without the backing of any government, suggested that the United States were without any substantial adversary. And the response—the invasion of Afghanistan and the adventure in Iraq—suggested that the United States could strike any nation at will without fear of anything more than a brief tut-tutting from global public opinion.

Then came Russia’s annexation of Crimea in 2014, which challenged America’s claim to sole great power status that had by then prevailed for the past quarter century. The first Gulf War, in 1991, had been a warning to the world: the United States, as sole great power, would not tolerate the revision of borders. Now Russia had chosen to revise a border. Would the United States seek to do to Russia—a country it had treated like a middle power for a quarter century—what it had done to Iraq in 1991?

The response was: crickets. The United States did nothing. And just like that, two new great powers (re)appeared on the world stage: Russia and China.

Things had changed over the past decade or so. First, Russia’s weakness, which had fundamentally been a political weakness caused by the collapse of the Soviet state, was gone; the country had regained political stability and was now once again capable of acting decisively on the world stage. And it still had its nuclear weapons, and plenty of delivery channels, which its Italian-sized economy was more than enough to maintain. Second, breakneck economic growth had vaulted China’s economy into competition with the United States, and her wealth was buying her the military capabilities she would need to be a great power as well.

Great power status is not just about wealth and military power, however. It is a mindset. Britain, France, and Germany could all ramp up military expenditures and challenge the United States. But they do not because they were exhausted mentally by their attempts to maintain their great power status in the 20th century. They are content to play second fiddle to the United States. Russia, however, emerged triumphant from the same wars that exhausted Britain, France, and Germany. And China has waited two centuries to regain what it sees as its rightful place as center of the world. Both countries have the great power mindset.

America’s failure to respond to Crimea suggested that perhaps America had lost it—not the mindset needed to be a great power, but the mindset needed to be the sole great power. For any country that fears war more than it fears loss of status loses its status immediately, and what was at stake was America’s claim to be the guarantor of world order. But America’s stated justification for failing to respond to Crimea was precisely that it feared war.

Russia got the hint immediately, and within the year intervened militarily in the Syrian civil war, propping up a regime that the United States opposed, not least on human rights grounds. With that, Russia had challenged not only America’s commitment to protecting states against states (Ukraine against Russia) but also America’s admittedly much more equivocal commitment to protecting people against human rights violations.

Again, the response was: crickets. The United States was willing to tolerate Russian policing of the very region over which the United States had most asserted its own control over the past 25 years. Americans themselves didn’t seem to notice, but anyone who was paying attention (i.e., the rest of the world) understood this to be a signal humiliation.

Meanwhile, even before Russia’s annexation of Crimea, the Chinese had embarked on a campaign of island building in international waters that China claimed as its own. This was another territorial revision and so another direct challenge to America’s claim to guarantee the territorial status quo.

Here, too, the response was: crickets. And the islands have become a sprawling archipelago.

What we have witnessed over the past ten years is the collapse of the unipolar world order over which the United States presided after the fall of the Berlin Wall. It should be no surprise that Russia would continue to expand territorially in the wake of such a collapse. It will be no surprise when China does as well, not least by retaking Taiwan.

At present, the United States remain the strongest power both economically and militarily. But, particularly in respect of China, that may not continue.

The first question America must answer for herself is: does she want to reestablish her former role as the world’s sole great power? If the answer is yes, then she must fear continued loss of that status more than she fears war. Russia, certainly, values her return to great power status more than she fears war. And that is precisely why she has returned to that status.

So, where do the United States stand on this?

The answer would seem to be: no, America does not want to defend her sole great power status.

And despite enjoying it mightily while it lasted, she perhaps never was willing to suffer anything to protect it. There was, after all, no real risk involved in the first Gulf War; it afforded America the equivalent of “cheap talk” in game theory—an opportunity for empty posturing.

Moreover, if America had wanted the role of sole great power to begin with, she would have exploited the vast nuclear advantage she enjoyed immediately after World War Two to deny Russia the superpower status she later enjoyed.

Having failed to do that, America would, in any event, later have exploited the collapse of the Soviet Union to ensure that Russia never again could pretend to empire.

And America would never have promoted Chinese economic growth in the 1980s, 1990s, and 2000s, for America would have heeded the warning attributed to Napoleon, to wit: “let China sleep, for when she wakes, she will shake the world.”

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World

Calling His Buffer

It makes sense to annex territory that welcomes you. That’s why Crimea went off without a hitch. And so, perhaps, Donbas, too. But Kiev? There would be an insurgency. And the West would supply it. And who would want that? So it’s the Donbas or just a bit of fun watching the West sweat. Either way, the Orange Revolution will still have left the West way, way ahead on this one, for Russia’s longstanding, historic buffer zone (“krain” is a slavic word for a march, and a march is a borderland) will still mostly be on the West’s side. At least for now.

One is struck by how unlike 1939 the situation really is.

Back then, Russia’s buffers were buffers against Germany, and those same buffers were also Germany’s buffers against Russia. And the West, in the sense of Britain and France, did not border those buffers at all. When Poland (the buffer at issue back then) sided with the West, it had no prospect of support across a land border.

In siding with the West, Poland became of no value to either Germany or Russia, each of which would otherwise have wanted to support it as a buffer against the other. Instead of being a friend of one and a threat to the other, Poland became a threat to both. And so the two powers got together and agreed to divide Poland between themselves via the secret protocol to the Molotov-Ribbentrop Pact.

The West could not oppose this by fomenting trouble in-country—as it certainly can do with Ukraine today—because the West had no land borders with Poland across which to run supplies. To stop it, the West had to go to war. Which it did. Although it never did succeed at saving Poland.

But today, Germany, defeated in the Second World War, is now with the West. And Poland is now with the West. And Russia is down to its last buffers, Belarus and Ukraine. And Ukraine wants out. And has plenty of friends on its western borders.

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Civilization Miscellany World

The Danger of Climate Certainty

We know from the study of social insurance that uncertainty—regarding whom a misfortune will strike—is a great spur to social behavior. It is the veil of ignorance that makes the healthy pay for the medical care of the sick. It is only because the healthy pay their premiums before they learn, at the end of life, that they did not in fact need to pay them, that the sick can afford medical care.

By the same token, the great spur to collective global action against climate change, such as it exists (and admittedly it does not much), is the fact that no country knows yet quite what the effects of climate change will be. As with all complex changes, that of climate will make winners as well as losers, at least in the medium term. Some countries will be submerged. Otherwise will thaw, or be the beneficiaries of rains diverted by changing weather patterns. But because no country knows yet into which category it will fall, each has some incentive to pay to insure against climate change, just as each of us has an incentive to pay a heath insurance premium.

But as climate change advances, and the consequences for individual countries become easier to predict, that incentive will lessen, at least for the countries that stand to benefit. If it becomes clear, for example, that the zone of arable land will shift northward into Canada and Siberia, then Canada and Russia—or the countries in the best position to invade or dominate them—may find it more expedient to promote climate change than to ward it off, just as improvements in the use of genetics to predict health outcomes may one day give some people the confidence not to buy health insurance.

Indeed, one can imagine not only Canada and Russia pulling for climate change if the arable zone ends up moving northward, but also China, which teems on Siberia’s southern border and has a historical claim to the territory. As soon as it were to become clear that Siberia would replace America as breadbasket to the world, China would have an immense prize right on her doorstep. It would be in her interest to carry climate change forward, at least long enough to cement her new strategic advantage.

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Civilization Despair Regulation World

The Free-Market-Will-Save-Us Theory of Great Power Competition

First it was: China cannot succeed because she does not have a free market.

Then it was: China is going to be our friend because she has embraced the free market.

Now it is: China is secretly going into decline because she has turned away from the free market.

Maybe that’s right.

Or maybe we are just very, very high on our own supply.

I do not recall that German markets were free in 1939. I do not recall that German markets were free in 1914. I do not recall that Japanese markets were free in 1931.

In fact, I do not recall that American markets were free in 1941. One quarter of the American economy by GDP was subject to price regulation as a result of the New Deal and decades of progressive activism.

And that was before we entered the war and FDR imposed wage and price controls.

And, you know, we won.

But not alone. Russia did most of the fighting.

And Russia had a command economy.

The free market does have its charms. But please, enough of the you-can’t-be-a-great-power-unless-you-run-on-Reaganomics.

That’s a great way to underestimate your adversaries.

And get killed.

Categories
Philoeconomica Regulation World

Magic Markets: Looking Down on China for the Wrong Reasons Edition

Foreign Policy’s normally pretty good China Brief has this bit of magical thinking about markets today:

But clashing economic and governmental incentives, not generator capacity, are causing the problems [with China’s electricity supply]. Fifty-six percent of China’s power comes from coal, and thermal coal prices have more than doubled around the world after the initial shock of the pandemic. . . . In most countries, these prices would be passed on to consumers, but Beijing tightly limits the maximum price of electricity—causing generators to reduce their supply or shut down rather than lose money.

Palmer J., China Faces an Electricity Crisis. Foreign Policy. September 30, 2021.

Um, if there’s not enough low-cost electricity capacity in China then there’s not enough low-cost electricity capacity in China. Raising prices won’t make the blackouts stop, unless you happen to consider “blackout” too ugly a term to use for having your electricity cut off because you missed your payment. All raising prices will do is ensure that the rich get more of a limited electricity supply, and the poor less. But you don’t need to take my word for it. Just ask Texas.

It’s hard to believe that in 2021 Foreign Policy is still trying to teach China lessons about the virtues of unregulated markets. I mean, this is a country that went from nothing in 1980 to having an economy that’s 20% larger than ours today by purchasing power parity, nationwide blackouts due to the country’s resource poverty notwithstanding. It might be time for us to learn a thing or two from China about how to handle resource constraints equitably.

Or at least to put down our market fetish and actually study a bit of basic economics.

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Civilization World

Defeat as Model

America rested its policy toward China in the crucial decades of the 1990s and 2000s on the notion that China did not aspire to become a great power but only a wealthy and free one, and so America encouraged Chinese development at every turn. America’s model, oddly enough, was Europe. She looked at Britain, France, and Germany—all wealthy, free, and perfectly happy to submit to American greatness—and she supposed that was all that China wanted. America did not stop to consider why Britain, France, and Germany so happily lacked ambition.

The answer was that all three were defeated powers.

France exhausted herself mentally on the battlefields of the First World War and thereafter, as A.J.P. Taylor has noted, came to fear war more than she feared defeat, a sure sign of the demise of a great power. Britain exhausted herself mentally on the battlefields of the Second World War. And Germany was physically defeated. (Not twice—1918 left the state intact—but once in the Second World War.) It is defeat, mental and physical, that explains the docility of Europe in our age.

It was pure folly for America to suppose that China—or, indeed, Russia, which America viewed through the same lens during this period—would aspire to defeat. China was, of course, defeated in the 19th century and again in the early 20th. But that was the old China. As a modern power, she has never been defeated; why would she not aspire to greatness? Similarly, Russia, so far from being exhausted by the Second World War, went on to enjoy decades of superpower status from which she fell not through defeat by an outside power (no, America did not spend Russia into collapse—how characteristic of a business culture to imagine death by spending) but through internal upheaval. Why should she not continue to aspire too once she had reestablished internal stability?

Europe’s docility, and the international order that it exudes, reminds us that order in human affairs—within countries as much as between them—is always the child of defeat. Great nations of law-abiding citizens are themselves nothing but concentrations of hunter-gatherers whose will to live independent of the state has been crushed so completely that they have forgotten that they ever had one. The really extraordinary thing about American policy during those crucial decades was that America looked at order in Europe and saw not defeat but kumbaya.

Order requires defeat and defeat requires: defeat. Not physical, necessarily, but, certainly, mental. How will we get it over the next few decades, and who will suffer it?

One wonders.

Categories
Civilization Meta Miscellany World

Why Do Mechanical Explanations of the Social Deny Software?

They say that a good social theory must throw out some reality in order to have any explanatory power. Thinkers who favor mechanical explanations of the social—the people who claim that it is climate or asteroids or guns, germs, and steel that explain the rise and fall of civilizations—always seem to throw out the part of the mechanism that is the software. Why?

That is, all mechanistic explanations of the social treat people as machines—robots—that have certain operating limits. They need food and water. They need temperatures that are not too high and not too low. They cannot withstand the slash of a steel weapon. They are susceptible to disease. And so on and all true. These operating limits do constrain what the robots can do. But that is far from all.

Robots need an instruction set to run; they need, in other words, a behavior. And if the dawn of the age of artificial intelligence should be teaching us anything, it is that behavior matters a lot. There is a very big difference between a car, a car that knows to break before hitting something on the highway, and a self-driving car. There is a very big difference between a Rhoomba that moves only in straight lines and one that criss-crosses the room. It would seem to follow that the robots’ software should matter a lot in the rise and fall of civilizations. So why not make social theory by keeping the software and throwing out the robot hardware instead?

Programming in the social is thought, belief, training, worship, prejudice, emotion, philosophy, literature, letters, culture, art. It is the humanities. Humanistic explanations for things—Ruskin’s observation that you can read the decline of a civilization in its art—theorize the social in terms of the human robot’s programming. The humanities throw out the hardware.

(By programming I do not mean that we are necessarily controlled by others. In human beings we are dealing with semi-autonomous, artificially (nay, actually!) intelligent robots. So programming, for us, necessarily means self-programming at both the individual and social levels. Our programs are some peculiar function of inputs from other robots, inputs from the programs of the robots themselves (that is, we use our thought to influence ourselves), and hard-coded inputs (those determined by our genes).)

It is a peculiar thing that at the same moment that, as a technological matter, we are coming to recognize the transformative nature of artificial intelligence in relation to hardware, and indeed at the same moment that, thanks to the great financial success of companies like Google and Facebook, which derives entirely from the value of connecting businesses with individual minds, we are coming to appreciate the great difference influence over minds makes in social outcomes, we should continue to favor mechanical explanations for the social, to attribute the fall of Rome to barbarian invasions rather than decadence, or the rise of China to good policy rather than good spirit.

When we do consider the software, we tend to ignore the most important parts. We credit the power of propaganda, but not the power of religion, ideas, philosophy, love, or, indeed, art. But these too are a part of the programming, and if you judge by the things you yourself hold most dear, likely the most important part.

So do not tell me that talking won’t work. That writing will never change things. That symbolic protest is weak. Or that the only political power grows out of the barrel of a gun—unless you believe that your computer will behave the same no matter what software it runs.

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Meta Miscellany World

If Mars Attacks, It Will Be Us

Maybe the best Martian policy would be to prevent anyone from colonizing Mars, rather than to colonize it first.

Let’s assume for a moment that Mars really can be developed into a self-sufficient Earth 2.0. A big if, of course.

But if true, then see: The New World.

Settlers always have high asabiya, thanks to the challenges they face, and homogeneous interests relative to those who remain in the Old World, with its historic divisions. The Old World always thinks it can control the new, otherwise it wouldn’t foolishly bankroll settlers. But the new is far, far away. It is protected by distance. It is bigger than the territory of any one mother country.

And because it is united—or will become united, because, again, regardless of the origin of the settlers, their interests are always more in common with each other than with those of their mother countries—it can exploit this bounty at scales that no one mother country can ever hope to match.

So, eventually, the new will know its own power and come to dominate the old.

It has, after all, happened before.

And even if we don’t think Mars might be viable, or we think it might be more likely to make a Cuba than a U.S.A., why risk it?

Indeed, colonizing activity by a dominant country is always a self-inflicted wound. Colonization necessarily dilutes the dominant country’s power, because any new territories dilute the power of the earth entire. If I’m two thirds of one and I add one, now I’m one third. The only reason to colonize is to preclude others from doing so; it’s a race to the bottom.

But you can also try to enforce a rule against racing.

And if you were wondering why, in the 15th century, it was the Spaniards who went off looking for new worlds, and not the great powers of the day, not the Ottomans or the Chinese, you have your answer.

Categories
Monopolization World

Unlearning Trade

First we thought the inherent superiority of our political system would defeat the Chinese Communist Party. Now that we’re coming to terms with the fact that it didn’t, we seem to think that the inherent superiority of free markets will defeat China instead.

Clearly, we’re not taking learning in account.

But I don’t mean that we haven’t learned from our mistaken view that China would become more democratic as it became wealthier.

I mean that in assuming that China’s embrace of a new closed door policy will cause its technological competitiveness to wither, we are literally failing to take the relationship between learning and output into account.

The Wall Street Journal argues that by picking fights with the West, and getting itself banned from engaging in semiconductor trade with the US as a result, China has put itself in the deeply wasteful position of having to recreate a native semiconductor industry from scratch. If the moonshot fails, Chinese high tech firms will lag, and the country’s race to global dominance will be lost.

It would have been much better, argues the Journal, for China to have continued to make nice with the West and enjoy the benefits of trade, not least of which is the ability to leverage what others do best—like making semiconductors—to enable China to do what it does best—like making smartphones and 5G infrastructure.

The Achilles heel of this and all free trade arguments is that they don’t take innovation into account, and specifically that most valuable of all forms of innovation: learning by doing.

The fact that China is not an efficient producer of semiconductors today, and would be better off trading with those who are, does not mean that China cannot learn to be an efficient producer of semiconductors tomorrow.

And if China is able to learn, then the money it pours into starting more or less from scratch now won’t be wasted.

Instead, it will be the most important investment China has ever made, because it will buy not only a valuable skill, but something more valuable still: independence and a shot at world domination. The future belongs to high tech, the hardest thing to do in high tech is chips, and so if you’ve got the best chips, you will win eventually.

The key to learning is doing: the more you make, the better you get at making, which is why semiconductors have a downward sloping learning curve. As production volumes increase, cost falls and falls and falls.

That in turn means that if you want to produce the difficult-to-make things that render countries rich and powerful, the opposite of free trade dogma is required: you must shut out foreign competition, freeing up domestic demand for your native industries, so that those industries can ramp up supply and start marching down the learning curve.

If you don’t do that, then your domestic market will buy from foreign producers, helping them learn, not you.

Of course, too much protection can also be a problem. If your domestic industries are not subject to competitive pressures, they won’t have an incentive to learn. That can particularly vex small countries whose internal demand can only support one or two firms in a given market. But for a country the size of China, that’s not a problem. (Indeed, it’s no accident that free trade ideology has roots in Western Europe, home to lots of small- and medium-sized countries.)

So by picking fights with the West at a moment in its development when it has plenty of domestic demand for semiconductors (think Huawei) China is really just binding itself to the mast: committing its domestic market to its native semiconductor operations. It is forcing itself to learn.

And China does know how to learn. America installed the first solar panel in 1956, on the Vanguard I satellite. But at that time a single panel cost the equivalent of $500,000 today, meaning that we weren’t very good at applying the technology. As we made more solar panels, however, we got much better, as the solar learning curve below shows. But by the early 2000s learning had stagnated at around $5 per module.

Then China, which is energy poor but for coal—a mature technology that promises few gains from innovation—embraced solar, installing panels across its vast peripheral deserts.

By doing, China learned to do better, driving price south of 50 cents per module by 2019, making solar power the cheapest in the world today, more so even than coal or gas, and coming to dominate the global solar industry.

Will China walk just as quickly down the semiconductor learning curve? You can bet on it. And the country’s leadership in the new technology of quantum computing—the future of chips—means that it is not starting all that far behind its global competitors.

So when the Wall Street Journal says things like this:

Beijing is essentially now engaged in a massive, long-shot attempt to build from the ground up an advanced semiconductor manufacturing capability that doesn’t depend on foreign suppliers—churning through gargantuan amounts of the Chinese people’s money in the process. Rather than trying to reinvent the wheel, a better economic strategy would be to mend its relations with the West and reform China’s dysfunctional credit system—then import chips and let Chinese markets and Chinese companies decide what China is really good at.

Nathaniel Taplin, China’s State Capitalism Collides With Its Technological Ambitions, Wall St. J. (Jan. 2, 2021).

I have to wonder at its lack of learning.

And as I have pointed out elsewhere, the really funny thing about this mode of thought—the notion that a country is better off not trying to do the things that it is not right now good at doing—is that those who love it most also tend to be those who, when they turn their gaze to domestic markets, talk most about innovation and learning, and the need to protect firms from too much competition in order to promote them.

They argue in favor of monopoly and against regulation at home on the ground that shelter from competition is a necessary reward for innovation, that though big firms may destroy “static competition”—competition over price by firms with fixed levels of technical skill—doing so actually enables “dynamic competition”—competition to learn and innovate that eventually leads to far greater benefits for society.

So they ought to know better than to assume that a new Chinese closed door policy will save America from China.

Indeed, the Journal’s faith in free trade reminds me a bit of Ah Q, the eponymous antihero of The True Story of Ah Q, by the great early 20th century Chinese writer Lu Xun.

Ah Q’s talent, you see, was convincing himself he was the winner whenever he lost a fight.

To be sure, Ah Q was a metaphor for the much-oppressed China of a century ago, whereas America is still on top today.

But mentality is fate.