Chris’ note: It’s been a scary year. Russia invaded Ukraine. China is threatening to invade Taiwan. And global trade is unravelling.
If you’re like most folks, you’re feeling anxious about what it all means… and where we’re going from here. That’s why, today, you’ll hear from geopolitical strategist and bestselling author Peter Zeihan.
He’s out with a new book, The End of the World Is Just the Beginning. It charts how the world order we’ve known all our lives is breaking apart. And it maps out a new kind of global disorder that will replace it.
This has massive implications not only for us as investors… but also for the societies we live in. If Peter’s predictions are even half right, it means massive change is on the way.
So, pick up a copy now. You’ll find a special Black Friday discount right here. Then read on for more from Peter on why the progress of the postwar era is over… and why no economic system we’ve imagined so far will work in the new world that’s coming.
The past century has been a blitzkrieg of progress.
From horse-and-buggy… to passenger trains… to the family car… to everyday air travel.
From the abacus… to adding machines… to desktop calculators… to the iPhone 14.
From iron… to stainless steel… to silicon-laced aluminum… to touch-sensitive glass.
From waiting for wheat… to reaching for citrus in supermarkets… to on-demand guacamole.
Our world has gotten cheaper… better… and faster.
And in recent decades, the pace of progress has accelerated.
We’ve witnessed the release of more than 30 ever-more-sophisticated versions of the iPhone in just 15 years.
We’re trying to shift to electronic vehicles at 10 times the pace we adopted internal-combustion-engine cars.
The laptop I’m tapping this out on has more memory than the total of all computers in the late 1960s.
The human condition has also improved.
As a percent of the population, fewer people have died in fewer wars… occupations… famines… and disease outbreaks in the past seven decades than in the rest of recorded history.
Historically speaking, we live in an embarrassment of riches and peace.
But there’s a simple fact that’s often overlooked.
We’ve been living in a perfect moment. And it’s passing.
The world of the past few decades has been the best it will ever be in our lifetimes.
Instead of cheaper, better, faster, we’re rapidly shifting to pricier, worse, and slower.
Because the world – our world – is breaking apart.
But before we look at where we’re going, it’s important to understand how we got here.
How Globalism Was Born
At the end of World War II, the U.S. created history’s greatest military alliance to arrest, contain, and beat back the Soviet Union.
What’s often forgotten is this alliance was only half the plan.
To cement their new coalition, Americans also fostered an environment of global security.
Any nation could go anywhere, anytime, trade with anyone, join any supply chain, and access any raw materials it needed without needing a military escort.
In other words, it created globalization.
It brought development and industrialization to a wide swath of the planet for the first time.
It generated the mass-consumption societies… the blizzard of trade… and the juggernaut of technological progress… we all find so familiar today.
And it reshaped global demographics.
Mass development and industrialization extended life spans. It also encouraged urbanization.
For decades, that meant more workers and consumers – the people who power economies.
One outcome among many was the fastest economic growth humanity has ever seen. Decades of it.
This postwar globalized order triggered a change in condition. By shifting the rules of the game, economics transformed on a global, national, and local basis. On every local basis.
That defines today’s world of advanced transport and finance… ever-present food and energy… never-ending improvements… and mind-bending speed.
But all things must pass. We now face a new change in condition.
From Order to Disorder
Thirty years after the end of the Cold War, Americans have gone home. No one else has the military capacity to support global security, and from that, global trade.
The American-led order is giving way to disorder.
You see, aging didn’t stop once we reached that perfect moment of growth.
The global worker and consumer base that supported the American-led world order is aging into mass retirement. In our rush to urbanize, no replacement generation was ever born.
Since 1945, the world has been the best it has ever been. The best it will ever be. Which is a poetic way of saying this era is doomed.
The 2020s will see a collapse of consumption, production, investment, and trade – almost everywhere.
Globalization will shatter into pieces nationally and regionally, and some even smaller than that.
It will be costly. It will make life slower. And above all, it will make life worse. No economic system we’ve yet imagined can work in the future we face.
This devolution will be jarring, to say the least. It’s taken us decades of peace to build the world we live in today.
To think we’ll adapt easily or quickly to this titanic unraveling is to showcase more optimism than I’m capable of generating.
But that’s not to say I don’t have a few guideposts.
Guideposts for the End of the World
First, place matters. Hugely.
The cities of ancient Egypt prospered because they had the perfect mix of water and desert buffer for the preindustrial age.
The Spanish and Portuguese rose to power in the 15th and 16th centuries not only because of their mastery of deep-water technologies, but also because of their location on a peninsula. This freed them from the general melee of the rest of the European continent.
Toss industrial technologies into the mix… and the story shifts again.
Applying coal… concrete… railways… rebar at scale takes a lot of capital. The only nations that could fund this development were those with an abundance of capital-generating navigable waterways.
Germany has more than any other country in Europe. This made its rise as a great industrial power inevitable.
But Americans have more than anyone else in the world – making Germany’s fall in World War II just as inevitable.
But these “geographies of success” change over time. As technologies evolve, the winners and losers shift with them.
For example, the Industrial Revolution began in England in the 18th century. This reduced once-mighty Spain to a backwater. And it heralded the start of the British Empire.
The coming global disorder and demographic collapse will be similar. It won’t just condemn a multitude of countries to the past. It will herald the rise of others.
Third, regardless of trade or product, nearly every process crosses at least one international border. Some – like smartphone chip production – involve hundreds of materials and processes spanning the global supply chain.
In the disordered world we are devolving into, that won’t work.
A deglobalized world doesn’t simply have a different economic geography, it has thousands of different and separate geographies.
Economically speaking, the whole was stronger than its parts. It’s where we got our wealth and rapidly advancing technology from. Now, the parts will be weaker for their separation.
Fourth, and most important, the U.S. will escape the worst impacts of the global churn and degradation.
America Will Survive and Thrive
That last one probably triggered your BS detector.
After all, the U.S. has ever-rising economic inequality… ever-fraying social fabric… and an ever-more-bitter and self-destructive political scene.
How can I say the U.S. will thrive through something as tumultuous as the breakdown of globalization?
I get your reflexive disbelief.
I grew up during the age of duck-and-cover. It’s galls me that “safe spaces” in colleges… transgender bathroom policies… and vaccine benefits have crossed into the proverbial town square.
These have crowded out far more important issues such as preventing nuclear proliferation and maintaining America’s place in the world.
It can feel as though U.S. policy is pasted together from the random thoughts of a child from a biker-rally tryst between Bernie Sanders and Marjorie Taylor Greene.
But it isn’t about them. It has never been about them.
And I don’t just mean the unfettered whackadoos of contemporary America’s radicalized Left and Right. I mean America’s political players in general.
America’s strengths allow her debates to be petty. But those debates barely affect her strengths.
Americans have survived and thrived because our geography is insulated from the bulk of the world… and our population is younger than China’s or Europe’s.
And we’ll survive and thrive through the collapse of globalization for similar reasons.
End of a Golden Age
It’s perhaps the oddest thing about America’s polarized political scene…
We revel in petty, internal squabbles. But we barely notice the world is ending elsewhere.
Lights will flicker and go dark. Famine’s leathery claws will dig deep and hold tight.
Access to the inputs – financial, material, and labor – will cease to exist in sufficient quantity to make modernity possible.
The story will be different everywhere, but the overarching theme will be unmistakable.
We will remember the 75 years since the end of World War II as a golden age.
One that didn’t last nearly long enough…
Author, The End of the World Is Just the Beginning
P.S. You can find that Black Friday offer for my book here. Historically speaking, we’ve been living in a perfect moment. But now, it’s passing. And massive change is on the way.
If you want to know more about the collapse of globalization… and the paths we took that led us to this moment… snag your discounted copy here.
Today’s insight was adapted from The End of the World Is Just the Beginning. Copyright © 2022 by Peter Zeihan with permission from Harper Business, an imprint of HarperCollins Publishers.