Geopolitical analyst and author Peter Zeihan believes that the United States is pushing forward with deglobalization and that the trend is something that will not stop anytime soon.
The United States had the world’s largest economy before World War II. During the war, America had an economy that was “about the same size” as all of its rivals, cooperative nations, friends, allies, and enemies combined, Ziehan notes.
When the United States was facing Russia in Europe, Americans realized that “there was no way” they would be able to economically and politically support the conflict an “ocean away” from all the fighting that was happening.
“So, the solution was to bribe everybody, to use our navy to patrol the global oceans so that any one of our allies could go anywhere at any time and interact with any other player, access any material, and especially access the American market,” Zeihan notes.
“[The] catch was [that] you had to let the Americans write your security policies. So, never forget that from the very beginning, the very concept of globalization for the United States, it was never about economics or trade. It’s about security. We pay you to be on our side.”
This system worked for a few decades. After 40–45 years, the Cold War ended because the Soviet system “could not compete” against the American system, which gave rise to a vast security and economic alliance, he says.
However, things have changed since then. Many countries have come up economically in the past decades. As a result, the American economy is not “as large as everybody else put together.”
Declining Political Support for Globalization
The second reason is that America’s political support for globalization has fallen. “In the last 35 years, the Cold War has ended, hyper-globalization has risen, hyper-globalization has fallen, the baby boomers were in their prime, the baby boomers are now retiring, we’ve had the information revolution, we’ve got social media. [So], of course, we’re going to handle our politics differently,” Zeihan says.The factions which make up politics “move around.” Political parties have “lots of factions that are always struggling for dominance and influence. When politics shifts, those factional alliances don’t make sense anymore. And, so, they have to evolve.”
Unions have “largely fallen out” of the democratic coalition, with the Trump coalition “fairly successful at drawing them out.” The Trump administration also kicked the business community and the national security conservatives out of the Republican coalition—the two factions who were strong supporters of globalization for economic and security reasons, he notes.
“And so now, we’ve got the Biden administration and a Trump-led Republican coalition that is basically having a tug of war for the unions. So, it’s just like we can’t have a conversation about immigration in the United States because the unions don’t want to have it,” Zeihan says.
Demographic Change
The third and “biggest reason” why Zeihan believes there is no stopping deglobalization is demographics. When economies urbanize and industrialize, people move off from farms and settle into towns.“Instead of working on a subsistence agricultural system, you now are getting a services, a manufacturing, or an industrial job. And that means you are living in condos, or single-family homes, or town homes that are crammed together. And in that sort of environment, kids go from being free labor to just being expensive headaches and you have fewer of them.”
As a result, the world is now “literally running out” of people aged 40 and under. The entire idea of globalization is that there have to be people to buy the stuff that is produced.
The world is now entering a period where people who “traditionally have done most of the consuming,” those who are 45 years and under who have kids and buy homes and cars do not exist in “necessary numbers” to sustain the system.
Americans no longer have the economic basis to make the globalized system it has supported till now to continue working, Zeihan stated.
“We don’t have enough young people to consume, and the Americans are taking a political moment for themselves. It’s going to last a few more years in order to digest whatever is going to happen with the unions … [and] that is more than enough time to kill any remnants of the globalized system.”
The only way the United States would really want to “get back in this game” is if a security scare develops that scares Americans more than the rest of the world and Washington feels that it needs to pay for a new alliance. “[The] Ukraine war is not that.”
All the deals that the Biden administration has on the table are for security, Zeihan points out. “There’s not a single guns-for-butter trade.” Every single trade war, every single tariff that the Trump administration has put in place, has been “doubled and tripled down” on by the Biden administration, except for an aerospace deal with Europe.
Zeihan believes the Biden administration is “far more anti-globalization” than the Trump administration was or, at a minimum, is putting an anti-globalization stance into long-term American policy.
“So, even if the next president happens to be a strong globalist, they’re going to have to unwind eight years of anti-globalization sentiment that is now hardwired into American policy and another eight years under [Barack] Obama of just complete strategic apathy. You’re not going to do that in four years,” Zeihan predicts.
“So, we are talking best-case scenario. If you want to be involved in a globalized system, another six years before the Americans might belly up back to the table. By then, China will be gone.”
