Geopolitical blocs, competing ideologies, technological race. Are we back in the 1960s? asks Hal Brands, Bloomberg Opinion columnist and distinguished professor at Johns Hopkins University's School of Advanced International Studies.
From Ukraine to Gaza to the South China Sea, the world is littered with crises. International cooperation is paralyzed by diplomatic rivalry; techno-optimism has given way to pervasive techno-anxiety. The sole superpower limps into an election with fateful consequences, while its rivals feverishly arm themselves for present and perhaps future wars. Each of these challenges is, in turn, symptomatic of a deeper historical change taking place. "The current international environment is in turmoil as its fundamental elements are changing simultaneously."
Henry Kissinger wrote that in 1968 a whirlwind of change - decolonization, internal protests, a shifting balance of power - was shaking up the arrangements that had emerged since World War II. But Kissinger's assessment is also a good starting point for understanding today's confused world. For a generation after the Cold War, the world was structured by a set of truths: the triumph of democracy over autocracy, the virtues of globalization and innovation, the prospects for peace between the great powers, and the stabilizing role of American power. These truths underpinned a world that was extremely favorable to the US and its allies. They have also been historically favorable to global finance and trade.
The reason today's world seems so chaotic is that these old truths are crumbling as the contours of a new era take shape. The emerging order is one in which geopolitical blocs are making a comeback and strategic rivals are fighting fierce ideological and technological battles. The international economy is a battlefield because interdependence and uncertainty go hand in hand. Global governance and problem solving increasingly look like artifacts of a happier age. International violence is intensifying as the risk of major war - even global war - rises. US power still remains great, but America's behavior is becoming more erratic as its politics become less stable. All this turmoil can still create a decent future. But first, politicians and businessmen must understand the age of fragmentation that has arrived.
The Golden Age of Globalization
The post-Cold War world had its uncertainties, its injustices, its outrages. But the world that emerged after the fall of the Berlin Wall still felt like a time of unique progress and promise. Democracy was defeating autocracy. The number of democracies increased from about 40 in the early 1970s to 120 by 2000.
Globalization was on the rampage: world trade roughly quadrupled between 1989 and 2019, while foreign direct investment flows increased eightfold between 1992 and 2000. Economic openness raised living standards around the world. It was also believed to reduce international tensions, creating a global prosperity that only the most evil scoundrels would disrupt. Globalization was facilitated in turn by the digital revolution, which facilitated trade and increased productivity. Information technology also appears to have favored freedom: social media fueled protests that toppled repressive governments in Egypt and Ukraine in the early 2010s.
Progress had its dark side, of course. The catastrophic terrorism that the US suffered on 9/11 showed how weak players can take advantage of the ease of international travel, communications and finance to launch attacks on a global scale. In general, however, a world that was supposed to be pacified through economic integration seemed increasingly conducive to great power peace. And as the threat of major war receded, leading powers would focus their energies on initiatives and institutions—from countering violent extremism to building the World Trade Organization—designed to tame transnational threats and strengthen the global rules of the road. All this progress was supported by the US. American alliances brought peace and stability to Eastern Europe and the Western Pacific. Washington supported democracy and globalization; it served as a catalyst for collective action against nuclear proliferation and other issues. American technology firms have fostered innovations that have powered the digital age.
The post-Cold War order, as a Pentagon strategy paper says, was "ultimately supported by the United States". The US was also a wonderland for businesses and investors riding the wave of globalization. Multinational companies could reap new efficiencies in an open, integrated world economy. They could trade and invest in an atmosphere of security provided by Uncle Sam.
Globalization helped keep inflation low, in part because developed countries gained access to cheap labor. Last but not least, the dilemmas of doing business with repressive regimes or even with potential rivals seemed insignificant given the expectation that trade itself would make problematic actors become responsible stakeholders. In this sense, the post-Cold War era was a golden era. But now its key elements have collapsed.
A war of ideas
In retrospect, post-Cold War progress was more fragile than it appeared: many new democracies were poorly consolidated, making them vulnerable to autocratic reversals. Other features of the era were double-edged swords. Globalization has brought prosperity, but also inequality and cultural uncertainty—consequences that have fueled a neo-populist moment that is far from over. Information technology has given dissidents new tools to criticize repressive rulers, but it has also given those rulers better ways to track and suppress their critics.
Essentially, the post-Cold War order, which rested on the dominance of the US and the West, ran into trouble as that dominance began to wane. Russia has revived and China has exploded into the booming global economy. Washington and many allies neglected their military budgets because they were too comfortable in the protective cocoon of American hegemony.
US and China GDP
Over time, countries that disliked the system based on liberal values and US leadership became more aggressive in their challenges: Russia invaded its neighbors Georgia and Ukraine, China claimed and gradually conquered much of the South China Sea ; Iran has caused chaos in the Middle East. This attack occurred just as America's commitment to this system appeared to be in jeopardy. Failed efforts to transform Iraq and Afghanistan at the height of America's post-Cold War influence led to demoralization and layoffs. The global financial crisis of 2008-09 scrambled America's politics and sapped its strategic energy.
Donald Trump's presidency, when Washington declared competition against China but appeared at war with many of its allies, epitomizes how uncertain America's trajectory has become. Until 2022, when Vladimir Putin tried to destroy an independent Ukraine after concluding a remarkable "no limits" with Xi Jinping's China, the post-Cold War era is undoubtedly over. Several characteristics define the era that began.
China is growing in technology
First, blocks are back. The geopolitical dividing lines of not so long ago began to blur. Now rival coalitions are fighting all over the world. In Ukraine, a group of Eurasian autocracies - North Korea, Iran and China - are supporting Russia's efforts to break non-aggression norms. They are up against a group of advanced democracies — from North America, Europe and the Indo-Pacific — that support Kiev in preserving a larger system that serves them well. These alliances are not comprehensive—many countries in the Global South seek to play both sides—but they are undoubtedly tightening as international tensions rise. Russia, estranged from the West, is tripling its ties with other revisionists: proof of this is Putin's recently negotiated alliance with Pyongyang. The US, for its part, is strengthening, expanding and consolidating its alliances to contain the Eurasian autocracies. As a result, the confrontation transcends regional borders.
Starting in 2022, the US has forced its allies in Europe and Asia to halt shipments of advanced semiconductor manufacturing equipment to China, an illustration of how geopolitical differences are changing economic and technological ties. Second, the battle of ideas is heating up again. Russia and China did not receive the memo on the irresistible triumph of democracy. They change international norms and organizations to make autocracies more secure. They believe that their illiberal systems can produce greater discipline, effort, and strength than decadent democracies. To prove this, they coerce and destabilize countries that stand in their way. Russia uses disinformation, cyberattacks and sabotage against democracies on both sides of the Atlantic.
Beijing has used an array of weapons -- friendly media, bribes, cyberattacks, economic sanctions -- to stifle criticism and sow discord in Taiwan and other liberal societies. Technological innovation is fueling political wars: Moscow and Beijing can now use AI-enabled disinformation against their democratic enemies. Third, a battle for technological supremacy is raging. A generation ago, America's technological leadership was simply dominant. Things are no longer so unambiguous.
China has made huge advances in cyber weapons and hypersonic missiles. It is investing heavily in artificial intelligence, quantum computing and other technologies from the so-called Fourth Industrial Revolution. Throughout history, geopolitical contests have been technological. If China dominates key emerging technologies, it can dominate this era as well. That means industrial policy will remain as geopolitical rivals invest and put up protective barriers around strategic sectors from semiconductors to clean energy. It also means that economic warfare will become commonplace as both countries use subsidies, export controls, investment restrictions, tariffs and other tools to accelerate their innovation and contain their rivals.
Fourth, fierce competition kills the opportunity to solve global problems. Transnational challenges are mounting, but geopolitical tensions are hampering US-China cooperation on issues from Covid to climate change. Great powers can't even cooperate to keep vital trade routes open. The US and China once worked together to defeat Somali pirates. But Beijing is now cutting deals with the Houthi rebels, who are shelling the Red Sea and Gulf of Aden while Iran arms them and Russia attacks them. In the coming years, expect seemingly fundamental norms such as freedom of navigation on the seas to become more contested. And expect cooperation to address transnational issues, whether it's climate change or the management of advanced technologies, to occur primarily within groups of like-minded countries (the G-7 group).
Fifth, against the background of cold wars, technological wars and trade wars, the shadow of real war has become inevitable. Ukraine has been devastated by Europe's biggest conflict since 1945. The Middle East has been rocked by multiple interrelated conflicts. The total number of wars between states is higher than at any time in decades. Don't expect this trend to reverse anytime soon. However the war in Ukraine ends, Russia will emerge from it with an experienced army, a mobilized economy and an epic grudge against the West. Iran is moving ever closer to a nuclear capability that will ensure its support for violent instability in the Middle East. China is stockpiling food and energy — ships, planes and munitions for mass production — and is stepping up its push for supremacy in the Pacific. Hotspots from the Senkaku Islands to the Second Thomas Shoal could serve as an occasion for a Sino-US clash.
Territorial claims in the South China Sea overlap
The stability of the international system has long been closely related to the stability of the key regions of Eurasia: Europe, the Middle East and East Asia. War or the threat of war pervades all three areas simultaneously. This makes the last characteristic of our era all the more sobering: America is still powerful, but less reliable.
U.S. advantages, economic and military, remain significant, and American commitments remain indispensable to building a decent world. Unfortunately, at a time when many Western countries are facing political paralysis, instability, or some combination of the two, America's domestic dramas can be extremely disruptive. Yes, the short-term danger is that a second Trump term could weaken US alliances and spur front-line states like Poland or South Korea to develop their own nuclear weapons. Or the alternative - a second Biden term in which America is led by a visibly declining commander in chief. But the problems are deeper.
Behind Trump is a larger "America First" movement that will immediately leave the world to its own devices. Behind Biden lies a potentially powerful form of progressive neo-isolationism. The political foundations of American internationalism are therefore shaky. Growing polarization and internal tensions could cause the US to become distracted, even consumed by its own internal demons — just as growing global instability increases the cost of that distraction.
World War III?
Epoches of upheaval can lead to happy endings. The Cold War gave birth to the liberal international order, which ultimately provided more freedom, peace, and prosperity than humanity had ever experienced. Today, realism need not be synonymous with despondency, because the US and its democratic allies still have long-term advantages over their enemies, including their free state institutions. But for political leaders and business leaders, navigating this age of fragmentation will require keeping some basic principles in mind. First, there is no going back to "normal". Today's crises in Ukraine, the Middle East and other hot spots are not unusual. They are symptoms of deep, ongoing changes that are altering the fundamental rhythms of world events.
Particular crises may come and go; a certain voltage can rise or fall. But leaders in power and business must prepare for an era of constant vibrancy, competition and conflict. Risk levels, both strategic and economic, will be elevated for years to come.
Second, you can't have it all. After the Cold War, the US and its allies could enjoy a world that was phenomenally suited to their interests and values at very low cost. Multinational companies could take advantage of the efficiencies offered by globalization without worrying too much about the vicissitudes of global politics. Neither approach is sustainable today. As leaders attending this month's NATO summit can attest, the cost of national security and the preservation of democratic values rises as autocratic powers make their moves. Meanwhile, Western companies that had to choose whether to stay in Russia after it invaded Ukraine - or wonder how to protect their assets, operations and reputation if China invaded Taiwan - are finding that the dilemmas of operating in a hothouse environment can be serious.
Third, take worst-case scenarios seriously. Responsible US officials must consider not only the possibility of a US-Russia clash or a US-China conflict - however catastrophic that may be - but also a global war in which conflicts break out in several places at once. International corporations also have to contend with scenarios that not so long ago would have seemed outlandish. What if the security of vital sea lanes suffers because the Houthis set a precedent that others follow? How could their operations be affected by a Sino-American war that would lead to a more brutal, rapid and far-reaching division than anyone can imagine today? But fighting them is how one builds the resilience, military or intellectual, needed to thrive in a turbulent world.
Fourth, as geopolitics and geoeconomics become inseparable, the West must invest in new knowledge. In government, national security is no longer so heavily dominated by diplomats and defense specialists. Understanding the investment patterns, financial and technological constraints and decision-making of the private sector has become critical to winning today's competition. The private sector, for its part, is entering a moment where geopolitical illiteracy simply doesn't matter, given that few firms are completely insulated from the disruptions or opportunities that national rivalries can cause. Find the positive side of misfortune.
Yes, the world is getting more disgusting. But the era of disruption creates chances for the US to forge deeper ties with like-minded nations in Europe and the Indo-Pacific to catalyze a historic surge of innovation in critical technologies and demonstrate that liberal societies can still outperform illiberal ones. It also creates chances for companies to create more sustainable supply chains, take advantage of the new industrial policy and forge stronger partnerships with the US government, which desperately needs the creativity and innovation of the private sector to to deal with the new economic, intelligence and military challenges.
We are at the beginning of an era of brutal conflict. The task is to make the most of it.