A Conflict of Visions
Two new books predict entirely different futures for the U.S., China, and the world.
Looking at the events of recent years, it's easy to get the impression that history has accelerated. Brexit, Trump, increasing tensions between the U.S. and China, the rise of wokeness, the pandemic, and now the war in Ukraine all seem to confirm this sentiment. The future is arriving sooner than expected.
Technologist and venture capitalist Balaji Srinivasan and geopolitical analyst Peter Zeihan offer two visions of our future. Their respective views of America, the world economy, and the rivalry between the U.S. and China betray profound and essential differences, foregrounding the most decisive issues of the years to come.
Zeihan has summed up his outlook in The End of the World Is Just the Beginning, published this year. In his view, the two most important factors in global affairs remain geography and demographics. From consideration of those factors stems his great optimism about America's future: the U.S. has been dealt too strong a hand for the political class to squander: "It has never been about them. And by 'them' I don't simply mean the unfettered wackadoos of contemporary America's radicalized Left and Right, I mean America's political players in general." Domestic political polarization is irrelevant, in Zeihan’s thought, as if disastrous policies cannot destroy a country's natural strengths.
The U.S. indeed has plenty of natural strengths. No country in the world has as much high-quality farmland, and the U.S. agricultural supply chain is entirely contained in North America. Unlike most of the world, food security is not an issue for the U.S. The shale revolution has granted the U.S. not only energy independence, but also its position as the world's largest oil producer. It lies closer to the equator than any other First World country, so in the field of solar power, too, U.S. potential is robust. Well-structured internal waterways make internal transportation costs lower than anywhere else.
Zeihan maintains that cheap inputs in the form of energy and land have set in motion a reindustrialization process that is only gaining momentum. America is the only great power that has large population centers on the shores of two oceans. This presents it with great opportunities for commercial and military expansion in most areas of the world that matter. Its neighbors do not pose a threat, and indeed Canada, Mexico, and America have created a common sphere of trade. To top it all, to threaten the U.S., someone would first have to defeat the U.S. Navy, which is estimated to be ten times more powerful than the navies of the rest of the world combined.
Aside from its ideal location, energy resources, and food independence, the U.S. also has a favorable demographic situation when compared to the rest of the world. American millennials are a large enough group that the standard of living and consumption will remain sustainable: there will be someone to pay taxes, to save and invest, and to have children. The U.S. doesn't need the world and, Zeihan argues, will go its own way.
Let us consider the world a United States going its own way will leave behind. After the Second World War, the U.S. created an alliance against the Soviets that was cemented by a security environment allowing everyone to trade with everyone. When the USSR collapsed, the U.S. continued to maintain this order, although its original purpose was fulfilled. Everyone traded peacefully, knowing that the Americans were protecting the oceans. Military rivalries between those who participated in the Bretton Woods order were banned, old hostilities were muted, and budgets were allocated to development and education instead of armaments.
This golden era, Zeihan notes, was artificial and will not return in our lifetime. We must look at the map with fresh eyes. Without a global U.S. Navy, long-haul shipping will cease to be the norm and become the exception again. The time of pirates and privateers is coming, and the world of interstate relations will become more Hobbesian. The era of free and unlimited access to raw materials, supply chains, and markets is passing. Resources will again have to be fought for.
The age of globalization was one of "irrational exuberance." Never before has there been as much capital in the world as there was in the fiat money era, and "cheap credit grants people and firms who normally couldn't be in the game the illusion of undefeatability." Demographic structures of Western and Asian societies are aging rapidly; the boomer generation—the largest generation in human history—will retire entirely in this decade. Along with it, a huge pool of capital will disappear, because retirees don’t invest as much. Their mass retirement will mean a huge contraction of funds coming into the budgets, since they will stop paying taxes. Generous welfare systems will become societal suicidal pacts.
This demographic and deglobalizing transition will have a devastating impact in other areas as well. Technological progress in most parts of the world will slow down substantially as there will be a shortage of skilled workers, markets, and financing. Even more frightening seems the specter of famine looming over the world. In a fluid security environment many countries will not be able to buy fuel for their machinery, import fertilizers, or simply food. High borrowing costs will further deteriorate the dire state of agriculture. For most countries, energy self-sufficiency is not feasible. The inability to buy energy on the markets will mean for them not only a lowering of living standards, but a complete exit from modernity. Greentech won't be a solution, as it needs “correct geography,” something that few places in the world can boast of.
The Americans will concentrate on the Western Hemisphere; a version of the Monroe Doctrine will be revived. They will be strong enough to keep problems of Eastern Hemisphere from spilling over into their zone of influence. Zeihan predicts that by 2040, the U.S. will be reindustrialized; millennials will come of age, pumping their capital into the economy, all while the rest of the world is scrambling to pick up the remnants of the defunct global economic system.
"The entire concept of the Order is that the United States disadvantages itself economically in order to purchase the loyalty of a global alliance. That is what globalization is. The past several decades haven't been an American Century. They've been an American sacrifice," writes Zeihan. In the new era, the gap between the U.S. and the rest of the world will be even wider than at the apex of the unipolar moment. "Never before in human history has the premier power from the previous era emerged so unassailably dominant at the beginning of the next."
Balaji Srinivasan argues for an opposite future in The Network State. America is running out of time; rather than geography and demographics, technology and politics seem of greatest importance to him. Whereas to Zeihan domestic politics are nothing but noise, for Srinivasan, "the question of what America's role in the world should be next remains unanswered, because the question of what America represents at home remains unanswered."
In his eyes, the U.S. is in a state of deep crisis, if not decadence. One visible manifestation is the decline of capacity to build in the physical world. What is essential about the current predicament, however, is power relations. Watergate, according to Srinivasan, represents the moment—contrary to its romantic myth—when the American state lost its autonomy. It was then that a takeover was executed by media corporations, which "cooperated to get Nixon fired and the Pentagon Papers leaked, proving that the control circuitry outside the State was upstream of the mere elected government and US military" (it's worth noting that Éric Zemmour interprets the event in the same manner).
The doctrine peddled by the network exerting control over the state—the "NYT Establishment" as Srinivasan calls it—has changed the face of America: “Woke America is to America as Soviet Russia was to Russia. It is the most left-wing country in the world, the place where whites go to the back of the line for vaccinations and the self-admitted sponsor of global revolution. Its core premise is ethnomasochism, which can be paraphrased as ‘white people are the worst.’” Under the sway of the establishment, America has not only turned into a country of ethnomasochism, but has introduced an unhealthy, sterile culture. Srinivasan points out that the authoritarian left puts on a pedestal not NASA or Space X, but Watergate. When “what’s applauded is putting a man out of work, rather than putting a man on the Moon, there will be a lot of cancellation and not a lot of creation.”
The confirmation of the power of this network, symbolized by the “NYT Establishment,” occurred in January of 2021. It was the Watergate of the digital age: tech corporations decided to expel the sitting president and his supporters from social media. Americans could see again that "the people with their fingers on the button are no longer elected officials of the state. Does the US government feel like it is in charge? That is what Network > State means."
Srinivasan explains the acute polarization in the United States by the fact that the internet has allowed the creation of a counter-network. Thanks to the internet, we could learn the historical truth and see that the NYT establishment is not standing up for moral good, but for its own power. The internet economically wrecked the legacy media. In turn these have seen that using certain words and phrases—the extreme vocabulary of woke—increases popularity, website traffic, and, therefore, advertising revenue.
While Zeihan does not believe, as was mentioned, that America's political polarization can affect its historical destiny, Srinivasan takes the opposite view. He claims that a Cold Civil War is a likely scenario ("cold" because the battlefield will be mostly digital, but as so much of our lives have moved to the digital world, its consequences will still be material and painful). On one side, rallied around the federal government, will be the NYT establishment, the woke, Democrats, and those who will side with the dollar due to their support of the status quo. They will be convinced that they are defending "democracy" against "insurrectionists." The second camp will consist of individual state governments, Republicans, decentralized media, Bitcoin holders, and Bitcoin maximalists. They will be united by the belief that they are protecting freedom.
Srinivasan thinks that big Silicon Valley companies will play a key role in this civil war. They will become the establishment's digital strong arm in the fight against "insurrectionists," deplatforming, cutting off services, and conducting surveillance. One of the networks that will resist will be Bitcoin. The technologist imagines that a seizure of Bitcoin by the bankrupting government could trigger open conflict. The woke establishment and Big Tech, Srinivasan predicts in this scenario, will mimic the CCP's methods, just as they have already copied China's lockdown in response to Covid. Nevertheless, the U.S. surveillance state will be incompetent, "tragicomic," as Srinivasan puts it, just like everything the U.S. establishment creates today, so dissidents will not be without a chance.
Srinivasan defines the divide between left and right in an interesting way. Left and right are not at all two distinct ideologies, but rather strategic positions and associated tactics in a competition for limited resources. Left-wing, revolutionary tactics involve challenging the legitimacy of the existing order, attacking it as unjust, and seeking redistribution of resources (whether it be power, money, or status). The right-wing tactic is to defend the existing distribution of resources and power arrangements, while proclaiming that the left will unleash chaos and wipe out everything.
Today, it is the Democrats who use conservative tactics, being the party of the country's ruling class, while the Republicans, Srinivasan argues, are the party of the revolutionary class, aiming to overthrow the system. The Democrats display right-wing traits: they fight freedom of speech, create bureaus of disinformation, script ads recruiting for the CIA, mount LGBT flags on helicopters, and allocate two billion for policing on Capitol Hill. Republicans, on the contrary, are in a weaker position, lack power and behave like the left: they criticize U.S. imperialism, oppose war and military aid, are in favor of anti-discrimination laws to protect Republicans, lobby for freedom of speech.
“Over time, if history is any guide, the independent thinkers will move away from the ruling class to the revolutionary class, while a much larger group of herd-minded followers will join the ruling class.” Democrats are part of the ruling class, but "are losing talent." This last remark means that, in Srinivasan's vision, America still has a chance to regenerate, since the best and the brightest will stand up against the woke, the Democrats, and the establishment. Despite this, Srinivasan is quite pessimistic and expresses concern that the Cold Civil War could debilitate the U.S. so much that it will lose a New Cold War to China.
Zeihan's and Srinivasan's ideas again differ sharply on the question of China. According to the author of The End of the World Is Just the Beginning, China:
almost certainly faces political disintegration and even de-civilization. And it does so against a backdrop of an already disintegrating demography. The outstanding question for all things Chinese is simple: Will it collapse completely? Or will portions of China be able to hold on by its fingernails so that outside powers might treat it in the same way that they will treat...sub-Saharan Africa?
Zeihan believes Chinese domestic consumption will diminish due to a rapidly aging population—China is the fastest aging society in human history—and it will lose export markets as a result of deglobalization. Worse for China, it won't be able to secure energy supplies and raw materials to keep the country running. The fact that it won't be able to import inputs to produce food means that famine awaits them (the Chinese seem to realize this and are attempting to do something about it by building stockpiles of food). As if that weren’t enough, the Chinese have created the biggest and most unsustainable credit boom in human history. This bubble is about to burst, and "the Chinese will exit the modern world just as they entered it: with a big splash."
In Zeihan's account, China represents no challenge to the U.S. As the biggest loser of deglobalization, it will cease to be a threat to America. However, history provides examples of declining powers behaving unpredictably. Hal Brands points out that "the most dangerous trajectory in world politics is a long rise followed by the prospect of a sharp decline.” Another warning against triumphalism comes, for example, from Elbridge Colby, who alerts that "the industrial competencies required for sustained conventional warfare have atrophied," and the U.S. may be incapable of waging a major war should the Chinese pursue conflict. Still other analysts caution that China will avoid a "hard fall," and "any decline from China's economic peak is likely to be gradual and possibly eased by heavy spending on research and development explicitly aimed at partially offsetting the country's demographic and debt-related woes.”
Srinivasan does not believe that China has already lost. Contrary to Zeihan's determinism, Srinivasan believes technology and the quality of leaders have something to say here, and China is a country where engineers play an important role in politics, not just professional politicians and lawyers as in the West. The author of The Network State directly contests Zeihan’s demographic predictions. First, robotization may offset losses. Second, the CCP is trying every possible measure to boost birth rates. They are well aware of the problems ahead of them, and the quality of their leadership elite and institutions allows for "absolute hairpin turns in policy.”
Robotization is not the only way to overcome demographic disadvantages. If the Chinese achieve a breakthrough in artificial intelligence and their entire economy becomes computable—they have embarked on this path with the introduction of the digital yuan, among other things—there is a possibility that they will be able to optimize their resources to the point of maintaining a very high standard of living. With AI and robotization, they may even be able to break their dependence on other markets and supply chains. It is worth noting that the Chinese themselves are not so optimistic in this respect, as reflected in the words of one top CCP scientist, who stated that "in terms of original innovation capacities, we lack major theoretical breakthroughs and leading original achievements.”
Srinivasan contends that the rest of the world will be presented with a choice between American Anarchy and Chinese Control. Against the backdrop of the collapsing U.S., the highly effective Chinese system, providing high standards of living and stability, will become an object of admiration and imitation, as the CCP will export its turnkey version. Eventually, the U.S. too will copy the Chinese surveillance state, trying to crush freedoms in the name of wokeness.
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The Network State proposes an alternative, in line with the author's conviction that the 21st century belongs neither to the U.S. nor to China, but to the internet.
Srinivasan envisions the emergence of the International Intermediate, a group of non-aligned nations that want neither to follow the footsteps of American Anarchy nor to copy an AI communist order. This will be an age when the rest of the world will have to lead the way. These nations will have the chance to create new structures of cooperation, to opt out of the American and Chinese systems of transactions and communications by leaning on the blockchain technologies of Bitcoin, Ethereum, and Web3. Srinivasan mentions India and Israel, as well as the Visegrad states, as important actors in this new third way. Here enter the network states, "built by pragmatic founders, a group of high-trust communities architected as intentional alternatives to failed states and surveillance states alike" (the concept of network state itself, like many other ideas in Srinivasan's book, deserves a more in-depth treatment than I have provided here, and I invite the reader to become more acquainted with it).
The French philosopher Auguste Comte defined politics as an effort to safely lead society from one age to another. Those who care about steering their own nation through the turbulent changes of our time need to study colliding visions of the future, such as those articulated by Srinivasan and Zeihan. Their boldness sheds light on what lies ahead.