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

by Peter Zeihan

If there was a moment in history that a power could have made a bid for global domination—for a new Rome to arise—this was it. And if there was ever a good reason to make such a bid, it was the nuclear-tinged competition that was arising with the Soviets the day after the guns fell silent in Germany. It didn’t happen. Instead, the Americans offered their wartime allies a deal. The Americans would use their...

The Americans would open their market—the only market of size to survive the war—to allied exports so that all could export their way back to wealth. The Americans would extend a strategic blanket over all, so that no friend of America need ever fear invasion again. There was just one catch. You had to pick sides in the Americans’ brewing Cold War. You could be safe and rich and develop your economy and culture how...

Instead of forging an empire global in scope, the Americans bribed up an alliance to contain the Soviet Union. The catch-all phrase for the pact is Bretton Woods, named after the New Hampshire ski resort where the Americans first made the pitch shortly after the Normandy invasion. It is perhaps more commonly known...

Even with the strength of the U.S. Navy, the Atlantic and Pacific Oceans are some serious moats—and moats work both ways. The logistical costs and overreach of maintaining permanent forward-positioned garrison systems several thousand miles over the horizon simply wasn’t practical.

As the Americans discovered in the decades that followed, it is difficult to occupy a country on the other side of the world if the locals don’t want you there. Korea, Vietnam, Lebanon, Iraq, and Afghanistan were often more than the Americans could handle when they were managed one at a time. Imagine what it would have been like to occupy Germany and France and Italy and Turkey and Arabia and Iran and Pakistan and India and Indonesia and Malaysia and Japan and China (and Korea and Vietnam and Lebanon and Iraq and Afghanistan) all at once.

Partly it was a culture clash. The United States was the modern world’s first democracy. Democracies are pretty good at defending their own and tearing down dictatorships and fighting for truth and justice and all that. Long-term occupations expressly designed to bleed the locals dry? That’s a harder sell.

If the United States couldn’t—or wouldn’t—forge an empire to fight the Soviets, then the Americans needed allies that were sufficiently numerous to make a difference, sufficiently proximate to the Soviet border to mitigate America’s distance, sufficiently skilled in land-based warfare to compensate for America’s naval and amphibious nature, sufficiently wealthy to pay for their own defense, and sufficiently motivated by their own independence to bleed for it should fighting be required.

The American break with the traditions of international relations went beyond its abandonment of the to-the-winner-go-the-spoils style of post-bellum realignments. It also extended to the nature of human existence itself, resulting in a fundamental rewiring of the human condition.

At war’s end the Americans used Bretton Woods to create the globalized Order and fundamentally change the rules of the game. Instead of subjugating their allies and enemies, they offered peace and protection. They transformed regional geopolitics by putting nearly all the warring empires of the previous age—in many cases countries that had been in a shifting, cutthroat competition with one another for centuries—on the same team.

Instead of having to fight for food or oil, everyone gained trade access global in scope. Instead of having to fight off empires, everyone gained local autonomy and safety. Compared to the thirteen millennia of history to this point, it was a pretty good deal. And it worked. Really well. In a “mere” forty-five years the Bretton Woods system succeeded in not just containing the Soviet Union, but in choking it to death. The Bretton Woods system generated the longest and deepest period of economic growth and stability in human history.

Until the Americans won. On November 9, 1989, the Berlin Wall fell. Over the course of the next few years the Soviet Union lost control of its Central European satellites, Russia lost control of the Soviet Union, and Moscow even briefly lost control of the Russian Federation. Across the American alliance network, there were celebrations. Parties. Parades.* But there was also a new problem.

Bretton Woods was not a traditional military alliance. In order to combat the Soviets, the Americans had used their dominance of the oceans and superior economic geography to purchase an alliance. The United States enabled global trade and provided a bottomless market for alliance members’ exports. Without a foe, the Bretton Woods alliance lost its reason to be. Why expect the Americans to continue paying for an alliance when the war was over? It would be like continuing to make mortgage payments even after your house is paid for.

Given that the Soviet Union was gone, the Russians were in disarray, and the Islamic world was more or less quiet, the costs to the Europeans seemed low and the benefits high. The biggest issue the NATO alliance faced was the disintegration of Yugoslavia, a rather esoteric event whose spillover didn’t threaten the security of a single NATO country.

The 1990s were a nice decade for most. Strong American-provided security. No serious international conflicts. Global trade penetrated deep into the former Soviet space as well as into countries that had done their best to sit out the Cold War. The cost of the American overwatch and market access steadily expanded, but in an environment of peace and prosperity it all seemed manageable. Germany reunified. Europe reunified. The Asian tigers roared. China came into its own, driving down the price of consumer products. Resource producers, whether in Africa, Latin America, or Down Under, made scads of money helping more parts of the world industrialize.

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.

It was all kind of tedious, the very definition of labor intensive, and few ever really enjoyed it.* That hardly means there wasn’t money to be made, with the British the first to become interested at scale. It began by using ultracheap Indian labor (that’s South Asian “Indian,” not North American “Indian”) to do all the tedious, annoying work. The East India Company, founded in 1600 to bring in spices to make English food less soul-crushing, transitioned by the century’s end to more heavily focus on distributing Indian cloth throughout the empire.

As the 1700s rolled on, the British began importing cotton—at first from the Indian subcontinent and later the American colonies–turned–United States—and started building a larger-scale cottage-cum-guild industry for textiles. As the years ticked by and profits from cotton processing and textile manufacture grew, workers and bosses developed newfangled ways of increasing productivity, complexity, and durability.

Move from the small town to the city, and children quickly (d)evolved (in economic terms) into being little more than really pricy conversation pieces. And while more than one parent cries tears of sad joy when the kids finally move out, there tends to be little of the panic that would have occurred had such vacating happened on a preindustrial, near-subsistence-level farm. When much of the economic rationale for having children evaporates, people do what comes naturally: they have fewer of them.

available. As such, in preindustrial societies it was very common for a woman to bear more than six children during the course of her life. But break the link to the household and agriculture. Enable mass female education. Allow women to earn their own income. Even women desiring large families quickly discovered that careers tend to crowd out other items on their to-do lists, in part because—regardless of intent—spending a few dozen hours a week at factory job reduces the opportunities for pregnancy.

The second factor encouraging a collapsing birth rate sits at the intersection of women’s rights and industrial technologies: birth control. In the days before the Industrial Revolution, the most reliable method of birth control was good timing. Industrialization expanded the options list. In 1845 the U.S. government awarded a patent for rubber vulcanization to Charles Goodyear,* which set industry on the path to making cheap, reliable condoms. Combine such advances with the early women’s rights movements, and the political and economic stars of the fairer sex began their long rise—but at the cost of overall fertility rates.

The third incidental factor depressing birth rates can be laid at the feet of the Americans’ grand plan for their post–World War II international Order. The urbanization trend was already going full steam before the world wars blasted the old system apart, but with the onset of the free trade Order, the world’s most advanced economies—most notably Western Europe and Japan—were no longer burdened with a world of constant, high-velocity war. Countries could focus on what they did best (or at least, what they wanted to do best), and the security placidity of the Order enabled them to import food from half a world away.

The very nature of the Bretton Woods globalization process depressed birth rates by squeezing the agricultural sector across the industrialized world. In the pre–free trade world, importing food en masse was rarely a viable, large-scale option. That drove government calculations both economic and strategic.