23 February 2022

Cold War 2 is here – and the West has lost its edge

By Damien Phillips

As Russian forces take their first steps across the Ukrainian border and China talks openly about its timeline for conquering Taiwan, the 21st century is shaping up to be another clash between the West and authoritarian rivals.

If we really are about to enter a new Cold War – one which, like the old one, has plenty of scope for getting very hot indeed for countries caught on the front line – there can be no complacency. Liberal democracies might have won the last one, but there is no guarantee they will win the next.

But in the decades since the collapse of the Soviet Union, complacency has been the order of the day. This is most obvious on the military front, where few Nato members meet the unambitious goal of spending two per cent of GDP on defence (and the UK only manages it because George Osborne massaged the figures).

Take a broader industrial-strategic view, and the situation is even worse. China controls some 90% of global output of rare earth mineral products; Russia not only wields huge power over international gas markets but also controls strategic minerals vital to Western aerospace and defence industries.

I want to zoom out even further. Defence shortfalls pose an acute danger; industrial exposure a medium-term one. But the Western failing which might do the greatest long-term damage to our prospects is on the home front: the fact we don’t get anything built.

Side-by-side comparisons of American and Chinese high-speed rail expansion are already the stuff of memes. But Britain has nothing to shout about.

We have still yet to give a green light to either Heathrow or Gatwick expansion, despite the fact a single runway will not even make that big a dent in our long-term capacity constraints. Crossrail is four years late and a billion pounds over-budget.

And this is the unhappy fate of building projects in London, this country’s golden child. Elsewhere, it’s even worse. 

HS2 is running years late and has wildly exceeds its initial cost projections – to the point where there are now allegations Parliament was actually misled about the project – even before the Government decided to scrap the eastern leg last year. Plans for upgrading creaking regional infrastructure are shelved time and again.

It doesn’t have to be this way. Across the world, many of the UK’s former colonies and protectorates are forging ahead with major projects with the sort of spirit that carried our Victorian forebears to distant lands in the first place.

Singapore, for example, is now ranked first in the world in terms of attractiveness for infrastructure investment. This is not surprising: the city-state is not only getting on with expanding its premier airport (again), but drawing up plans to expand its railway network by 50%.

In the Gulf, Qatar has used the upcoming World Cup to kick-start a $300bn programme of infrastructure investment, including developing airports, public transports, upgrading roads and new cities. Oman, meanwhile, is embarking on an ambitious plan to deliver a 2,100km railway network from scratch.

It’s entirely fair to point out that none of these states are liberal democracies and that it’s easier to get things done without any real consultative process. But to my mind, that’s precisely the challenge.

Communism lost the Cold War not simply because the Western alternative was morally superior, but because it worked. Capitalism, cut with social democracy to taste, delivered the good life, or at least a much closer approximation of it than the command economy alternative. Once the Soviet regime stopped hiding this from its people, the pretensions of the communist system became impossible to sustain.

If our approach had been merely morally superior, that might not have been enough. If you doubt it, just look at how the Chinese Communist Party has been able to strengthen its grip on power by delivering an essentially capitalist economic system. Economic liberalisation in the USSR might, under different leadership, have followed a similar track.

For all their many, many shortcomings, today’s tyrants or authoritarians are not wedded to the absurd and self-defeating strictures of Marxist economics. There is thus a real danger that a sclerotic West gives them a chance to show, both to their own citizens and developing nations, that they have a genuine alternative to the liberal and democratic order we have come to take for granted.

And if we continue to fail to modernise and drive growth, or even to build enough homes to give the next generation a shot at the good life, perhaps that strand of authoritarian thinking might even find an audience here.

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Damien Phillips is an international affairs specialist and the Director of Proactive Public Affairs. Columns are the author's own opinion.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.