The End of the World is Just the Beginning: Mapping the Collapse of Globalization

by Peter Zeihan

Geopolitics is the study of place, exploring how everything about us is an outcome of where we are. Demography is the study of population structures.

geopolitical strategist).

Long-haul transport is what brings everything from areas of high supply to high demand, regardless of participant. For any product that is concentrated in terms of supply or demand, expect market collapse. Products particularly concentrated in terms of supply include oil, soy, lithium, and mid- and low-end microprocessors. Products particularly concentrated in terms of demand include liquefied natural gas, bauxite, high-speed train cars, and squid. Products facing a double squeeze include iron ore, helium, cocoa beans, and printer toner.

The Western Hemisphere is fine for foodstuffs and energy but will need to build out its manufacturing capacity for products as wildly varied as laptops and shoes.

The Americas are broadly okay. In part it is geographic. The two American continents have more food and energy than they have people to consume them. So, you know, solid start. It is also economic. The Western Hemisphere’s (the world’s) most demographically stable developing country—Mexico—is already heavily integrated with the hemisphere’s (the world’s) largest economy and most demographically stable developed power—the United States. The two buttress one another in ways unparalleled in the modern world.

By far the biggest loser in this new dis-structure is China.

Everything about modern China—from its industrial structure to its food sourcing to its income streams—is a direct outcome of the American-led Order. Remove the Americans and China loses energy access, income from manufactures sales, the ability to import the raw materials to make those manufactures in the first place, and the ability to either import or grow its own food. China absolutely faces deindustrialization and deurbanization on a scale that is nothing less than mythic. It almost certainly faces political disintegration and

even de-civilization. And it does so against a backdrop of an already disinte...

Capital flight out of China to the U.S. dollar network regularly tops $1 trillion annually.

The later a country began the urbanization process, the faster that urbanization process unfolded and the faster that birth rates crashed.

Most people think of the Bretton Woods system as a sort of Pax Americana. The American Century, if you will. But that’s simply not the case. 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.

Which is over. With the American withdrawal, the various structural, strategic, and economic factors that have artificially propped up the entire Asian and European systems are ending. What consumption remains is concentrated in North America. Only North America sports a demographic profile that doesn’t have to immediately adapt to a fundamentally new—and fundamentally unknown—financial reality. And so massive manufacturing reshoring to the American system is already in progress. The real, actual American Century is only now beginning.

Southeast Asia has labor variation in spades: Singapore is ultra-high-tech and heavy in banking, Vietnam and Indonesia are young, vibrant societies handling the low end, and Thailand and Malaysia occupy the middle ground . . . but this is the Asian middle

ground. The Thai and Malaysian economies are arguably more technically sophisticated than a sizable minority of European countries and American states. The Southeast Asian countries of Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are very rapidly urbanizing. The region’s hypercrowded cities push down the cost of labor relative to global norms, giving the Southeast Asians a leg up in any sort of apples-to-apples competition.

For agriculture, industrial technologies changed the where and how much of the possible, the Order changed the access and reach of the possible, while mass displacement changed the what and variety of the possible.

That leaves Morocco as the world’s great hope, and for once there is actual hope. In addition to its already-productive phosphate assets, Morocco occupies a territory called the Western Sahara, which has the world’s largest undeveloped phosphate supplies, most of which are located within a few miles of the coast.* Even should Russian and Chinese supplies fall off the market completely, the United States plus an enlarged Morocco should be able to supply sufficient volumes for all of North America, South America, Europe, and Africa. That’s great for them. And . . . wretched for everyone else.

The first category of food-exporting countries are those whose supply systems for everything from finance to fertilizers to fuels are sufficiently in-house that they can continue producing their current product set with only minor adjustments. France, the United States, and Canada are the only countries on the planet that check all the boxes. Russia is a near miss. Russian farm vehicles are, well, Russian. Saddled with an aging and collapsing population, Russia simply doesn’t have the labor to maintain ag output with anything less than the sort of mammoth field equipment that Russia is incapable of manufacturing for itself.

Next up are those exporting countries that have most of the pieces in place regionally. They will still require access to a sort of friends-and-family network in order to meet all their input needs, but even in a Disorderly world this should be manageable. Ranked from those facing the least to greatest challenges: New Zealand, Sweden, Argentina, Australia, Turkey, Nigeria, India, Uruguay, Paraguay, Thailand, Vietnam, Myanmar, Italy, and Spain. All have shortcomings—most notably in accessing equipment, fertilizers, and energy—but none are likely to face the sort of extreme supply or security challenges that will wreck production in more vulnerable locations. Belarus, Kazakhstan, and Ukraine are in this category as well. In addition to input shortages, there’s an open question whether any excess food output can be exported anywhere useful as Russia reasserts greater control over them. Keep in mind that Russia grows a lot of wheat on its marginal territories. In poor harvest years at the height of the Order, Russia already interfered with exports out of the other three wheat-belt states in order to ensure its own people sufficient food supplies. The third category are those exporters that simply cannot maintain the input flows required to keep things going without a perfect constellation of unlikely geopolitical factors that are largely beyond their capacity to shape. They won’t face catastrophic production declines, but they’ll have to get used to agriculture becoming interm...

threats—and in some years that means crops simply won’t perform to snuff. This is the future for Brazil, Croatia, Denmark, Finland, the Netherlands, Pakistan, and South Africa. Fourth among the exporters are those places that have carved out a place for themselves among the agricultural powers of the Order but have zero chance of playing a significant role in the Disorder. Most of their supply chains lie outside of territories they can reach, and most face security concerns that will make it impossible for them to maintain what has become their business as usual: Bulgaria, Estonia, Czech Republic, Ethiopia, Finland, Germany, Hungary, Latvia, Lithuania, Mali, Romania, Slovakia, Zambia, and Zimbabwe. The real desperation is on the importers’ side of the ledger. The first category are those who are close enough to exporters both geographically and diplomatically that they need not overworry about getting cut off: Chile, Colombia, Ecuador, Iceland, Indonesia, Malaysia, Mexico, Norway, Peru, the Philippines, Portugal, Singapore, and the United Kingdom. Japan also falls into this category not because it is close to food suppliers, but because it has the naval reach to go out and secur...

Countries that couldn’t even consider beginning the industrialization process before World War II are now responsible for more than half of current emissions, with total emissions seven times what they were in 1945.

Capital availability is a function of demographics. The Boomer generation’s mass retirement in the 2020s is to our detriment. They are taking their money with them. But by 2040, the youngest Millennials will be in their forties, and their money will have made the system flush once more.

On the topic of demographics, the 2040s will host two simultaneous beneficial outcomes. The kids of the youngest Millennials will be entering the workforce, heralding a sort of a return to “normal” for the American labor market. Nearly as important, Mexico’s demographic

structure will be shaped a bit like a chimney, similar to that of the United States in 2000. That was a magic moment in America when we had a similar number of children and young workers and mature workers, making the United States capital rich and consumer rich and productivity rich...