It has been almost 7 decades since World War 2. The world post-war has been held together by the lucrative but fragile threads of trade in a rules-based global order spearheaded by the United States after the fall of USSR in 1991. So much has transpired since. The dollar has become the world’s reserve currency with its gold-delinking giving the US a licence to virtually print currency at will and forcing its inflation to be shared globally by countries that calculate their forex reserves in US dollars. In our 2016 book, The New Global Order we have extensively discussed the ascent of the United States, the tools it employs to maintain its status as well as its facilitation of an alternate pole; China, to ensure its relevance.
Countries have seldom become global giants by adopting nice, humane policies as history is the witness but this article is not a moral debate about the US foreign policy rights and wrongs in maintaining its superpower status. Great Britain, the one-time global leader’s practices if analysed in detail could possibly make the US look like a saint and the impending rise of China will make the United States seem like Florence Nightingale!
Every great war and redrawing of boundaries sows the seeds of new chaos.
This article is about the repetition of history from a different perspective. It is about trade from the law of diminishing returns for nations and people. At what point do nationalism and lost power outweigh great economic gain? After all, it is mass movements and populist sentiments during various cycles that contribute to the events in history. In hindsight, we are all Buddha but if we were to look at the current events dispassionately, we would see much synergy between the times pre-World War 1 and today in terms of trade and nationalist sentiments. Every great war and redrawing of boundaries sows the seeds of new chaos. Hence, today in addition to the nationalist sentiments and environment pre-World War 1, we are also confronted with many more Faultlines that are making the world a precarious place to live in. Peace is short-lived and fragile and chaos looms large on the horizon.
The Mahabharata rightly opens saying “What is here is everywhere, what is not here is nowhere”; giving a perfect glimpse of the human psyche and ambitions in our time.
In Hinduism, we believe that every time there is a Yuga Parivartan or an Age of Change, the interim period is ominous as it offers a glimpse of what will come next. The Mahabharata, a major Sanskrit epic of ancient India took place at the transition from the Dwapara Yuga to the Kali Yuga; its end in which brother killed brother for wealth and fame marked the beginning of the Kali Yuga in which we currently live. The Mahabharata rightly opens saying “What is here is everywhere, what is not here is nowhere”; giving a perfect glimpse of the human psyche and ambitions in our time. Though today, post Peace of Westphalia, kingdoms have given way to nation states via political reform, the thirst for power, ambition and natural resources for control remains unchanged.
The birth of nation states took the concept of national security to a different level. In absence of a monarch or king who was constant, democracies gave birth to a system of revolving door political administrations and a constant intelligence apparatus. This made intelligence agencies powerhouses in their own right adding a new party in the quest for control which went on to become the Deep State. In the other political system that prevailed” communism; the intelligence apparatus merged with the centralized administration seamlessly creating a powerful hydra that is now omnipresent.
The downfall of monarchies witnessed the rise of multiple religious bodies, intelligence agencies and nation states in the quest for global control and power; and the Faultlines multiplied…
The stock market is one of the best denominators of simple economics which shows that one man’s profit is always another man’s loss. The same principle is applicable to political reform. Peace of Westphalia gave birth to nation states but in doing so, it significantly reduced the might of the Holy Roman Empire by bringing about a separation of Church and State. The Catholic Church which still remains one of the largest global landholders saw its power further erode with the advent of Protestantism and Church of England later. While Mussolini did his bit in restoring the might of the Catholic Church with the Lateran Treaty, the advent of Islam, the Shia-Sunni divide and the rise of the Ottoman Empire along with the persecution of Jews by the Romanovs in Russia and Poland; and later Hitler brought the third Abrahamic faith, Judaism and its proxies in the lust of power also. Thus, the downfall of monarchies witnessed the rise of multiple religious bodies, intelligence agencies and nation states in the quest for global control and power; and the Faultlines multiplied…
It is very disheartening for any empire that was once great to watch quietly from the sidelines while other countries interfere in its internal affairs for their strategic interests and try to determine its fate. Turkey, the seat of the erstwhile Ottoman Empire; China; Germany; Japan India and Iran (formerly the Persian Empire) are examples of the same. While geopolitics made their temporary surrender mandatory, it could not erase the resentment experienced by these countries along with their burning desire to avenge history.
The wonderful thing about history is that it always repeats. Thus, it gives countries the chance to settle scores if they are so inclined bringing things full circle. Of course, subsequently, the former victor becomes the loser unable to accept his new position from the sidelines resulting in more Faultlines. The United Kingdom today is a far cry from the naval superpower it once was. The UK, France and Russia were the reigning giants before World War 2 when the US assumed the mantle of global leadership with a new institutional model of United Nations and other corresponding bodies to hold the world together in an era of trade and peace.
The US bettered the unequal Sykes-Picot model by imposing the Petrodollar on Oil-rich countries forcing them to invest in the US economy and providing regime stability in return; bringing the threat of democracy and people’s revolutions to disobedient or independent nations.
The US via the United Nations, UNSC, IMF and WTO along with Central Banks has created a global model of carrot and stick diplomacy. With this, the US dollar has become omnipotent, its navy the global security provider and the Federal Reserve and its stock market, the benchmark for global economic performance. Through its Petrodollar strategy, the US has punished and empowered its foes and allies respectively by using UN sanctions as effective tools against erring nations. The US bettered the unequal Sykes-Picot model by imposing the Petrodollar on Oil-rich countries forcing them to invest in the US economy and providing regime stability in return; bringing the threat of democracy and people’s revolutions to disobedient or independent nations.
There is nothing worse than becoming irrelevant in power politics and the tagline of “the ends justify the means” became the norm seeding further chaos.
With the Petrodollar, Oil – the fuel of global economies became the new gold and with it its refiners and technology providers emerged as a new power centre in the quest for power and control. The space for the key players started getting saturated, power struggles emerged, lobbies became empowered and new Faultlines emerged. There is nothing worse than becoming irrelevant in power politics and the tagline of “the ends justify the means” became the norm seeding further chaos.
Simultaneously, the Middle Eastern regimes prospered, handed out welfare doles to their citizens but also exported the fundamental Wahhabi Islam ideology in an act of monkey balancing for leverage. While the money was welcome, the regimes resented being dictated to by the West resulting in an uneasy relationship that was easy to exploit. The fire of Wahhabi Islam was thus relatively easy to light but difficult to control beyond a point as it entered the DNA of the Middle East. Resultantly, a tool of leverage for the regime has now become the fundamental obstacle in modernization of the region as the end of fossil fuels era looms large.
The Petrodollar profits also bolstered the American financial industry and its multinational corporations. Americans enjoyed high standards of living with unprecedented consumerism at relatively stable costs while the majority of the world struggled to make ends meet with inadequate infrastructure, poor electrification, poor healthcare and rampant corruption. The growing consumerism fuelled American companies making them significant influencers in US foreign policy. Wall Street also increased its appetite for profit and started embarking on more risky ventures fuelling revolutions, regime changes, non-state actors, drug mafias etc in emerging markets. Once chaos was seeded, the elephant in the room; the US Military-Industrial Complex would make merry. It was a beautiful cycle of creation, preservation and destruction at the cost of other nations’ sovereignty, culture and human lives in the name of profit and control.
The emerging chaos that will set the tone for the next Great War will encompass the entire world not just politically but in all aspects from which society may perhaps never recover.
With the fall of USSR, the US obtained a free pass to impose its policies globally. There was no country to maintain checks and balances and the global institutional order it had created was already heavily skewed in its favour. This should have been enough, surely. But profits are often like chocolate cake, you can simply never have enough of it. Two interesting things happened during this time. The historic Nixon-Mao meeting brokered by Dr Henry Kissinger resulted in China’s entry into the global arena cementing an interesting partnership. Simultaneously, the US decided to “invade” all countries in the Middle East that had allied with USSR to complete its circle of dominance.
The US-Sino partnership made China a manufacturing powerhouse. US MNC’s always hungry for quarterly profits and rising share prices moved their manufacturing overseas. The US also facilitated the rise of the Sino MIC through multiple measures while China promised to gradually “open” its economy to US corporations for greater profit. There was just one catch. China was not a capitalist country but a communist nation with no intention of formalizing its economy for the US to manipulate. Moreover, China always sought to avenge its humiliation against western imperialism and emerge as a challenger to the US-led rules based global order which it knew was solely in the US interest.
While the US corporations were busy enjoying their enhanced bottom lines, its MIC was busy subverting regimes and bringing democracy to the Middle East setting off waves of resentment and hatred in multiple conflict theatres. The fundamental Wahhabi ideology further fuelled the anti-western drive creating umpteen flashpoints. This in turn, further empowered the US MIC and its intelligence agencies with each cycle making matters worse. Then came 9/11 and everything became magnified.
Rising global migration, refugee crisis and the 2007-08 financial crises served as a catalyst for social and economic unrest and the US that was usually the source of chaos became the victim.
Meanwhile, China had already emerged as the world’s second largest economy in record time thanks to a strict authoritarian regime under the communist party and was ready to up the ante. For the US, the multiple conflict theatres globally, civil society movements and the gradual loss of jobs to China started creating domestic Faultlines between the haves and have nots. Rising global migration, refugee crisis and the 2007-08 financial crises served as a catalyst for social and economic unrest and the US that was usually the source of chaos became the victim.
Globally, China started baring its fangs with OBOR, the largest ever global project in history making the Marshall Plan look tiny in comparison. This came at the huge but “acceptable” price of curbing dissent, human rights violations, minority persecutions, water warfare, climate destruction, ideological subversion and religious persecution for China. China began further using the combined reach of its intelligence, soft power and government to co-opt overseas ethnic Chinese globally emulating the silver or bullet model.
In the absence of the US willing to continue status quo, old tensions of US dominance and interference in their internal affairs starting gaining momentum bringing us to the contraction of the global order we are witnessing today via the Trade Wars.
Hardline Chinese nationalism started getting replicated in other countries with the rise of the extreme right who viewed globalization as a dirty word responsible for all ills. Brexit, the Chinese penetration in Eurasia, a resurgent Turkey and Russia resulted in the election of President Donald Trump in the United States who vowed to “make America great again”. For this, President Trump wanted EU, NATO and other US allies and strategic partnerships to contribute equally setting the United States on a collision course with its allies. The US effectively refused to bear the cost of global leadership and expected its allies to cough up security costs citing unequal tariffs that had further taken away US jobs and manufacturing. While this resonated with the unemployed class in the United States; for the countries that had enjoyed the benefits of the free market economy, these concessions amounted to blackmail. In the absence of the US willing to continue status quo, old tensions of US dominance and interference in their internal affairs starting gaining momentum bringing us to the contraction of the global order we are witnessing today via the Trade Wars.
This is also a great time for India to become a member of the economic G3 club with a seat at the high table and become a powerful player.
Before the global order expands, it first needs to contract to create a vacuum for new players. While China, the unequivocal challenger is offering an alternate Yuan-led order to support and benefit from, the current vacuum has brought all the Faultlines that have fostered over the decades to the surface. Resurgent countries know that this is a golden opportunity to correct the historical wrongs. This is also a great time for India to become a member of the economic G3 club with a seat at the high table and become a powerful player.
Conversely, intelligence agencies, MIC, MNC’s, and the Oil mafia are not thrilled about any changes that could challenge their dominance. Religious organizations are also hoping to become free riders on the rising reverse globalization and nationalism sentiments to go back to an era where there was no separation of Church and State while the globalization forces consisting of the Deep State, media and NGO’s are doing their utmost to ensure their Collectivism Model successes are not reversed with the break-up of EU/NATO etc. Everybody wants to stay in a time bubble when they were relevant!
Instead of becoming more tolerant the citizens and governments are embracing the peaks of xenophobia, religious bigotry, cultural pride, linguistic divide, fascism and jingoism.
The Fourth Industrial Revolution is here. It has brought greater connectivity making the world effectively a global village. Instead of becoming more tolerant the citizens and governments are embracing the peaks of xenophobia, religious bigotry, cultural pride, linguistic divide, fascism and jingoism. Social structures are also getting redefined. On one side, the extreme right is taking over while the Trans-everything movement is seeking to dismantle all conventionalism on the other. The New Global Order is in the making and religious, political, social, economic, and cultural and geographic Faultlines have resurfaced and are on the verge of explosion and it’s going to be bloody…
The emerging chaos that will set the tone for the next Great War will encompass the entire world not just politically but in all aspects from which society may perhaps never recover. Albert Einstein once said, “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones”. This prophecy is one we must all pray never comes true.