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by
Peter Zeihan
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January 19 - January 28, 2024
The coming global Disorder and demographic collapse will do more than condemn a multitude of countries to the past; it will herald the rise of others.
Sometimes it feels as though American policy is pasted together from the random thoughts of the four-year-old product of a biker rally tryst between Bernie Sanders and Marjorie Taylor Greene.
The 2020s are not the first time the United States has gone through a complete restructuring of its political system. This is round seven for those of you with minds of historical bents. Americans survived and thrived before because their geography is insulated from, while their demographic profile is starkly younger than, the bulk of the world. They will survive and thrive now and into the future for similar reasons. America’s strengths allow her debates to be petty, while those debates barely affect her strengths.
The American story is the story of the perfect Geography of Success. That geography determines not only American power, but also America’s role in the world.
Conforming to the technologies of the time, the American colonies were all agricultural in nature. None of them were what we would call breadbaskets in the contemporary sense. The New England colonies of Connecticut, Rhode Island, Massachusetts, and New Hampshire suffered from thin, rocky soils, often-cloudy weather, and short summers, limiting farming options. Wheat was a hard no.
The American-Canadian border today is the least-patrolled and longest undefended border in the world. America’s southern frontier is actually more secure against conventional military attack. The fact that illegal immigration across America’s southern border is an issue in American politics underlines just how hostile that border is to formal state power.
No country that has ever industrialized has ever managed the process without crippling social and political mayhem. Industrialization is necessary and unavoidable, but it is hard.
In 1945 the American population was roughly equal to that of the combined Western European population, which was roughly equal to that of the Soviet population. Even leaving teeming East and South Asia aside, not only did the Americans lack the forces at war’s end to keep the territory it held, but simple math meant that they could not muster sufficient occupation forces to make a global empire work.
The useful lands of the United States’ portion of North America were greater in potential than that of any empire that had come before.
The post–Cold War era is possible only because of a lingering American commitment to a security paradigm that suspends geopolitical competition and subsidizes the global Order. With the Cold War security environment changed, it is a policy that no longer matches needs. What we all think of as normal is actually the most distorted moment in human history. That makes it incredibly fragile. And it is over.
On the farm, having children was often more an economic decision than it was about love. Children were free labor that were de facto chained to their parents’ economic needs. There was an understanding—rooted in millennia of cultural and economic norms—that children would either take over the farm as their parents aged, or at least not move all that far away. The extended family formed a tribe that consistently supported one another. This cultural-economic dynamic has held true since the dawn of recorded history, even to and through the consolidation of the world into empires and
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urbanization tossed those norms out the window. Move from a sprawling farm into a quarter-acre plot in a small town—much less a high-rise condo in a dense metropolis—and the economics of children collapse.
Some of the new techs, like the new assembly lines, required largely unskilled labor. Others, such as petrochemicals, demanded people who really knew what they were doing, because, you know, explosions.
This passage stuck out to me because my father was a petroleum engineer with Royal Dutch Shell in the 1950s, and he developed the safety procedures for Shell’s refineries that effectively stopped accidental explosions. Shell sent him around the world to teach the other plant managers how to implement the new safety protocols, and while he was teaching in London he met the woman who became my mother.
Most of the spending a person does occurs between the ages of fifteen and forty-five—that’s the life window when people are buying cars and homes and raising children and seeking higher education. Such consumption-led activity is what drives an economy forward, and this bucket of countries had consumption to spare.
In the 2020s, birth rates are no longer simply dropping; they have been so low for so long that even the countries with the younger age structures are now running low of young adults—the demographic that produces the children.
No matter how you crunch the numbers, China in 2022 is the fastest-aging society in human history. In China the population growth story is over and has been over since China’s birth rate slipped below replacement levels in the 1990s. A full replacement birth rate is 2.1 children per woman. As of early-2022, China’s only partly released 2011–2020 census indicates China’s rate is at most 1.3, among the lowest of any people throughout human history.
Under the Order and this magical demographic moment, we have become so specialized and our technology has advanced so much that we have become totally incompetent at tasks that used to be essential.
“optimal” is not the same thing as “natural.” Everything about this moment—from the American rewiring of the security architecture to the historically unprecedented demographic structure—is artificial. And it is failing.
Not every location had the right geography to make a go of civilization before the Order. Not every location will be able to maintain civilization after Order’s end.
A precious few countries have managed a high degree of development while simultaneously avoiding a collapse in birth rates. It is . . . a painfully short list: the United States, France, Argentina, Sweden, and New Zealand.
What you and your parents (and in some cases, grandparents) assumed as the normal, good, and right way of living—that is, the past seven decades or so—is a historic anomaly for the human condition both in strategic and demographic terms. The period of 1980–2015 in particular has simply been a unique, isolated, blessed moment in time. A moment that has ended. A moment that will certainly not come again in our lifetimes.
Capitalism without growth generates massive inequality, as those who already have political connections and wealth manipulate the system to control ever-bigger pieces of an ever-shrinking pie. The result tends in the direction of social explosions.
Socialism cannot generate capitalist levels of growth even when the pie is expanding, much less when it is shrinking. Socialism might be able to preserve economic equality, but that’s unlikely to save the model. Unlike capitalism, where at least the elites might be able to struggle through, in socialism everyone will become noticeably worse off every year. Mass uprisings and state fracture are pretty much baked into that particular dessert product.
The only countries in a post-2022 world that might be able to maintain an overseas empire are those that can have three things going for them: a serious cultural superiority complex, a military capable of reliably projecting power onto locations that cannot effectively resist, and lots and lots and lots and LOTS of disposable young people.
First, everything is going to change. Whatever new economic system or systems the world develops will be something we’re unlikely to recognize as being viable today.
Second, the process will be the very definition of traumatic.
Mexican-Americans are turning nativist. The demographic in the United States that consistently polls the most anti-migration is not white Americans, but instead (non-first-generation) Mexican-Americans. They want family reunification, but only for their own families. Never forget that anti-migrant, build-the-wall Donald Trump carried nearly every county on the southern border when running for reelection in 2020.
The ingredients of today’s industrial and consumer goods are only available because they can be moved from—literally—halfway around the world at low costs and high speeds and in perfect security.
Absent the United States, there are only a handful of powers—France, the United Kingdom, Japan, and China—who could even reach the Persian Gulf with military assets. Of them only Japan has the technical capacity to act in force, and none have the vessels required to establish meaningful convoys.
Bottom line: the world we know is eminently fragile. And that’s when it is working to design. Today’s economic landscape isn’t so much dependent upon as it is eminently addicted to American strategic and tactical overwatch. Remove the Americans, and long-haul shipping degrades from being the norm to being the exception. Remove mass consumption due to demographic collapses and the entire economic argument for mass integration collapses.
The end result will be the creation of several mini-Europes as various major powers attempt to throw economic, cultural, and (in some cases) military nets over wider regions. The United Kingdom, France, Germany, Sweden, and Turkey will all go their own way and attempt to attract and/or coerce select neighbors to come along for the ride.
The Order worked because only the United States had a global navy and everyone agreed to not target ships. That world is gone.
Modern cities—and especially East Asia’s modern megacities—are particularly screwed. All only exist because the Order has made it easy for them both to source the building blocks of industrialized systems as well as to access end markets for their exports. Remove the global system, remove global transport, and cities will be responsible for their own food and energy and industrial inputs. That is, in a word, impossible.
The United States is a continental economy with robust internal commercial activity, as opposed to a global economy with robust external trade.
Russians today think that their Trans-Siberian Railway (TSR), theoretically capable of transporting massive volumes of goods between East Asia and Europe, is an excellent way to break America’s hold on the seas. Reality disagrees: a single one of those large container ships transported more cargo than total annual TSR traffic in the entirety of calendar year 2019.
The rules of finance changed drastically not at the beginning of the American-led Order, but in the years after. In the 2020s they will change again into something we have never seen before.
The Chinese Communist Party’s only source of legitimacy is economic growth, and China’s only economic growth comes from egregious volumes of financing. Every time the Chinese government attempts to dial back the credit and make the country’s economy more healthy or sustainable, growth crashes, the natives start talking about making lengthy strolls in large groups, and the government turns the credit spigot back to full. In the CCP’s mind, moving away from debt-as-all is synonymous with the end of modern China, unified China, and the CCP. In that, the Party is probably correct. It’s no surprise
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Cyptocurrencies like Bitcoin are not backed by a government, are not readily exchangeable, are not useful in making payments, have no intrinsic value, and are primarily generated by Chinese magnates seeking an end run around sanctions, yet the combined value of all cryptos is in excess of $2 trillion.
The Chinese will exit the modern world just as they entered it: with a big splash. The only question is when. If I had the answer to that you wouldn’t be reading this book, because instead of struggling through edits I’d be idling away my days on the Peter Virgin Islands.
The biggest risks to capital will be in the places with the fastest-aging populations as well as those with the most rapidly retiring workforces: Russia, China, Korea, Japan, and Germany, in that order.
There will be American exceptions. The world’s best geography will keep development costs low. The rich world’s best demography will make America’s capital cost increases less onerous. The rise of the American Millennials suggests that by the 2040s—when the Millennials finally age into that capital-rich age bracket—capital supply will once again rise, taking the heat out of capital costs.
The most vulnerable locations are those most dependent upon massive natural gas flows from or through the territories and waters of countries that are less than reliable: Korea, Taiwan, Turkey, China, Ukraine, Germany, Austria, Spain, Japan, France, Poland, and India, roughly in that order.
The Americans even have an ace in the hole in terms of their oil demand: One of the by-products from most shale oil wells is a steady flow of natural gas. The Americans, and pretty much only the Americans, can use that natural gas in lieu of oil in their petrochemical systems.
Roughly 1 percent of buildings in the advanced world are torn down every year, and every scrap of the steel used to reinforce them is melted down, reforged, and given a second life. Or third. Or eighteenth.
the best economics for recycled steel involve not simply physical security and proximity to the raw inputs, but also cheap-cheap-cheap electricity. The winner on all three counts will be the United States, with America’s Gulf Coast looking the most promising, for the triple reasons of having great electricity prices, plenty of greenfield industrial space—particularly at potential port locations—and proximity to both large local and regional markets (think Texas, the East Coast, and Mexico).
Dope copper a touch with either arsenic or tin and you get bronze, a firmer metal that’s better for tools. Turn it into tubing or containers and copper’s natural antiseptic and antimicrobial characteristics allow for longer-term food and drink storage, reduced disease, and extended life spans.
As of 2022, cobalt is the only sufficiently energy-dense material that even hints that we might be able to use rechargeable batteries to tech our way out of our climate challenges. It simply cannot be done—even attempted—without cobalt, and a lot more cobalt than we currently have access to, at that.
annual cobalt metal demand between 2022 and 2025 alone needs to double to 220,000 tons simply to keep pace with Green aspirations. That won’t happen. That can’t happen.
More than half of commercially usable cobalt comes from a single country: the Democratic Republic of the
Congo (a near-dictatorial place that is neither democratic nor a republic nor all that far from being outright failed).
