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

by Peter Zeihan

Historically speaking, we live in an embarrassment of riches and peace.

All of these evolutions and more are tightly interwoven. Inseparable. But there is a simple fact that is often overlooked. They are artificial. We have been living in a perfect moment. And it is passing.

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.

Globalization was always dependent upon the Americans’ commitment to the global Order and that Order hasn’t served Americans’ strategic interests since the Berlin Wall fell in 1989.

The central defining trait in all this work is safe, cheap transport. Inhibit that and the rest of . . . everything simply falls apart.

There was even a period from roughly 1950 to 1975 with zero attacks on shipping.

If any single ship is unable to transport or disgorge its cargo, impacts cascade throughout hundreds to thousands of supply chains across multiple industries and multiple regions. Even brief delays at only a handful of ports would be sufficient to force a rationalization of entire industries, to say nothing of actually losing ships.

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. One way or another, our “normal” is going to end, and end soon.

The Order worked because only the United States had a global navy and everyone agreed to not target ships. That world is gone.

The Americans are not dependent upon international maritime trade for their food supply, their energy supply, or their internal or even the bulk of their internationally dependent supply chains.

Japan was the trendsetter in making

The last American president to even pretend to care about fiscal prudence was Bill Clinton, a dude not known for . . . prudence.

First, the fiat age has enabled economies large and small, countries near and far, to paper over their problems with cash.

Second, everyone—and I mean everyone—is doing it.

not expanding their money supply are those that have consciously chosen to forgo economic growth in favor of price stability.

Third, no one—and I mean no one—is printing currency at the same rate.

Between 1990 and 2020 this broad convergence of factors brought us the cheapest capital supplies and fastest economic growth in the history of our species. On top of the general craziness of the fiat age. On top of the hypergrowth of the Order era.

In many ways it was the same problem that ultimately gutted the gold standard: success begot use begot more success begot more use begot failure.

The Americans had become economically trapped in their own outdated security policy.

the very existence of the deepwater technologies owes itself to European attempts to avoid the Middle East altogether.

both production and exports from both the Persian Gulf and the former Soviet space are dependent upon both America’s global security architecture and the ability of foreign technicians to access both regions.

good rule of thumb is that a change in demand of about 10 percent results in a price shift around 75 percent.

The supply chain agony of 2021 was primarily about whiplashing demand. Deglobalization will instead beat us about the head and shoulders with instability in supply.

Containerization changed the math by making shipping more reliable,

because of the country’s accelerating demographic collapse, labor costs have gone up by a factor of fifteen. The majority of the country’s economic growth since the turn of the century has come from hyperfinanced investment rather than exports or consumption.

Within North America as a unit, more than 8 in 10 dollars (or pesos) of income is generated within the continent. That’s by far the most insulated system in the world.

Deglobalization—whether triggered by the American withdrawal or demographic collapse—will break the supply links that make most China-centric manufacturing possible, even before consuming nations more jealously protect their home markets.

When the Cold War ended, the Americans had the opportunity to do nearly anything. Instead, both on the Left and the Right, we started a lazy descent into narcissistic populism.