Subtitle: The Next Generation of American
Preeminence and the Coming Global Disorder, Hachet Book group, NY., 2014, 373
pgs., Index, footnotes, maps, tables, graphs, paperback
I really love it when I find an author who agrees at least mostly with my long
held beliefs, and can flesh out the arguments with detailed historical facts.
Reading the three books has been exciting - trying to write summary and
comments is even more thrilling. My only criticism is that although he does
stress the ability of a society (country) to generate capital inexpensively, he
does not devote enough analysis of each country's financial
system among its strengths or weaknesses nor financial warfare as a means to
enhance national power.
His basic presumption is that the Americans are about to reject - give up -
their national basic foreign policy since WWII as instituted by the Bretton
Woods Agrement, namely to organize a world economic system and defend it with
the U.S. Navy and other military and political power as needed. The result wil
be chaos. It will be interesting to learn if the Americans will withdraw, as he
believes they are doing now, after confronting the realization that such
devastating chaos with threats DO have a world wide basis from such 'invisible
enemies' (in President Trump's words) as a health pandemic. I wonder if, when
the American people observe the chaos he rightly predicts, they will continue
to want this American withdrawal or will again expect the government to engage
America in another rescue.
This is the first of three books Peter Zeihan has published on the same general
themes. This one, dated in 2014, and in some respects overtaken by events since
then, is nevertheless important as it sets the firm and unchanging background
for all three. The three should be read in sequence but together. My brief
summaries and comments cannot replace your study of the books. They are packed
with data and are written in a clear style that is enjoyable to read, so please
His fundamental concept is that humans live in environments set by geographic
real factors - weather, climate, topography, locations relative to each other
and to natural resources and more. In the first several chapters he writes a
summary of the results of these factors as they have influenced human history.
Mr. Zeihan rightly demonstrates that much of American power rests on the
ability to create capital relatively inexpensively and that since Bretton Woods
the U.S. has been exporting capital to the world - especially to China. The
Chinese have been using American capital internally to increase power and to
gain power elsewhere. My only question on this score is that I believe he under
estimates the determination and violent efforts the Chinese leadership will
employ to achieve their objectives. They will not give up that method
But please study Chapter 14 in which he presents a much different analysis of
China than that which we read from Dr. Pillsbury and many others who raise
great concerns about a future with Chinese as a world power. I leave for the
review of his third book consideration about why Americans (and which
Americans) have desired to assist China to become a world power. But in the
list of references below I include many recent books on China and the
objectives and strategies of the current Chinese Communist party.
But what is the central factor that enables a society in one place to prosper
while another in a different place does not. Mr. Zeihan frequently refers to
'capital' and its creation. But he apparently believes the readers understand
what 'capital' IS. I doubt that. He skips over fundamentals expecting readers
My thought on this is: The fundamental basis of life is consumption. But all
consumption requires prior production. In primitive societies producers consume
all they produce and consumers produce all they consume. However, consumption
is largely immediate, while production requires a time delay interval, so a
means for storage of things between their production and consumption is
required. Both production and consumption are social activities, meaning they
are performed by a group varying from family to clan to tribe to larger early
societies. But with the advent of specialization of labor producers do not
consume all they produce nor do consumers produce all they consume. Both
exchange things between themselves (on a society wide basis). Both activities
require distribution. And distribution itself consumes some of the production
as it creates a group of distributors.
So Mr. Zeihan is actually focused on these three fundamental issues -
production, distribution and consumption. Plus, the first 'thing' that is
required in all these to be produced and exchanged is energy. And the source of
energy is NOT distributed evenly throughout the world but in some places
favorable for some humans and not favorable for other humans. So it is the
history of production, distribution, and consumption of energy first and then
of all other things (material and immaterial) that humans desire which is the
first subject of the author's three books and then how this will all change.
And the second subject is how all this results in the production, distribution,
and consumption of POWER.
The specialization of labor described here should lead to study of who are the
producers and who are the consumers and distributors. And then what proportions
of a society comprise each group. This would show that reliance only on the
typical analysis one reads of the standard demographic distribution pyramids in
which it is presumed that the non-producers are the people either too young or
too old to be the producers is misleading. This fails to consider that millions
of individuals within the age groups deemed productive are NOT. We leave
discussion of this subject to different essays.
One of the critical results of the above is the relative expense of the various
methods for distribution of produced goods by movement through space - that is
the cost of transportation (not only of material goods - but also of ideas -
that is communications). Then he presents examples of the changing abilities of
various societies located in favorable or unfavorable geographic conditions to
take advantage of the relative costs of transportation to advance their status,
power, and even level of civilization. And these relative costs have changed
dramatically over time due to development of technological capabilities. But
still today, as it was throughout history transportation and communication via
water is less expensive than overland. The technological ability now to move
through the air and via computers linked to Internet complicates the situation.
That geography is a fundamental factor in determining human history is not a
new idea. There are many books on geopolitics that stress the importance of the
geographical environment in influencing what societies can and cannot achieve.
Since production, distribution and consumption are all accomplished by
individuals in groups - people - another basic factor is the relative
attributes of producers, distributors and consumers in society. A fundamental
attribute of population is demography which influences the relative number of
potential producers versus consumers - and the relative amount of consumption
by people in different age groups.
Returning to the idea of 'capital'. Capital is the retained earnings from
production - that is the value of the amount of production not consumed by
production itself plus distribution plus the immediate needs for consumption.
And technology plus knowledge determines the quantity value of new capital that
the investment of existing capital can create.
His second major theme is the impact on the world that has taken and is taking
place due to the U.S. decisions on what and how to use its
"Accidental" position as the world 'super power': - Meaning in
location and in demography and in technical capacity and in knowledge of how to
translate all these into Power.
Since World War II the U.S. has used its 'superpower' capacity both to finance
much of world commerce and to protect it with its naval control of the sea
lanes. Throughout the three books he identifies the origin of this U.S. policy
and its implementation to the Bretton Woods Conference in which the allied
powers and others met in 1944 to establish the post war monetary policy that
would take the place of the 'gold standard' regime that had proceeded World War
I but had failed during the interwar era and Great Depression. What happened is
that the U.S. replaced the U.K. both in the use of sterling as the financial
base and the British Navy as the provider of protection.
The U.S. (with reluctant acquiescence of the other powers) established a two
tier system in which the U.S. agreed to fix the value of the dollar to a
specific quantity of gold and the other countries would 'peg' their currencies
to the dollar. And also, in practice the U.S. undertook to defend and organize
the world-wide commerce network - that meant under the defense of the U.S.
navy. But now the U.S. is getting tired of playing this expensive role and will
withdraw both its financing and protection.
His third major theme is that by coincidence American technological skill has
unlocked the vast quantity of oil and natural gas in shale formations in the U.
S. which, while being known for decades, has been technologically too expensive
to extract. It is not only the physical attribute that the shale deposits
contain Oil and Natural Gas, but that their locations are ideal from their
relatively low expense of distribution. As is true with every technology the
practicality of its application depends on the financial situation, such as
interest rates for instance. This is a further reason the U.S. has not only the
desire but the ability to withdraw from protecting the rest of the world. The
books contain a detailed summary of the technical and financial aspects of
extraction from shale and its impact on the world oil and natural gas industry.
An interesting added factor, which M. Zeihan notes, is the different ownership
rules in the U.S. of underground resources. This American capability to extract
and distribute oil and gas from shale (and also from many other places) is
protected by the geographical factors he describes. But will it be secure from
financial warfare? We leave that question for book three.
The fourth major theme is that the demographic structure of each society - the
size of its population in each 5 year birth increment - is shifting between
societies with some resulting in much worse ratios of dependent elderly
consumers to young producers than is the case for others. As I mentioned above
and he does not consider, it is also affected by changes in the work and
non-work habits of those in the presumed working age increments. And shortage
of a working population may be alieviated by development of AI and robots.
Mr. Zeihan believes a period of chaos will ensue after this American
withdrawal. This is mostly predicted in this volume and its results are
described fully in the third volume.
An important subject that Mr. Zeihan discusses in the course of his wide topic
of the American impact on the world is its relation to China's effort to become
the world superpower. His view is very different from those who are predicting
China' future success. He demonstrates that China's rapid development over the
past 20 years or so has been achieved Because of American direct and
indirect support and that absent this in the future China's fundamental
weaknesses will prevent its leaders' desired achievement. This can be
considered in two ways: they will fail - or in a more desperate and aggressive
effort they will pursue even more risky policies.
Mr. Zeihan's final conclusion from all three books is that in the long run -
after the chaotic era is over - the U.S. will emerge as an even more powerful
world superpower in spite of its self, due to its overwhelming fundamental
advantages from geography, demography and energy production, which result in
its being the largest and largest per capita creator of capital.
The author also publishes commentary on the Internet. Links to books 2 and 3
are below. I include in the review of book 2 - a longer list of references
relevant to the trilogy.
A brief personal account by the author of his long interest in the subjects he
addresses, especially geography and geopolitics. He introduces the basic idea
of the role of geography underlying geopolitics.
Interestingly, he comments that his personal ideology is 'green,
internationalist and libertarian' but his analysis is of the facts, which he
does not like. He writes: "Demography tells me an ever larger slice of my
income will be taken to fund a system that is ever less dynamic and
accountable. I am not required to savor my conclusions. This isn't a book of
recommendations on what I think Should happen. This is a book of
predictions about what will happen".
Chapter 1. The World We Think We Know
The chapter is about the international conference held at the New Hampshire
resort - Bretton Woods - in 1944. He describes how the American delegation
played hard by dominating on the obvious basis that the U.S. would exit WWII as
the world superpower. The British didn't like it. Neither did the French, but
they knew that France was very weak. The European powers hoped (and maybe
expected) to be able to retain their empires, but the Americans had much
different ideas. In comparison with the disastrous results from the Post WWI
negotiations the Europeans and others could hardly believe how well off they
would be even under American power. Among the results was the creation of the
World Bank, The International Monetary Fund and the International Bank for
Reconstruction and Development.
The author identifies the issues - questions - that then dominated post war
international relations - such as, why did the Americans advocate and create
this new international system - how could they afford to do so - and why
continue. It was the Americans who created the world, free market, commercial
and financial system - financed it and defended it with military power. After
all, it appeared that the Americans were generous and accepted huge financial
losses by financing the world into recovery that would create competitors. He
provides specific metrics to show that the American dominant position now,
since Bretton Woods, is mostly the same.
Actually, he believes, American relative power in the world is set to increase.
But this American system of one world is ending and chaos will ensue.
He describes his organization of the material into four parts. First, how
geography 'shapes international interactions: Second, discussion of the current
international situation: Third, ideas about the changes coming in the future:
and Fourth, his description of five specific crises he considers will threaten
Skipping ahead, he previews his discussion of three fundamental geographic
factors that underlie economic - hence - political power:
1 transportation, its difficulties and ease here or there:
2 abilities of various nations to take advantage of access to deep water
3 industrialization. He considers that in all three of these underlying
essentials the United States posses the 'most favorable' assets and attributes.
He writes that American power is based on this condition, hence is in a way
'accidental'. He wants to explain how and why this is.
Chapter 2. Egypt: The Art of Getting from
Here to There
This chapter is about the role of superior conditions that favor less expensive
transportation of goods and services, begining with agricultural production, in
the ability to generate capital (savings from the production process) that can
finance other developments. He summarizes this: "Cheap, easy
transportation does two things for you. first, it makes you a lot of
money." It has been the main way in which 'capital' is created.
He, throughout, stress this term - concept - Capital - without actually making
clear for the reader what that actually IS. Shifting from some remarks about
water transportation in the United States, he then discusses at considerable
length the early creation of what can be called - civilization - in Egypt due
to the peculiar aspects of the Nile River.
In this digression I disagree with some of his historical specifics, but agree
with his basic conclusions.
Chapter 3. Technological Revolutions:
Deepwater Navigation and Industrialization
Moving on from water transportation by river, he turns to deep water
transportation in and across seas and oceans. His specific example is
interesting. He credits the Ottoman Empire with generating great power due to
its control of the Sea of Marmora - the water link between the Black and
Mediterranian Seas. Well, yes, but what about much earlier control of the same
place by the Athenians and then the Romans and Byzantine Romans? Historians
credit Roman control of the entire Mediterranian with creation of their Empire.
And more significant, the collapse of the Western but not Eastern Roman Empire
to the loss of control of the Mediterranian.
He continues, by mentioning Ottoman economic power generated by its control of
the western end of the Silk Road from China, true of course, but that control
was not due to the Sea of Marmora but to control of Alexandria and the
Levantine coast. And he lays their defeat in conquest of western Europe to
their defeat at Vienna in 1529. More significant were their defeats at Malta
Moreover, it was their final capture of Byzantium and full control of Marmora
and Crimea that very soon energized the western Europeans - such as the
Portuguese - to find new routes to the Orient, which he next discusses. By 1529
the Portuguese had already siezed control of the Indian Ocean and the Red Sea.
Deep water Navigation 1: Expanding the field
In this section he describes in some detail the new technologies -cross-staff,
caravel, gunport - that enabled the Portuguese and then Spanish to circumvent
Ottoman control of the Silk Road route between East Asia and Western Europe -
and then even more with the control of the Western Hemisphere and Pacific.
Deep water Navigation II: England's Rise
He skips over the lengthy expansion and control of trade by the Dutch to move
to a brief description of English replacement of the Portuguese.
Industrialization I: Manufacturing a New World
In this section he focuses on the replacement of human and animal muscle power
by coal and its result, steam. Then he notes the development of chemicals and
The German Pressure Cooker - and Industrialization II: The German Juggernaut
An excellent, well explained description of German increase in power based on
development of industrialization.
Chapter 4. Enter the Accidental Superpower
Mr. Zeihan points out that the United States was favored from the beginning by
its 'inherited' best lands (I would say conquest of best lands) in the world by
many measures. But he then focuses again on river transport as the most
significant of all. He credits the existence of an excellent river system with
the creation of 'capital' without explaining exactly what that term means. But
his point is that considering that transport of production to the locals for
its use or consumption can be so great as to make such movement uneconomic when
by overland. But cheap river transport enables generation of very significant
profit out of the movement itself in addition to the initial value of the
cargo. He describes the Mississippi river system in detail. But to this is
added the unique intercoastal waterway system. Together they provide 15,500
miles out of the national total of 17,600 miles of navigable water ways. Plus
there are others as well.
His result is stated thusly: "The result is that the United States has the
greatest volume and concentration of capital-generation opportunities in the
world by an absolutely massive margin, and that opportunity is very heavily
concentrated in a single united system."
He continues by pointing out other American advantages, such as: "The
American geography is also a recipe for a consumer base that is absolutely
massive." Another is the availability of credit. Another is the fertility
of the land and its location in the temperate climate zone. Each of these
advantages alone, he believes, would make the United States a world superpower.
He provides plenty of maps to demonstrate all this to the reader.
Here, I should mention that the black/white printing of the book makes
distinguishing variations on the maps difficult. But he has remedied this
recently by publishing on line full color editions of his maps.
Then comes the location of all this, secure from foreign invasion by mountains
and even more so by huge oceans. Plus of course he mentions American security
from its only two land neighbors. The chapter is filled with discussion of many
Chapter 5. Buying Off Geopolitics
This chapter moves on to geopolitics. The author begins with: "For most
countries geopolitics are unforgiving. If you exist in harsh terrain or among
harsh neighbors you just don't have many options for managing your affairs,
assuming circumstances allow any options at all."
But, he stresses: "America's physical place in the world is not just
benign, but empowering."
The Limits of Superpowerhood
The author turns to a brief summary of World War II with emphasis on the fact
that the war left America with even more power than it has pre-war from its
location and physical endowments. Its new strategic position was 'awesome; in
its 'sheer magnitude'.
His summary: "It was the single greatest concentration of power that the
world had ever seen." But there were problems and disadvantages. He
contrasts the United States' world situation with that of Soviet Russia.
Waging Peace: Free Trade as a Weapon
In this section Mr. Zeihan discusses: Access to the American market -
Protection for all shipping - A strategic Umbrella as well as 'The lure of
Bretton Woods' as the main policy and action segments of the American
geopolitical program to counter the Soviet Union. It was very successful, for
one reason among many, because it was so favorable for those nations that
mattered that they willingly, even eagerly, joined in. Among the potential
problems was that the British and French didn't much like the cost to them of
loosing their empires to independent nations. (see the Suez War in 1956).
Scared New World: An Expensive Antique
The author's main point here and in the remainder of the three books is that
maintaining this Bretton Woods based system that the Americans created is
expensive and now, not only unnecessary but counter-productive. It was a
'strategic tool all along, not an economic strategy.'
The one worlders are sure to object to this.
"For the Americans, international trade has typically been a
They will hate this idea.
Further, "The Americans are no longer gaining a strategic benefit from
that network, even as the economic cost continues." So the Bretton Woods
era will end.
"But that is only the first of three imminent convulsions that will tear
the global order asunder."
Chapter 6. The Demographic Roller Coaster
In this chapter Mr. Zeihan describes the second convulsion - the world-wide
changes in national demography. He combines demographic change with
Demographics, Capital, and Technology
It is technology resulting in industrialization resulting in the rapid shift
from rural to urban living that has created the drastic decline in birth rates,
especially in the developed (meaning industrialized) nations to the point that
they no longer maintain their populations. This impacts everything. He
describes the many results. He presents many of the standard pyramid shaped
graphics that show the relative size of each 5 year increment in a country's
population. In these graphics he distinguishes those year groups in the 0 to 29
year age segments from the 30 to 59 year groups from the 60 + year age groups.
To these he adds some information about national finances, capital fleeing some
countries, oil production data and other variables to expand the analysis of
what the future will bring.
Rage, Rage Against the Dying of the Light.
In this brief section the author discusses what various countries are doing or
can do about this coming lack of critical population - that is workers.
The American Exception: Youth, Immigration and Regeneration
Again, it turns out that the United States is in relatively a better situation
in this factor than many other 'developed' countries. however while the United
States will remain the world's by far largest consumer market, the long list of
other countries for which the Bretton Woods system was created by the Americans
their consumer markets will shrink drastically. Another reason the Americans
will loose interest in maintaining and funding the system.
Chapter 7. The Rise of Shale
Next comes the impact of the revolution in oil - natural gas production from
shale formations. This book was written and published in 2014, rather early in
this revolution and the author is mostly predictive in his assessments. A much
more detailed analysis complete with copious technical and financial detail in
in the second book in the series. This chapter includes several maps showing
locations of shale formations. The topics the author includes are :
A bit of Geology to set the Mood
- He explains the creation of shale deposits.
He notes that over time the official estimates on the quantity of oil and gas
recoverable from shale have been increasing rapidly and shows a graph depicting
the huge increase in U.S. oil production
(On the Verge of ) Shale Acceptance
He notes that so far Americans have not been trusting the shale industry. They
have been concerned about many detrimental aspects of the drilling and
Shale: An Industry That Speaks with an American Accent
He believes that nevertheless the industry is due to expand.
I,. Huge Deep Capital Markets
The development of recovery of oil and gas from shale requires a huge amount of
2. Highly Skilled Labor
It requires experts in many scientific and industrial fields.
3. A Legal Structure That rewards Landowners for Their Participation
A very important difference that many people do not realize is that Americans
are unique in comparison with Europeans in that In Europe and elsewhere the
government claims ownership of EVERYTHING from under the ground surface, while
in America the individual land owner owns everything under his land as well as
on it. That is a huge incentive for the American to seek to profit from
subsurface resources such as coal and oil.
4. Preexisting Natural Gas Collection, Transport, and Distribution
The extraction of oil from shale also means the extraction of natural gas. The
transport of natural gas to markets requires its own infrastructure. Often this
is too expensive so we see a great deal of natural gas for years has simply
been burned off at the well head.
The Benefits of Shale
These are many including that it is 'cleaner' and produces less CO2 than other
fuels, especially coal.
Shale and Geography
The author includes more maps showing locations. One U.S. advantage is that the
gas producing shale deposits are relatively near the consumption markets.
Shale, Transport and Electricity
Even though the transport of natural gas is expensive and its market price is
falling, much of it is produced in the same process that extracts the oil, so
it is an add on. And natural gas has a huge market in the production of
Scared new World: The United States Moves On.
The author dramatically states that the impact of production of oil and natural
gas from shale will have a world-wide 'enormous' impact.
Chapter 8. The Coming International Disorder
Technology Development, and the Modern World
The author believes the world economic system is 'downright bizarre' due to the
fact that any country can import or export from anywhere without fear of
danger. This is historically unprecedented and entirely thanks to the U.S.
financial system from Britton Woods Agreement and the U.S. capability and
willingness to apply the power of the U.S. Navy to enforce security. The first
creates the financial open free trade system and the second inhibits erstwhile
He writes that this has created "the greatest era of peace and prosperity
the world has ever known". One cause is the advance of technology that
enables countries to participate in the prosperity despite formerly
considerable geographic problems. Another is the availability of capital
(credit) at low cost. And this is available due to the safe flow of capital in
international markets to argument the internal capital a country may create.
He expands: "On the global scale industrialization allowed potential city
sites to import everything they needed.... " He elaborates at considerable
Another point: "The American dictum that it Bretton Woods partners get
along suspended normal geopolitical patterns." This enabled counties under
American protection to reduce capital expenditure on military defense and
devote it to economic expansion.
And more: "Mass financing plus mass trade lowered the bar to entry for
countries looking to manufacture goods for export."
But, he believes, this nirvana is about to end. "The last seventy years
have been incredible. But the trends we have both witnessed and enjoyed are
nevertheless temporary, And they are nearly over."
Surfing the Peak
He draws attention to the day in 2007 when the first American Baby Boomer
applied for Social Security benefits. Demography strikes and he describes the
results, especially on the availability of capital. His conclusion is that in
the short run the great expansion of available capital will fuel increased
demand and thus consumption and rising asset values. But wait.
Mr. Zeihan believes that this financial 'wave' will crest between 2020 and
2024. The coming demographic decline and end of international free trade will
wreak havoc. Demographic decline will 'contract' the credit markets. Interest
rates will increase. Consumption will decrease. International markets will
contract. The U.S. all along has protected the Persian Gulf oil, not for its
own sake, but in the interest of its allies - especially in Europe. Result is
the end of economic expansion. Countries will be either to import or export or
both, but into shrinking markets and without the safety of the American Navy.
He provides many, many specific statistics. For instance, of the 30+ European
countries, only one, Norway, is self sufficient in Oil and Natural Gas.
Likewise is the situation of many other industrialized countries throughout the
world. Obviously, the more industrialized a country is the more it depends on
energy - i.e., oil and NG. But also, the 'industrialization' of agricultural
production makes even food supply in danger.
(Except for France, which, thinking way ahead, invested years ago in nuclear
In reverse, the Middle East countries have plenty of oil but cannot feed
themselves. The historical record indicates that when a country lacks anything
it essentially needs it will exert what power it has to obtain it. He presents
a stark picture:
"The wars of the not too distant future won't so much be for glory or
pepper, but in many cases for the ability to remain part of the modern world.
Or simply to remain."
America in the new Disorder
Mr. Zeihan believes that although the U.S. also will feel a negative impact, by
virtue of its geopolitical strength, (land, demographics, energy,
transportation) it will gain relative strength. He devote pages to describe all
Scared New World: The American Scenario
He considers that if the Americans care to intervene the descent into chaos
could be at least gradual. But he doubts if the Americans will want to do so.
Chapter 9. Partners
Who's Who in the Disorder
In this chapter he categorizes various countries in accordance with potential
'stability' and includes maps to aid the reader. He considers six categories:
1 State failures.
2 States decentralizing
3 Degraded states
4 Steady states
5 Rising states
6 Aggressive states
Partners: American Allies in the New Era
These, he believes, will be 'friends' for 4 main reasons:
North America: The Inner Circle
For many reasons Canada and Mexico will be 'integrated' into one economic
system not needing either Bretton Woods or the U.S. Navy
Cuba: Prodigal Returns
The topic - consideration - of Cuba is because its location can control or at
least interfere in both the Florida and Yucatan Straits.
Columbia and Venezuela: Wealth or Ego?
South America geographically is not a unity. These two countries are entirely
different from those to the south. Columbia accepts its role with the U.S. and
Venezuela does not.
The Americans don't have to consider European interests very much and they
won't. Denmark and Netherlands will act as middlemen to the rest since they
control all access into and egress out of the rest.
The United Kingdom:
The book was written before that UK exited from the European Union.
Asia: Free Trade in Miniature
Sure to be an ally
Another likely ally
Taiwan and South Korea
Their strategic position makes them countries the U.S. would want as allies.
Key to the Strait of Malacca
Australia and New Zeland Natural reliable partners plus they will ensure South
Philippines Malaysia, Indonesia and Vietnam
They lack geographic conditions to have or exert power but they have potential
resources and recognize that they need American assistance.
Chapter 10. Players
These are countries 'not fortunate enough' to be American partners. They likely
will be forced to take actions to maintain national power.
Russia: Twilight Approaches
The author devotes considerable text and maps to describe how and why Russia
will continue to decline. Not only its indefensible geography, but also its
terrible demographics indicate it must act aggressively. And the Ukraine and
Central Asia create an even worse situation.
Turkey: An Ancient Power Awakes
The author gives high marks for Turkey's future. But I believe he places more
cause for the past in the Sea of Marmora than it deserves. He devotes
considerable space and attention to a detailed description and analysis of
Turkey's strengths and weaknesses and sees much potential in Turkey's future.
His prediction that Turkey will engage in significant military competition with
Iran over Iraq has already come true. He outlook for Turkey versus Russia IN
Ukraine is very interesting and thought provoking. He includes Turkish
confrontations with Russia in the Caucuses and Central Asia as well.
Uzbekistan: Survival of the Fittest
The Uzbeks are the strongest people in Central Asia and will be able to exert
all the power they want over their neighboring Kazakhs, Turkomen, Tajiks and
Kyrghiz. The central confrontation will be over water.
Saudi Arabia: Wrath of the Righteous
Mr. Zeihan comments: Saudi Arabia is a quintessential example of the sort of
oddities that Bretton Woods encouraged to proliferate." And "This
transformation (about oil) was - and remains - utterly dependent upon the
current global setup." He notes that Saudi Arabia is fundamentally 'weak'
and does not even have an indigenous work force. And they too have a big
problem with Iran. In this section Mr. Zeihan includes comments about Iraq and
Japan: Dusting off Tojo
Japan prior to World War II and since then and today and the future has now
natural resources. It must rely on naval power to secure everything. Moreover,
it is an already rapidly aging population. With an excellent map and text he
describes what Japan 'needs' and what it must do. This includes for sure good
relations with the United States.
Angola: Managing Genocide
The author notes the prevailing difficulties that geography places on nearly
all of Africa. But, he indicates, Angola 'stands out' and it has a bright
future. It cleared multi-ethnic internal division with a civil war leaving the
Mbunda tribe in full control. Their chief concern now comes from South Africa
with competition to control the valuable (economically and strategically)
plateau to their east and South Africa's north. Angola's demography is very
favorable, even in comparison with the favorable situation in South Africa.
Iran: From Enemy to Ally
The author devotes 8 pages to extensive description and analysis of the sources
of Iranian strength and weakness. He identifies four neighboring powers that
Iran would target: Mesopotamia, Saudi Arabia, the Caucuses states, Georgia and
Armenia and Turkey. Thus, the American departure from the Persian Gulf won't
help the Iranians as much as they hoped because they will face all four
And Now Things Get a Bit Complicated
In summary Mr. Zeihan sees America having a 'high bar' to cross before engaging
in any of the forthcoming confrontations. -See the following chapters
Chapter 11. History Returns to Europe
The future of Europe will be 'messy indeed'.
The European Geography
It is full of rivers, mountains, islands, broken highlands, coastal plains, but
lacks significant internal defensive terrain. The excellent maps depict all
this. It was American creation and enforcement of the Bretton Woods Agrement
that enabled the many European national societies to devote themselves to a
more common agenda of economic expansion instead of confrontation and defense
preparatory to more conflict.
Problem One: Enter the Euro
The European river system lacks the unity of the American system so it does not
serve to generate much capital. The effort to alleviate this by creation of the
Euro is failing since the financial crisis.
Problem Two: Banking, the Sick Man of Europe
The author again: The European financial crisis has had many economic impacts,
but the results have been worst in banking." The organization and
relationship between European banks and industrial corporations is much
different than that of America. So European governments use their banking
systems in different ways in pursuit of different objectives. He includes a
revealing graphic chart depicting the 'private sources of funding, 2011. It
shows massively greater bank lending and much less reliance on equity funding
than in the U.S.
Problem Three: Two Drivers, no Steering Wheel
There is competition - especially over power to control - between Germany and
France resulting in frequent deadlock. In this section he does include the
relative power of the German financial system and its power versus that of the
Problem Four: Out of Money (and Time)
In this section he discusses economic 'growth' meaning expansion and names the
three methods to achieve that: 'consumption-led', export-led, and
investment-led'. Some economists would dispute all except investment-led. He
identifies four European countries most in danger from inadequate economic
capability - Greece, Portugal, Spain and Italy. As evidence he includes a
combined demographic pyramid for these four in 2000. It depicts the bulge in
the then 35 -=20 year groups and lack in age groups younger than that. Then he
includes the pyramids for Italy, Greece, Spain and Germany for 2015. All four
show a lack of the younger age groups. They cannot use a 'consumption-led'
policy. They all depend on Germany continuing an 'export-led' policy. The
German ability to support the others will end.
Problem Five: Germany in Crisis
He believes German policy in both World Wars was not do to aggressiveness but
to desperation. The country's geographic location makes it vulnerable. To
counter that the Germans for a century have adopted a massive industrialization
policy. His map demonstrates German position. He believes that German policy
success since World War II has been based on the result of the U.S. Bretton
Problem Six: Aggressive Neighbors
The two aggressive neighbors are Russia and Turkey. It does seem obvious, as he
states, that Russian aggressive behavior stems from the concept that the attack
is the best defense. Russian weakness - and coming greater weakness - dictates
they act while they can. But I am a bit surprised that he believes Turkey can
even harbor any dreams that it can exercise significant power in Europe.
Problem Seven: Men in the Middle
These are the Poles and other north-central Europeans - the Baltics - and to a
lesser degree the Romanians and Bulgarians. They all recognize danger, but a
unity of action of the group is not feasible. At least the Poles do have a
strong support from Sweden.
Scared New World: Life After Europe
He repeats his pithy conclusion: "In short, Europe is going to be a mess..
a seething caldron of dislocation and war that it was in the five centuries
before 1945." Only France has created and exercised a national policy
during that time that will provide significant strength. Mr. Zeihan, as usual,
spells out the components of French power. He writes: "Between its low
needs and high leverage, France has not just the greatest capacity to shape
Europe, but the greatest wealth of tools with which to do so."
Chapter 12. The Alberta Question
The chapter is about U.S. future relations with Canada and Canadian internal
problems, mostly caused by geography.
The Unlikelihood of Canada
Canadian natural resources are not located in the optimum positions. The author
describes the problems created by mountain ranges and high plateaus west and
east of its central region that inhibit transportation and communication to
both coastal provinces. The result, he indicates is that Canada is divided into
5 rather separate regions. One result is that the agricultural production of
the central provinces is shipped to markets through the U.S. using the
Mississippi to New Orleans. His map depicts the problems. Another problem is
that from early in the 19th century (while Canada remained a British
possession) the British did not invest enough capital in developing the
Canadian Demography: Slouching Toward Dissolution
Surprisingly, the Canadian population is aging greatly. By 2025 the population
will be much the same as that of Japan. And immigrants cannot reach it as
easily as to the U.S. since Canada lacks a land border except with the U.S. He
provides the usual chart depicting the demographic situation in 2015.
The Quebec Question: Asked and Answered
From the outset the geographical split up forced a political structure of great
decentralization, with each individual province holding much political power.
The reverse of that is that the central government does not provide much
assistance to the provinces and several of them such as Alberta pay higher
taxes to the national government which uses them to subsidize other provinces.
The Alberta Question: Not yet Asked, Already Answered
The author again provides both demographic chart and a map depicting the flow
of Canadian Energy - that is oil from Alberta to the U.S. rather then to the
Canadian east or west coasts. Q.E.D. The text includes: "To date,
landlocked Alberta's efforts to reach non-American markets have failed
utterly." But the situation of Alberta's citizens is even worse because of
the drain on Alberta by the Canadian government.
The author summarizes vividly: "The core issue is pretty simple. While
Quebecois - and to a slightly lesser degree the rest of Canada - now need
Alberta to maintain their standard of living, The Albertans now need NOT to be
a part of Canada in order to maintain theirs."
The American Option
It turns out that if Alberta were to become an independent country its profit
from it oil would drive the relative value of its money up so much that it
would cause its agricultural production sector to collapse. Plus that would not
solve its transportation problem. Mr. Zeihan considers that joining the U.S.
would solve many its problems - and he includes a long list. He believes that
as a U.S. state Alberta would be the richest of them. (He, as usual, provides
the facts in a table of comparative per capita GDP.) The larger result would be
the complete dissolve of Canada as a unified country.
My own opinion for a long time is that in not too many years we will have a
complete unification of North America at least similar to the EU - that means
Canada, Mexico and the United States.
Scared New World: A World Without Canada
Mr. Zeihan opens the section by stating that as of 2013 the U.S. and Canada
were each other's "largest trading partners." And this of course long
before the new trade agreement. Further, he points out that such a combination
would itself reduce American involvement in the rest of world trade by 2% of
GDP. He then takes up the only remaining country.
Chapter 13. The North American Drug War
The author opens with his assessment that Mexico is 'assaulted' by three trends
- "shifting trade patterns, inverting demographics, and spasming energy
The Geography of a Failed State.
As always he focuses first on geography and then on geopolitics. His
description of detailed and vivid. Hopefully it reasonably understood by the
readers so I won't elaborate - It is very BAD. A map depicts this.
Yet Success Anyway: The Four Factors
The impact of these will convert Mexico from very 'junior partner' into much
1 Chinese Labor Costs have Skyrocketed Chinese initially took much production
from Mexico, now it will be coming back.
2. American Shale Is Supercharging the Mexican Electricity System
A result I and perhaps others have not realized. A map depicts details of
pipelines for American shale produced natural gas to reach throughout Mexico.
3. Mexican Demography Generates a Large Market and a Larger Labor Pool
Well the large labor pool is obvious since so much of its members try so hard
to reach the U.S. Again a chart of Mexican demography shows the huge population
in the younger age groups.
4. The Drug War has Improved Mexico's Economic Prospects
Unfortunately at the cost to Americans. But, he notes, the internal drug war
reduces the cost of labor IN Mexico.
The Nature of the Border
Mr. Zeihan focuses on the huge economic value of the result - namely that it
being a contiguous border between to economic powers it enables massive cross
border trade profitable to both countries. He supplies the data. He also favors
the result in the cross border movement of people and culture.
The North American Drug War
The author gives the reader a brief history of the drug trade. Initially much
of the drugs moved by water and into Florida, but American naval skill reduced
that significantly. This generated the movement through Mexico, even though it
is more expensive - official estimates are more than $10,000 dollars a kilo.
The change also generated more competition and warfare between drug suppliers.
His map depicts the % of American population by county that is Hispanic. Again,
the book is as of 2014 so does not consider changes since then.
Scared New World: Something to be Scared About
He advocates changes in immigration law which have not occurred. He presents a
very grim future (from 2014) which so far has not occurred. "Should the
Americans, however, choose to leave the border and ghettos as is, they face the
dawn of the most horrible conflict they have ever fought."
Perhaps the building of an effective wall may be an adequate solution.
Chapter 14. The China Wars.
Mr. Zeihan considers the standard American views of China to be exaggerated. In
population the Han living in the north are different from the various people
living in the south and west. Chinese geography and demography will win out.
The map and demographic pyramid are illustrative.
The Northern Militarists
Mr. Zeihan immediately focuses on the ancient geographic problem of coping with
its rivers (the Yellow especially) and devastating floods.
Philip Ball recently published a fascinating whole book on this - The Water
Kingdom. And years ago Karl Wittfogel included Ancient China as one of his
principle examples of and in Oriental Despotism.
As both authors also concluded: "As a result, Chinese society has
developed along starkly different lines than Western Versions." And,
"The result is that a successful Chinese government must be very tightly
managed" -An 'Oriental Despotism".
But there are other problems as well. China's geography cuts the huge area into
separate segment and also includes relatively limited agricultural and living
space. And China's population includes many very large groups of non Han
"Economically, the result is a system with little trade and even less
In contrast to the Han, the Yangtze is a powerful economic asset. It is
navigable for great lengths - both above and below the Three Gorges. But its
course prevents real political unification rather than promoting it.
The Southern Secessionists
There the geographical complexity creates a wild divergence in population,
economic wealth, and political conditions. The southern Chinese have always
been separatists in culture and independence minded from the northern Han.
.. And the Rest.
They comprise some 600,000 of the total population of China and are not
Chinese. They occupy the western and south western huge territories such as
Tibet and Chinese Turkistan. Geographically they are separate from coastal
China by mountainous terrain.
The author believes the Chinese are 'non-naval'. In general, yes, but what
about the Chinese navy in the centuries prior to its destruction by the Ming
Emperors. But a 'myth' that he rightly dispels is that China has ever been a
truly unified nation. Its geographic extent has waxed and waned depending on
the power of a central government to conquer the various separate cultural-
political regions. And its many separate border regions face different
conditions in relation to their external neighbors.
Japan: China's Bogeyman
Japan has always been a maritime nation. Plus, the Japanese geography lacks
almost every natural resource the people require, forcing them to seek to
obtain (or control) such resources from other places (and peoples). Among these
of course are the Chinese and their coastline is vulnerable to Japanese
The China We Know
Mr. Zeihan poses the question about how China with its basic disabilities has
suddenly emerged as such a significant world economic - military power. His
answer is the Americans. The Americans saved it from Japan in WWII. The
Americans prior to that forced the reduction of European powers' domination of
parts of China. The American enforcement of Bretton Woods Agreement after WWII
prevented any renewed Japanese interest in or ability to seeking control over
any of China. The Chinese have been able to take advantage of American power
and economic means to expand first internally and recently to seek external
Problem One: The Financial System
As he noted previously, China's geographic disunity has created regional
disunity in its population. It lacks sufficient 'social binding'. The Communist
Party realizes this. It has used the financial aspects of the Bretton Woods
Agrement to create a financial system in which its central Party control of
money supports central Party political control. Such private savings as exist
are diverted by the Party to its own priorities. Mr. Zeihan names the four
powerful banks that execute Party policies. But this 'distorts' the results. He
describes some of these in detail. Basically, it controls the allocation of
capital, it subsidizes desired investment and curtails consumption. It
generates and allocates debt as it desires. It fears unemployment and social
disorder so allocates capital via lending operations in hopes of preventing it.
He provides a graph to depict the massive increase in 2-12-2013 of the 'shadow
banking' on top of official lending that reached a sum of $5 trillion on an
economy that is only $8 trillion in total. The author contrasts the results for
China with those in Japan and U.S. from recent government policies. His
conclusion is that the Chinese financial system is 'unstable' - he remarks that
"the entire Chinese system is subprime."
Problem Two: Demography
Chinese demography (distribution of population into different age groups) was
already becoming adverse. But the 'one child' policy has wrecked it. The result
is that it created a massive disproportion between elderly and young - meaning
between consumers and producers. He presents the usual demography pyramid for
1990 and that for 2015 and 2040. By 2015 the age group younger than 29 is
already declining in numbers. By 2050 the age groups younger than 54 will be
younger. China is aging before it became wealthy - its median age has already
increased in comparison with the United States. Mr. Zeihan reminds us that 'it
takes 20 years to create a 20 year old.'
Problem Three: Dependency on America
In this section the author expands on his thesis that the Chinese growth
'miracle' has been based on American support (largess). He writes that Chinese
'survival' is 'beyond Beijing's control'. He describes four specific reasons
that American 'backing away' would be 'disastrous for China'.
1 The Chinese system under Bretton Woods has been structured for export.
2. China is the world's largest importer of many resources.
3 In the future China will face Japanese competition and increase in relative
4. The geography that created the chain of islands and nations that block
Chinese access to the world oceans will reduce Chinese maritime ability even if
it greatly expands the capability of its navy.
The New/Old China
Mr. Zeihan writes what some of us observers have claimed for years but that
American China supporters deny. "China is the country that has benefited
the most from the American Cold War strategy of market access and defeating the
various maritime powers, and therefore has the most to lose". He
continues: "the Chinese face three crushing challenges." These are:
Japan, geography and the economy is dependent on a very favorable international
economic and strategic environment. He provides a map that depicts "China
Hemmed In'. Further, he writes that China has been on the verge of 'disaster'
for some time and lists several examples of popular uprisings and government
He devotes several pages to describing various potential specific disasters.
Again, There is an excellent may depicting "Chinese Economic
Concentrations' - that is region by region economic dependency, with most
dependent on exports.
Scared New World: Reverberations of a Fallen Giant
This is a very interesting section. In it the author notes that the great
'rise' - that is increase - of China as a world economic power has had very
significant impacts and results throughout the rest of the world. The future
result will be that China's decline will also have dramatic results for others.
He claims that the results will be decidedly negative for three and favorable
for one power.
One result will be that the recent Chinese expansion of production - exports
and imports - had negative effects on such countries as India and Mexico - so
Chinese decline will result in world wide reorganization of these with some
countries (he believes Mexico for one) will be favored over others.
Another result will be a sharp decline in China's import of raw materials
meaning a decline in the export of those from elsewhere.
Another result will be increased Chinese demand for increasing import of food
Another result will be increased world demand for American financial assets -
dollars - U.S government bonds. The relative value of the American dollar will
Chapter 15. Migration and Terrorism
The places (countries) that have benefited the most from the past 70 years of
American security will be busy coping with their own problems. Some will be
overcome, some will requite extensive effort to survive, some will be
The Changing Nature of Immigration
In many countries the desire to flee will increase but the ability to do so
will be reduced due to the lack of the Bretton Woods Agreement security system.
International travel will no longer be easy, cheap and safe. Much immigration -
emmigration can still be local. The wealthy and those possessing labor skills
in demand will be able to find ways to move further. Another map depicts the
combination of "Global stability and Skilled Migrant Sources". The
'skilled labor' is in Japan, South Korea, parts of the US and northwestern
Europe and a very narrow part of China. The U.S will be the most likely target
area of migrants. It will also be attractive for the Americans as added skilled
labor will offset the demographic problem created by low birth rate. No one
will be able to compete with America.
Militancy Goes Big and Goes Global, but Terrorism Stays Home
By this he means that militancy will become a global phenomena but resort to
terrorism will be limited to local places. There will be many types of local
conflict. Militancy is conflict between a population and its government or
non-existing government. The author mentions a few examples out of many. He
defines terrorism as an extreme tool of militants of practical use only in
specific situations. But 'transnational' terrorism is a tool used by
transnational groups for different reasons it becomes both a means and the end
itself. The author produces the same map of stability but with an overlay of
Muslim population concentrations. From this he finds two areas of concern.
The Pakistani Vise
Mr. Zeihan considers this to be the region of greatest concern. He relates this
to the American effort to stamp out al Qaeda and Taliban in Afghanistan. He
predicts that: 'it is highly likely that the Americans will have no more than a
token presence in the country beyond 2016".
In 2020 we see that was a very optimistic prediction.
His point is that the American policy and actions brought attention to the
problems of Pakistan. These are many and fundamental for the usual geographic
and demographic reasons. With another excellent map and decisive analysis he
summarizes the existential problem - Pakistan. The ruling elite sought to
create a national culture on the basis of militant Islam thus generating
support from the warlike mountain tribes. Now that the Americans have replaced
the Russians in Afghanistan while the lowland Pakistani government seeks
support from Americans those fanatical Muslim mountain peoples have turned
against that government declaring it a traitor to Islam. American support of
the Pakistani government will decrease of evaporate along with American
departure from Afghanistan.
So far, in 2020, the author's expectations for Pakistan have not reached a
disastrous level. The Muslim terrorist activity remains locally constrained.
The Other Russia
This is Mr. Zeihan's other area of concern. This is due to it being the only
other region in which Muslim terrorist groups are capable of generating a
capacity to strike at long range. He again defines Russia as an 'unstable'
region. It is a 'multi-ethnic empire.' He terms it a 'Hordland'.
The Chechen Rebellion Continues
This section is a comprehensive summary of the events of the two recent Chechen
Wars and other Chechen terrorist attacks. The author believes the Chechen will
win eventually. Moreover he notes that the Tatars - especially those around
Kazan on the Volga, while peacefully enjoying their status, could with little
difficulty totally disrupt Russia. And even worse for Russia is the demographic
problem - rapidly reduction in Russians and increase in Tatars and other ethnic
Scared New World: Nasty, Brutish, and Short ... or American
A final summary - while the rest of the world collapses into conflict the U.S.
will have an even greater future.
Epilogue. The American Age
Mr. Zeihan repeats - the Americans will have a great future. He writes that:
"all of this: the dissolution of the free trade order, the global
demographic inversion, the collapse of Europe and China - is all just a
fleeting transition." Something else will develop after 2030. From
2015 to 2030 the transition period will be the time of chaos or as he writes, a
"Hobbesian period". He foresee a new world order after 2030 in which
full dominance of American will develop due to three intervening processes. The
other world powers and lesser states will engage in destructive conflicts. The
Americans will mostly avoid all that. And by 2030 American demographics will
have 'inverted' again when the Boomer bulge cohort will be passing away and a
new cohort will be taking their place. This concept is very much like the ideas
of Harry Dent and Neil Howe who think in terms of demographic cycles.
Interestingly, he believes the Americans will not have to execute any actions
since the changes are built into the demography and geography, due to America's
favor in both and other countries disfavor.
Appendix I. No Fear: Climate Change
In this appendix Mr. Zeithan expresses his personal belief in the potential
challenges of 'global warming'. But from all the publicly issued global threats
he insists that America will not suffer, but only 'mildly'. Europe would suffer
greatly, as would other regions, especially China.
Appendix II. Demography and Trade
This is a table depicting demography and trade statistics of many individual
country for a series of years.
References - but see the review of volume 2
for a more extensive list.
Peter Zeihan -Disunited Nations: The
Scramble for Power in an ungoverned World This is book 3, the most recently
published volume in the series.
Peter Zeihan - The Absent Superpower
This is the second book in the series - the links I include in review and
commentary of this book also contains a list of some reference books for all
Robert Kaplan - The Revenge of
Philip Ball - The Water Kingdom - A Secret
History of China
Peter Frankopan - The Silk Roads: A New
History of the World
Johathan D. T. Ward - China's Vision of
Graham Allison - Destined for War
Michael Pillsbury - The Hundred-Year
Marathon: China's Secret Strategy to Replace America as the Global
Gordon G. Chang - The Coming Collapse of
Robert Spalding - Stealth War: How China
Took over While America's Elite Slept
Kai-Fu Lee - AI Super-Powers China,
Silicon Valley, and the New World Order
Andrew R. Wilson - Understanding Imperial
Andrew R. Wilson - Masters of War:
History's Greatest Strategic Thinkers
Kwasi Kwarteng - War and Gold: A 500-year
history of Empires, Adventures, and Debt
William Strauss & Neil Howe -The
Felix Martin - Money: The Unauthorized
Marin Katusa - The Colder War: How the
Global Energy Trade Slipped from America's Grasp Writing this in 2015 the
author completely misses the shale revolution - and reaches conclusions the
opposite from Mr. Zeihan for that and other reasons - but the book is worth
Harry S. Dent Jr. - The Demographic