Introduction: Too much information
A while back, I was talking with an archaeologist friend about our very different professions. For an excavator of the past a basic intellectual skill is extrapolation, of guessing in an educated way as to how past civilisations lived based on the tiniest shards of evidence. Conversely, for a political risk analyst the key trait is prioritising, combing through the oceans of information out there looking for what is actually important and central.
For the problem of modern living is not too little information, but far too much. Trapped as we are in the 24-hour news cycle, there are a limitless number of stories from which we might fill the waking hours of the day. The problem is, of course, that much of this content is utterly trivial. Worse still, even events which are of some importance obscure those that will be the main historical headlines of our age.
Currently, Brexit in the UK (and the December election) and Impeachment in the US fall into this ‘important but overrated’ category. In the first case, in terms of the UK leaving the EU, the real world historical and policy question comes after the fact; can the UK quickly (in the next three to five years) conclude free trade deals with the growing Anglosphere (the US, India, Australia, New Zealand, Canada) or not? Yet you would not know this at all if you are read the daily output of the British media, where Brexit myopia holds sway.
Likewise, the US has had, and undoubtedly will continue to have, bad and even ruthless presidents long after Donald Trump has shuffled off this mortal coil. But it is more than a tad ludicrous and short-sighted that the impeachment inquiry—which has in one way or another dominated US news media coverage for years now—comes to a head in 2020, the very year when the American voter can choose to eject the president from the White House if they so choose to.
In both cases, while the stories are surely important, a lot of ink has been spilled in vain. For these are not the events that will be looked back on by historians as holding the keys to the future.
Winston Churchill and the virtues of taking a deep breath
The ability to discern when global game-changing events are happening in real time is to see history moving. It is an invaluable element in mastering political risk analysis. To do so, the analyst must adopt an almost Olympian view, seeing beyond the immediate froth to make sense of what is going on by placing it in the broader tapestry of world history.
It is jarring to compare the lacklustre abilities of today’s Western leaders—so far behind the curve in seeing the game-changing rise of Asia and the relative decline of the west, as we enter a new multipolar age—with the past phenomenal analytical abilities of true statesmen of vision.
Winston Churchill, despite being surrounded by monumental events (far greater than the Brexit and Impeachment controversies), still was able to separate the important from the strategically essential, even in December 1941, perhaps the most important month of the twentieth century, and the turning point of the Second World War.
During that brief and momentous time, Stalin’s Russia pushed back the Nazi invasion at the gates of Moscow, marking the first time Hitler’s vaunted war machine had met with a real setback. But for all that the blunting of Operation Typhoon mattered enormously, it did not change the overall balance of forces fighting the war, whose outcome continued to rest on a knife’s edge.
But half a world away, something else did. At 7:48 AM in Hawaii, on December 7, 1941, the Imperial Navy of the Empire of Japan, attacking without warning as it had done in the Russo-Japanese War in the early days of the century, unleashed itself against the American Pacific Fleet, docked at Pearl Harbour that Sunday morning.
The damage was immense. All eight American battleships docked at Pearl were struck, and four of them sunk. The Japanese destroyed 188 US aircraft, while 2,400 were killed and 1,200 wounded. Japanese losses were negligible. At the same time Hawaii was under attack, there were coordinated Japanese strikes on the US-controlled Philippines, Guam, and Wake Island, and on the British in Malaya, Singapore, and Hong Kong.
With the American fleet in flames, the Japanese hope was that the devastation at Pearl Harbour would so crush American morale that it would not move against Tokyo. To put it mildly, this strategic rationale shows no cultural understanding of the United States at all. The following day, December 8, 1941, America declared war on Japan.
The Japanese attack on the central US naval base changed the course of the war fundamentally, drawing in America as the decisive force which dramatically changed the balance of power around the world. Stalin, with his back to the wall in the snows of Russia, did not immediately get the game-changing significance of what has just happened any more than Franklin Roosevelt, who was now grimly intent of surveying the wreckage of America’s Pacific fleet and marshalling the US public for global war.
These were pressing times and it was entirely understandable why both Stalin and FDR had other more immediate concerns to worry about during those early December days. But Winston Churchill grasped the significance of what had just happened.
In his history of the Second World War, Churchill wrote of that seminal day, “Being saturated and satiated with emotion and sensation, I went to bed and slept the sleep of the saved and thankful”. Only America, with its endless resources, industrial might, manpower, and economic clout, could change the highly unfavourable balance of power that had prevailed since the loss of France in 1940, and been only partially ameliorated by Hitler’s disastrous invasion of Russia the following year.
On December 11, 1941, Hitler—compounding Tokyo’s incredible blunder—inexplicably declared war on the United States, to Churchill’s barely disguised joy. Hitler and the militarists running Japan were analytically entirely wrong; Stalin and Roosevelt were preoccupied with the momentous events in front of the gates of Moscow and in the Pacific respectively; only Churchill saw the big picture: the attack on Pearl Harbour had saved the world.
Today’s Hidden World Historical Events
The key to getting game-changers intellectually right is to start by asking a very basic question: does the event being assessed change the basic global power equation of the world? By this standard, neither the talked-to-death Brexit or the impeachment of Trump remotely clears the hurdle. Worse, our over-exposure to these important but not seminal events blots out seeing how the world is changing before our eyes.
Like Churchill we have to dig deeper. I think a compelling argument can be made that there are a number of game-changing forces at work just now that get nothing like the press they deserve.
First, we are entering a queer sort of multipolar world, where the US, as was true for Lord Salisbury’s Britain, remains the dominant global power by a long ways even as other countries (China above all, but also India, and other emerging market powers) relatively gain on Washington from a low base year-on-year.
Second, in practice this means that China and India continue to rise, Europe is in absolute decline with the United States somewhere in-between, weathering the rigours of the new era better than the old continent, but still watching with alarm as China becomes a peer competitor. Asia is indisputably rising, possessing much of the world’s future political risk as well as offering much of its coming economic reward. One way to look at this is that the world historical headline for our time may well simply read that after 500 years, Western domination of the world is at an end.
Third, if this is so, the key political risk question is thrown into sharp focus: Can the US see off Beijing over the next decades—either through accommodation or confrontation—and can it rally India and the other rising Emerging Market powers to its side, even as it renews its alliance with fading but still important Europe?
This, and not the endless drivel about Trump and Brexit, is what those tracing the game-changing forces in the world ought to be thinking about. Like Churchill, we must go beyond the noise, and even beyond the important, to see what truly matters.
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