Globalization in decline but US uniquely positioned to come out on top, argues geopolitical expert in new book
The unraveling was likely to happen in the 2020s, but political events and the pandemic sped things up
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In his new book, "The End of the World is Just the Beginning," geopolitical analyst Peter Zeihan says the upheavals in the world today are the result of an unraveling of the global order that has characterized the post-war era up through the present.
After World War II, the United States struck a bargain with its war-torn allies, that the U.S. would handle global security and in exchange, our allies would be granted access "to every supply chain in every market and every material in the world" if they sided with us against the Soviet Union, Zeihan said.
Workers lower an R1T truck body onto a chassis in the assembly line, April 11, 2022, at the Rivian electric vehicle plant in Normal, Illinois. (Brian Cassella/Chicago Tribune/Tribune News Service via Getty Images / Getty Images)
This arrangement led to mass industrialization and urbanization. What took the U.S. decades, took China, for example, a single generation to achieve in terms of economic growth and development. But industrialization came at a significant cost: nearly every developed nation – with a few exceptions – is experiencing significant demographic decline.
"When you move off the farm and into the city, you have fewer kids. And if you play that forward for 70 years, it isn't that the world is running out of kids – that happened 30 years ago – the world is now running out of adults," Zeihan said. "And so we've got a demographic bomb, happening at the same time that the Americans broadly lost interest in the structure that allowed the Old World to occur."
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In his book, Zeihan argues that China is experiencing perhaps one of the most significant demographic declines in the world.
"China compressed seven decades of demographic decline into a single generation. And if the new data coming out of the Census Bureau on China is correct, they already have more people in their 50s than their 40s than their 30s than their 20s in the teens," Zeihan said. "We are looking at systemic economic collapse within the decade assuming nothing else goes wrong."
China immigration inspection officers in protective overalls march near a container ship at a port in Qingdao in eastern China's Shandong province Sunday, Nov. 7, 2021. (Chinatopix via AP / AP Images)
Zeihan said the U.S. does not suffer as bad a demographic problem as other countries, given that the Baby Boomers in the U.S. had more kids than their counterparts around the world. While acknowledging that Millennials are not having kids to the extent their parents did, Zeihan argued that the implications of this won’t be felt for at least another 60 years, giving the U.S. time.
Another significant factor in the unraveling of globalization is the United States broadly losing interest in global affairs, being more preoccupied with domestic issues and petty politics.
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"The United States is just kind of done dealing with the world at the moment … we’re burning all of our mental bandwidth on things that are domestic," Zeihan said. "In some ways this is a positive because it means that we’re really not worried about the rest of the world. But for the rest of the world, it’s a bit of a disaster because the rest of the world doesn’t function in a globalized system without the United States holding up the ceiling."
Zeihan said that the upheavals of the world, namely supply chain disruptions, price shocks, and wars, were bound to happen anyway but were sped up by certain political and geopolitical events.
A rescuer stands on the rubble of a building destroyed by Russian shelling, as they start searching for bodies, amid Russia's Invasion of Ukraine, in Borodyanka, Kyiv region, Ukraine April 10, 2022. (REUTERS/Zohra Bensemra / Reuters Photos)
"It was always going to happen in the 2020s. COVID sped that up by probably two or three years, (former President) Trump by a year, President Biden, probably a year, then the Ukraine War, (there was) kind of a hard stop," Zeihan said. "We lacked the institutional and cultural capacity at the moment to have a globalized supply chain system, because that requires certain sacrifices that we are, at least for the moment, not willing to consider."
Despite the bleak picture Zeihan paints for the rest of the world in his book, he predicts that the U.S., with its relatively isolated geography, promising demographics, and simpler supply chains, is well-positioned to not only weather the storm, but come out on top within the next few decades. Still, this will take time and effort. To bring inflation down, and remain immune from disruptions in the fragmented global supply chain, for instance, the U.S. needs to double its industrial and manufacturing capacity.
"It's not a straight line. There are a lot of bumps along the road, there are a lot of things that we can and probably will get wrong. But the structural stuff we don't have to fight for. That's geographic, that's local, and that's demographic."
He added: "These are things that are working for us but are working against most of the rest of the world. And with every American build out for success, with every global decline, more money and more people with skills are going to relocate to the United States. So the ballast is good. The background is good, the future is good. But we still have to do the hard work. There's no way around that."
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Zeihan’s book, "The End of the World is Just the Beginning: Mapping the Collapse of Globalization" was released June 14 by Harper Business books.