Genre: Money & Monetary Policy
Author: Ian Bremmer
Title: Every Nation for Itself (Buy the Book)
The world is entering a transition period which the author of “Every Nation For Itself” labels as the GZero.
During the G-Zero, less global leadership will be available for two simple reasons: the U.S. is too financially indebted and war weary to continue its full historic role in foreign affairs, and emerging nations, like China, are not yet ready, or willing, to take on a vastly larger role. Nor are any of the world’s historic global public organizations (NATO, World Bank, IMF, United Nations) even remotely able to fill the void.
In fact, they are now largely outdated and increasingly ineffective.
This transition period will ultimately lead to a yet to be determined new world order and is currently of indeterminable length. The only likely accelerant through this transition period is a major global calamity.
Thus, during this period, it is likely that economic and political collaboration will be increasingly problematic and that the odds that we are entering a period of “Every Nation for Itself” are rising. America, for instance, can no longer contribute more so that others, like Europe and Japan, can do less.
This book is an attempt to summarize why this is occurring now, what potential routes through this transition might be, as well as to provide some insights into specific issues and outcomes that seem likely. In doing so, a “road map” through this unusual emerging time is established.
During this transition all relevant nations will sort themselves out along lines based on the diversity of their economic and political relationships and their agility in adapting to the emerging threats and opportunities.
According to the authors, nations will evolve into one of the following categories, all of which are outlined in the full report.
- Pivot States (Canada, Brazil, Eastern Europe, Turkey, Indonesia, Vietnam, Singapore, China, Africa)
- Rogues with Powerful Friends (Iran, etc.)
- Adapters (Ireland, India’s Tata Group)
- Referees (NATO, United Nations, IMF, World Bank, NGO’s)
- Exposed states (Japan, Taiwan, Israel)
- Shadow States (Mexico, Ukraine)
- Rogues Without Friends (Libya)
Winners and Losers:
• United States, Vietnam
China is the country least likely to evolve along a predictable path.
Two questions must be answered in order to envision the new international order:
- Will the U.S. and China act as partners or enemies?
- Will others have the strength to play a crucial, independent role in the international order?
The likeliest post-G-Zero scenarios are based on U.S.-Chinese relations and the comparable strength of other nations. They are as follows:
- G2, or U.S.-Chinese Partnership
- A concert of nations
- A Cold War 2.0
- A world of regions
- A potential “G-Subzero,” which is deemed highly unlikely
A summary defining each of the potential scenarios above can be found in the full version of this Titan Brief.
Significant Additional Observations:
- We have moved away from a world afraid of “mutual military destruction” to one concerned about “mutual economic destruction”.
- “War” will be increasingly conducted in cyberspace and directed against private enterprise and infrastructure.
- Expect a surge in global protectionism, comprised of greater investment limits and new trade barriers.
- Enforcing global standards will be difficult and sanctions are likely to be less effective.
- The US dollar will be challenged, but will retain its role as the world’s reserve currency and the U.S. will remain the world’s lender of last resort.
- There will be a fierce debate regarding the final determination of global standards for the global communications and information sectors, primarily between the U.S. and China.
- This will result in a battle for control of the Internet and, if China prevails, result in a dismantling of the World Wide Web as it currently exists.
- Climate control will split nations between developing nations whose current economic evolution requires higher levels of pollutants and developed nations whose economic status requires lower pollutants. The developing nations will either want lower standards or for the developed economies to pay a disproportionate percentage of the future costs. China and the U.S. are the two cornerstones of each perspective, and collectively create 40% of the world’s climate change effects.
- Food security and access to adequate amounts of drinkable water will be an increasingly important issue as people transition into cities across the globe.
What Is the G-Zero?
In a leaderless world, no one has the power to impose solutions to the world’s greatest conflicts. Common ground among established and emerging powers is not sufficient to negotiate international agreements.
This is the G-Zero, “a world order in which no single country or durable alliance of countries can meet the challenges of global leadership.”
To thwart conflict, grow the economy, handle energy needs, enact policies, counter threats and more, the world needs cooperative leaders who are willing and able to assume burdens. Although several states have the ability to keep the global community from taking action, not one has the political or economic muscle to reconstruct the status quo.
America and the Cost of Leadership
This is an age of austerity, where Americans care more about solving internal challenges than they do handling global turmoil and humanitarian calamities. This is partially due to Americans’ growing skepticism of globalization. Americans’ belief that the U.S. should “mind its own business internationally” is at a fifty-year high.
While the U.S. public loses tolerance with new troop commitments, Washington will have to depend on economic pressure and diplomatic force to control dilemmas. A growing number of Americans do not recognize the unique and indispensable role the United States plays in advocating democracy and maintaining tranquility.
Don’t Look to Europe or Japan
No nation or alliance has the resources or self-confidence to fill the expanding leadership vacuum in the near future. Some called for a G3 alliance, between the United States, Europe and Japan; however, there are formidable barriers to the effectiveness this coalition.
Without diligent cooperation, efforts to achieve complex tasks will fail.
Europe will focus its energy on restoring confidence in the Eurozone and enduring the rancor and suspicion among governments that will follow.
That, as well as other near-term conflicts within the EU, will barricade Europe from assuming outside challenges. Nor is Japan, with the third largest economy, ready to accept a greater global role. Japan’s immense debt problems, weak growth, extremely dysfunctional politics and internal catastrophes make it even less likely to take on international responsibilities.
Don’t Look to Emerging Powers
The amount of onerous domestic tasks emerging powers must tackle makes them less likely to vie for a greater share of international leadership. Emergence is a full-time job.
While China is an emerging global superpower, Chinese officials openly admit its inability to reach the next stage of development; that is unless they improve their economic strategy, rebalance efficiency, produce nationwide social safety, and expand international presence. Neither is Russia more likely to take on a global role.
Russia cannot serve as a military heavyweight outside its established domain and needs to expand its commercial power beyond energy exports. India takes prides in its resistance to alliances. Brazil and Turkey may play more diplomatic roles, but limited means and internal pressures will restrict their prominence.
No Strength in Numbers
It is doubtful that the leading global institutions will soon fill this leadership void. The 2008 financial crisis accelerated the transition toward a new order that embraces the rising importance of emerging powers. Only when each member feels threatened by the same problem at the same moment can the G20 make progress.
It is all but impossible to get twenty negotiators to agree when their basic values conflict.
The G20 is becoming as much an arena of conflict as a forum for cooperation. This lack of leadership will have radical effects for most of the toughest problems.
Problems Without Borders
America’s inability and unwillingness to serve as the global policeman will induce combat for supremacy at several levels. Westerners only back military measures when imperative national concerns are at risk.
Given established powers’ lack of intervention, local authorities will be responsible for keeping the peace, and battles will increasingly turn into wars. These contests for regional dominance will probably occur in cyberspace instead of on a battleground.
Developing states will dispute Western beliefs and governments will find ways to restore state control over globalization.
The crucial instruments of power and leverage will be economic, rather than militaristic.
The U.S. has to demonstrate its ability to satisfy long-term fiscal duties and rebuild public confidence. China must alter its economy from reliance on exports toward internal consumption.
Global policy decisions entail rebalancing between excessive consumers, like America, and excessive savers, like China. As emerging powers’ leverage grows, they will push for new organizations; however, this will not induce them to assume a greater leadership role.
The Road to the G-Zero
From The Ashes
The road to G-Zero begins at the height of American dominance. The devastation in Europe and Asia from World War II left few countries ready to play an international role.
Then entered a new superpower: America, the G1.
The economic surge generated in the U.S. during World War II lifted American power to unprecedented heights; the U.S. standard of living rose and unemployment virtually disappeared.
U.S. postwar policy pursued two complementary goals. First, to build trade ties abroad to evade depression, create jobs and expand economic gains. Second, to advocate democracy and derail communism. The overall objective was global peace and prosperity, and the strategy was planned by America and its European allies.
How The West Was Run
Western advantages are no coincidence. The IMF, World Bank and United Nations were all built on Western values. Currencies were pegged to the U.S. dollar, removing instability and friction from global trade. U.S. troops enabled Western Europe to focus on economic development.
Japan’s rise revealed ancient Eastern cultures’ willingness to accept Western capitalist values. Shared trust in free-market democracy and fear of communism promised core unity of purpose. Today, the West hangs on to powers that may no longer represent their share to the global economy.
The Oil Weapon
Oil fueled a direct challenge to Western rule. Oil demand empowered U.S. leadership, until OPEC discovered its power to harm the world’s most powerful economy.
Following the Yom Kippur War (1973) it placed an oil embargo on the U.S., wreaking havoc and causing America’s European allies to withdraw support for its policy in the Middle East. This revealed that few will follow a leader who is not leading toward the promise of peace and prosperity.
Soon manufacturing grew more expensive and foreign consumers had to bear the costs; this brought about the Asian Tigers: South Korea, Taiwan, Hong Kong, Singapore, who became the world’s first emerging markets through reversing the flow of trade via manufacturing hubs and affluent U.S. shoppers.
They earned their stripes by looking beyond borders for growth opportunities. The rebalancing of trade is most evident in the U.S.’ massive trade deficit. As U.S. debt rose, so too did the number of emerging markets and smaller states’ share of global wealth.
The bombs ending World War II marked the ascendence of U.S. military dominance. In a GZero world, enforcing existing rules will demand a unified approach to coercive diplomacy. Creating a new, more credible nonproliferation regime would demand a degree of compromise among established and emerging powers that is no more likely than credible climate change agreement.
Vast growth in China brought transformational disruption. Extensive socioeconomic changes, a widening wealth gap, severe pollution, and various other issues fostered major unrest that remade America’s relationship with China.
To secure a “harmonious” rise and lessen uncertainty, China accepted state capitalism.
Disparity between U.S. and Chinese economic strategies has only expanded; China’s volatile system generates an ever more complex spot for U.S. firms to conduct business. More friction followed the 2008 financial crisis; this marked not only China’s perilous reliance on growth on the U.S. and Europe, but also the crossroads in the U.S.-Chinese balance of power.
China’s growing morale reshaped attitudes toward U.S. firms, and its surging national pride segued into an attack on U.S. policy.
China’s assertiveness led to ill will in America.
After forming economic interdependence, they diverge. It will be a while until U.S. fiscal discipline is restored enough to rebuild American confidence and until China’s dependence eases.
America Free Fall
The financial crisis accelerated a shift in the world’s balance of power from U.S.-dominated global order to one increasingly focused on indispensable emerging powers.
Americans fear that the American dream is no longer attainable.
The cumulative impact of job loss, economic slowdown and recovery, and worries of paying down long-term debt has taken a psychological toll. Worse is the fear that U.S. leaders cannot fix the problems because of the disintegrated political system. Seemingly “overnight,” the U.S. went from being the largest creditor to the largest debtor.
In the G-Zero, Washington will continue to act as a “lender of last resort,” and the U.S. is able to cut defense spending without sacrificing power.
The G-Zero Impact
A world without global leadership will create and complicate various interlocking international challenges. The G-Zero crises echo and exacerbate one another, producing fear that undermines collaborative leadership, in three crucial areas: likely arenas of conflict, the fight over global standards, and the implications for the world’s most basic necessities.
Arenas of Conflict
The Middle East and Asia will generate the most unrest. Though the Middle East is a more imminent risk, Asia is the greatest longer-term global hazard. This region, crucial to the worldwide economy, is home to more rising powers, hot spots and potential conflicts.
The immobility generated by the G-Zero gives rise to opportunities for coordination in most regions, but the Middle East is too divided and Asia is too large.
The most underrated arena of conflict involves cyberthreats. The convergence of systems onto the Internet equips attackers, governments and businesses with many feasible options. The G-Zero dilemma is that every government and institution will defend itself at the expense of others rather than cooperate to design an effective system of collective defense.
Even so, the most consequential arena is the global marketplace; in a G-Zero world, economic muscle, not military might, determines the international balance of power. There will be a surge in global protectionism, comprised of greater investment limits and new trade barriers.
Fight over Global Standards
With simple, uniform and universally accepted rules comes cheaper and more peaceful trade of ideas, information, goods and services. The international standard that emerging states protest most will likely survive the G-Zero: the U.S. dollar.
Dollar dominance has provided Americans with key benefits and served global public good, as the U.S. serves as the lender of last resort.
Despite the fact that emerging powers contend America no longer deserves such a privilege, no viable alternative exists; hence, investors continue to treat the U.S. dollar as the safest currency, even with the U.S. liability in international market turmoil.
International standards under the greatest pressure involve global competition in communication and information sectors.
Emerging-market capitals agree that global standards are important, but disagree as to why the West will establish them. China, for instance, believes that the West wants to “contain” their rise. In a sense, China could, however, push other countries to adopt its new standards, forcing Westerner competitors to make adjustments.
In a G-Zero world, the battle for control of the Internet could literally dismantle the World Wide Web, the effects of which would be unprecedented. It would block the cross-border flow of data, which would halt the flow of commerce and thus essential revenues for the global economy. This would clearly be catastrophic and illustrates the pervasive need for new, secure Internet protocols.
The Implications for the Most Basic Necessities
The inability of powers to agree on how to address global warming is the most obvious G-Zero problem.
Many emerging powers want to extend the Kyoto Protocol since it requires developed states to make the largest sacrifices in limiting pollution. The West wants a new treaty, since emerging powers will be most responsible for emissions in future decades. The U.S. and China account for forty percent of global greenhouse as emissions, and therefore hold the key to breaking the deadlock in negotiations.
This is a dilemma.
Threats to food security have never been more likely to destabilize entire societies, and the lack of global leadership makes it improbable that leading importers and exporters of food will share the burdens. This is the result of global population growth, changing diets, urbanization across the emerging-market world, resource depletion, an inability to address climate change, and the push for biofuels.
Food is the world’s most politically sensitive commodity, and governments refuse to collaborate on solutions that might require sacrifice.
An every-nation-for-itself approach to water not only impacts food security, but also creates risks of its own. Urbanization, pollution, and climate change are adding to the stresses.
In a G-Zero world, it will be ever more difficult to persuade governments to cooperate on plans that impose unpopular policies for the global public good. As each country looks to defend its supplies, the risk of conflict grows.
Winners and Losers
A leaderless world induces a Darwinian economic environment. Some will surface as winners. Some will come out as losers. Others will transpire as both.
The first key to surviving and thriving in this transition period is to recognize that changes to the global system will enable an unprecedented number of governments to play by their own rules. Those who operate as if borders are opening, barriers are falling, the world market is one, and the U.S. president is “leader of the free world” will react to events they do not understand.
‘Pivot’ states build profitable relationships with multiple countries without becoming overly reliant on any one of them. The ability to pivot is crucial.
In a world with few enforceable international rules, some regional heavyweights will bring about their own opportunities.
One of the few established pivot states is Canada, who formed commercial ties with Asia prior to the recession; after the global market meltdown, their percentage of exports soared.
In Latin America is Brazil, a state that profited through globalization, openness to foreign investment and a well-diversified economy.
This country is a winner due to its strong political ties and promising commercial relations with the U.S., China and other emerging markets. Most other pivot states reside in the Eastern Hemisphere.
At the crossroads of Europe, Asia, and the Middle East lies Turkey, a vital global market with an expanding international influence.
Its confidence to run ambitious foreign policy initiatives over objections of the most powerful governments make it the ideal pivot state.
Asia holds many more pivot states.
A classic example is Indonesia, whose trade ties are well balanced among China, the U.S., Japan, and Singapore. Vietnam, too, can pivot since it receives most of its development aid from Japan, its arms from Russia, its machinery from China, and its export market from the U.S.
Singapore demonstrates that country’s small size does not always limit its geopolitical options. This pivot state, now the world’s fourth leading financial center, offers foreign companies a base that allows them access to all of Asia’s power economies, so they do not have to over rely on any of them.
The last prominent Asian pivot state is China, who has sharply increased investments in Asia and aims to gain long-term access to various African resources. China and other emerging markets are quicker to recognize the value of closer ties with Africa and the possibilities the GZero can create.
When the BRIC countries invited South Africa to join, they formed a bridge that enriches all partners and opens vital opportunities; BRICS fully exemplifies the power of the pivot.
There are too many regional heavyweights in Asia for any one country, even China, to fully dominate Asia.
The real winner is Africa, a pivot continent, which can now expect companies from established- and emerging-markets to compete for access. There is no reason why Western-based companies cannot exploit these vulnerabilities, compete more effectively and find new opportunities.
‘Rogues with powerful friends’ are states that openly flout international rules with cover from other governments that will profit from the lack of a strong referee to enforce them.
When established powers want to pressure smaller states to change their behavior, they usually aim to isolate those governments through sanctions; in a G-Zero world, however, sanctions will become increasingly ineffective.
Consider Iran: sanctions have been placed on its energy trade to halt the development of nuclear weapons. Despite their intention, these sanctions have proved to be ineffective because of countless governments’ interest in Iranian oil and gas.
As more governments gain ample self-confidence to combat regulations imposed on them by foreigners, and as it gets clearer that no one has the leverage to enforce these rules, the practicality of sanctions will diminish. In a leaderless world, future would-be nuclear states may conclude they can safely disregard demands from established powers as well.
‘Adapters’ are corporations that understand the changing competitive landscape and are agile enough to exploit the advantages it provides.
Among multinational institutions, adapters will achieve most prosperity.
Some will adjust to a world with scant enforceable rules by capitalizing on arbitrage opportunities to minimize tax and regulatory constraints; look how multinationals are drawn to Ireland’s low tax rates and developing countries’ cheap labor. Companies flexible enough to pursue the optimal deal will benefit most; the G-Zero guarantees the arrival of many more such opportunities.
Another type of adapter is the corporation able to turn a government-backed competitor into a commercial ally by providing something they cannot get anywhere else, such as advanced technology or services that increase efficiency.
The last form of adaptability is diversification, allowing firms to acclimate to changing circumstances of fast-evolving markets associated with a G-Zero environment; a prime example is India’s Tata Group, who continuously hunts for new opportunities. Adaptability is not a one-size-fits-all. In the G-Zero, specialization can be perilous.
‘Protectors’ are firms involved in defense against conventional military strikes, cyberattacks, terrorism, or commercial piracy.
Shifts in the global power rankings stoke not only conflict among aspiring regional powers, but also angst among states in fear of competition. Companies that present wealthy governments with recent offensive and defensive capabilities will realize plenty of new possibilities.
‘Cheaters’ are enterprises who manipulate or ignore the unenforceable rules of the G-Zero.
Like the protectors, cheaters also find ways to take advantage of every nation for itself. In a leaderless world, international treaties are doubtful to succeed.
Unlike the West, many emerging states have no reason to worry about bad press if they are caught cheating, because their governments and industries have significant control over local media and the needs of development urge governments to impose their own rules.
The G-Zero phase is one of creative destruction; obsolete institutions will be replaced by ones that reflect the modern world. Losers ignore the new reality and need for change. Some will squander time and resources in their struggle against this process, rather than predicting and sculpting the post-G-Zero stage.
‘Referees’ are institutions built to serve those who once dominated the international system but that cannot be reformed quickly enough to remain effective.
In a G-Zero world, this group is the most evident loser.
Take the North Atlantic Treaty Organization, IMF, or the World Bank. NATO for example lives on even though its purpose was fulfilled a generation ago. This archaic alliance also highlights an underlying reality of G-Zero life: America can no longer contribute more so that others, like Europe, can do less.
The last noteworthy referees are the nongovernmental organizations (NGOs), which oversee emerging states’ adherence to Western standards; as established powers grow weak, so will the support of NGOs.
‘Exposed states’ are those most deeply dependent on U.S. strength and Washington’s willingness to use it to protect its allies, whose costs and risks will be intensified by the G-Zero.
Japan and Taiwan share the same concerns regarding China; neither knows how willing and able the U.S. will be to guard their interests against China’s growing dominance within the region.
Another exposed state is Israel. Escalated conflict between the Gulf and Iran, together with a dwindling American presence in the Middle East, will isolate Israel more than ever.
‘Shadow states’ are those that would love to have the freedom of pivot states but remain frozen in the shadow of a single power.
Mexico, a significant and independent emerging-market state, is strongly connected to the health of the titan next door; thus, the rate of its development and economy are essentially determined by conditions within the United States.
A similar relationship exists between Ukraine and its main supplier of energy, Russia. Ukraine aspires to break from Russia’s gravitational pull and become a pivot state, preserving relations with Russia while building new ties within Europe. Ukraine, however, has neither the muscle nor the independence to enhance its bargaining position with either side.
‘Rogues without friends’ are states who have realized how strenuous it is to sustain oneself in a world where no one likes you.
Consider Libya’s former ruler, Colonel Gadhafi, whose nonexistent allies left him unshielded when matters became unfavorable. When it is every nation for itself, all will need at least one formidable friend.
‘Dinosaurs’ are companies that cannot or will not adapt to a new environment.
As a result, they will not adequately compete with a much wider range of potential commercial rivals.
This group contains firms that profited from Western-established rules of engagement and are unwilling to devise operations that can adjust to G-Zero transformations. This also encompasses governments that will progressively depend on state-backed enterprises to broaden their power.
The multinationals that are unprepared to take on state-backed competitors will be unresponsive when established and emerging powers’ governments use tools, like market access and capital controls, to sculpt the commercial terrain within their borders and across their regions.
Some government-controlled enterprises will overlook market signals, as they are encumbered by political bureaucracy or operational boundaries associated with state backing; as the aggressiveness of these firms shrinks, so will their government support.
Winners and Losers
Then there are those who will be both winners and losers in the leaderless world. These nations are winners in the near-term, but are losers in the long-term.
For instance, Vietnam is a pivot state that is gradually falling under China’s shadow.
This is also the category under which the United States falls.
In a G-Zero world, America will struggle to accept its diminished international role, as it has less opportunities to get what it wants from other countries. At the same time, resilience will hinge on adaptability and the ability to profit — this is a key American attribute.
“Throughout its history, the US has valued innovation more than security, technological change more than traditional ways of doing things, and hope for the future more than veneration of the past. This is likely to serve the country well.”
What About China?
As the center of the fastest-growing region, China will have opportunities to establish lucrative trade ties in all directions. Even so, China has many internal challenges over the long-term, namely its extreme dependency on exports to America, Europe and Japan.
The Chinese must overcome their aversion and resistance to change in order to adjust their growth model towards reliance on the domestic market. China must defeat the challenges presented by regional frictions, changing demographics and domestic reform.
In a G-Zero world, China is the major power least likely to develop along a predictable path.
What Comes Next?
It will likely take another catastrophe or feasible threat to reestablish a new international order. Self-interest will eventually push capable nations to accept the sacrifices and risks needed to fill the power vacuum.
As the G-Zero creates disruption, nations will either have to adapt to existing systems, alliances and global institutions, or assemble new ones. This is not the new world order, but rather a phase of transition with an unknown timeframe, acting as an incubator of havoc.
Two questions must be answered in order to envision the new international order:
- Will the U.S. and China act as partners or enemies?
- Will others have the strength to play a crucial, independent role in the international order?
The figure to the right depicts the four likeliest post-G-Zero scenarios, based on U.S.-Chinese relations and the comparable strength of other nations. These alternatives symbolize extremes; it is likely the future will yield some fusion of at least two of these developments.
A G2 scenario, or U.S.-Chinese Partnership, will occur if the U.S. and China are by far the strongest, and if G-Zero events thrust them closer together; this is an international system in which both nations find benefits in burden sharing.
Here, America embraces China’s peaceful rise and both states collaborate to solve the global predicaments.
Four factors increase the likelihood of a G2 formation.
First, China to behave as a developed state. Next, the U.S. economy has to recuperate enough to convince Americans they can reinvest in a more extensive foreign policy. The third is for a G-Zero catastrophe that unites U.S. and Chinese interests. Last is a world in which no other power or alliance of powers has the economic and political strength to challenge America or China.
A G2 means that U.S. and Chinese leadership would be indispensable.
Nonetheless, the rise of a G2 is doubtful, due to China’s unwillingness, lack of historical model and unlikelihood of either’s self-confidence.
Most of all, issues that bring America and China together are no more likely than those that might push them apart. For these reasons, it is improbable that China and the U.S. will be the only two nations to emerge from the G-Zero with their aspirations unscathed.
A concert of nations is an international system aimed to restore order and maintain the peace.
It entails international issues be straightened out solely with the engagement of other dominant nations. This situation will arise if an overall collaborative United States and China split leadership with other strong nations, much like a G-20.
This scenario is similar to that of today’s, accompanied by one vital difference: a feeling of crisis that guarantees established and emerging powers join forces, compromise and allocate the risks and obligations of leadership.
To yield a concert scenario, the G-Zero must first generate either a series of disasters or one enormous fiasco that forces governments to unite; even so, a crisis vast enough to compel enduring cooperation from established and emerging powers is virtually unimaginable.
Hence, a concert scenario is even less anticipated than a G2.
‘A Cold War 2.0 system’ is likely to develop if the G-Zero shoves the United States and China toward animosity and if they emerge much more powerful than any imaginable alliance of other states.
This enmity will force other nations to choose sides or to struggle to remain neutral. This is specifically challenging for pivot states.
Today’s U.S.-Chinese relations rest on a level of interdependence that makes it hard for them to harm each other without defacing themselves — a “mutually assured economic destruction”. In all likelihood, the new weapons of war will be economic; assaults will involve cyber-attacks and counterstrikes to distort information flows or to target the enemy’s infrastructure.
China is unlikely to cope well, due to the likelihood of Beijing deeming this too costly, as well as its shortfall in capturing the hearts and minds of those living within cash-hungry environments. The U.S. is not much better off because it would lack global institutional dominance, demand for exports or investments and the world’s thirst for democracy.
The Cold War 2.0 scenario is more likely to emerge than either the G2 or concert scenarios; however, many facets restrict the risk of a direct and destabilizing U.S.-Chinese conflict.
‘A world of regions’ is a scenario where regional leaders supply some public goods within their particular area of influence, while increasingly self-assured regional heavyweights pay almost no attention to major multinational institutions; it is a fragmented international order, without global leadership.
In a world without global direction, many will rise, but only to handle local and regional matters. Simultaneously, this situation demands international cooperation, with factions comprised of established and emerging powers, collaborating on points of mutual interest.
It also inclines pivot states to achieve greater triumph, because no worldwide issue will impel them to choose sides, and the absence of multilateral contracts will allow flexible states to establish oneon-one relations with numerous other governments.
Currently, this is the most probable post-GZero alternative, because it does not necessitate compromises among dominant nations and it seems as though the world is already on this path.
A fifth post-G-Zero alternative must be contemplated — the G-Subzero. This is a wildcard, one that endangers a unique type of disconnected international order.
This scenario will occur if the G-Zero fabricates mishaps that disgrace the state, ruin its credibility and stimulates enough public outrage that incentivizes citizens to seek alternatives.
As leadership dwindles and power shatters within nations, control will split up between local and central leaders, and rivalry will ensue. Though cash-rich governments, like China and Russia, can retain authority over tools needed to conserve basic order, other nations might encounter more existential dangers.
Substantial areas of major states could go ungoverned or become ungovernable, which could morph into breeding grounds for all kinds of trouble. The outcome would confirm that the world’s strongest nations could be entirely engaged in managing domestic crises, whatever the balance of power among them.
A G-Subzero is the most unlikely of all the scenarios; however, the longer the G-Zero lasts, the more foreseeable a G-Subzero becomes.
The international balance of power has transformed immensely, and America cannot lead as history once allowed. Free-market capitalism remains the world’s only reliable engine of lasting prosperity, and American roots ensure its leadership can preserve worldwide peace and fortune.
No one can trump its cultural appeal or offer a competing political or socioeconomic ideology.
Entrepreneurialism will persist as a foundational value and a core strength for America. The United States’ hard power ensures it remains a sought-after security partner, and its soft power will remain priceless. The U.S. will continue to inspire the developing world and maintain the illusion of solidity;
America must feed international demand for U.S. leadership to play a leading role in shaping the post-G-Zero order.
The global economic volatility and intensity of regional conflicts are certain to dampen the enthusiasm of American voters and allies for foreign interventions. The most urgent matter concerns the prolongation of domestic support for protection of the nation’s critical foreign policy interests. Emphasis will be placed on the federal debt and wars, with a heightened public demand for a diminished U.S. role.
Trade will be crucial, hence, an intelligently negotiated free trade agreement would be the most cost-effective foreign policy tool. This would be of utmost significance in Asia, a region essential to the revitalization of the U.S. economy.
If the G-Zero becomes an era of new walls and restrictions, Americans will be forced to compete in someone else’s game; yet, if the future is determined by the power to invent, innovate, streamline, brand and sell, America will be tough to beat.
The U.S. must accept its leadership restraints in this transition period and discontinue unsustainable duties in order to restore the nation’s strength from within. They must stay involved with the world and seek ways to preserve international demand.
Augmenting new alliances, based on shared values and interests, is a pivotal move towards making America invaluable for the subsequent world.
The end of U.S. dominance does not turn America into an ordinary country. Which emerging states can prove their long-term staying power is unknown.
The existing international institutions cannot take up the slack because they have hardly adapted to the sweeping changes of the past several decades. The diffusion of international power since the end of the Cold War, which was accelerated by the 2008 financial crisis and volatile global economic conditions, created a vacuum that no one is yet fully prepared to fill.
This brings us to a growing number of immediate challenges that no country can take on alone. The reliance on a leader of last resort will not be nearly enough.
The G-Zero is more than a state of mind. It is about to create crises and opportunities on an enormous scale and from surprising directions.
Britt always taught us Titans that Wisdom is Cheap, and principal can find treasure troves of the good stuff in books. We hope only will also express their thanks to the Titans if the book review brought wisdom into their lives.