New Order

Oct 23, 2023

UPDATE: After China entered the period of “reform and openness” in the 1980s, Western liberalism, embracing a form of ‘apocalyptic modernity’, adhered to the fantasy that China “would become like us.” What it meant in fact was that China “would become like us but be subservient to us”. If China was not going to “become like us [and be subservient to us]” it had to be put in its place. It is time to call this out.

The recently concluded summit of the five member states of the BRICS (Brazil, Russia, India, China and South Africa) agreed to expand membership to include from next January Saudi Arabia, Iran, Argentina, Egypt, Ethiopia, and the UAE. Western media and commentators’ responses have been a farrago of sneering at the unlikely hodgepodge of countries that will now be members, raising the spectre that this group is setting itself up in opposition to the G7, and is an anti-West alliance of Global South members.

Hungarian Foreign Minister Peter Szijjarto has emphasised that the global economy has turned upside down over the past few years, resulting in a fall in the bloc’s economic position, which Brussels is making worse with its indiscriminate sanctions policies. He reiterated that recent sanctions against Russia and the drive to abandon Russian energy “shot the European economy first in the foot and then in the knee.”

If, as it appears, the election will come down to Trump vs. Biden, the US is headed for a constitutional crisis, and the social, and political chaos that implies. Like prisoners of the economists’ dilemma, there seems no easy way out. Whichever wins, the others’ partisans will pronounce the president to be fundamentally illegitimate. In turn, Illegitimacy justifies and emboldens scorched-earth tactics, more norm-busting and institution-destruction.

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China and the apocalypse: How the West reinvents the end of history

By Gary Sigley

After China entered the period of “reform and openness” in the 1980s, Western liberalism, embracing a form of ‘apocalyptic modernity’, adhered to the fantasy that China “would become like us.” What it meant in fact was that China “would become like us but be subservient to us”. If China was not going to “become like us [and be subservient to us]” it had to be put in its place. It is time to call this out.

With regard to China and its place in the international context, certain narratives and belief systems have deep roots. I’m not suggesting that every policy decision or policy maker is informed by the liberal eschatology that I shall outline below. What I am suggesting is that as mindful observers it is important that we be prepared to identify these people, institutions and governments and call them out.

The Hebrew Bible relates the story of how Daniel during his captivity in Babylon interpreted a prophetic dream of Nebuchadnezzar II of a statue that from head to toe is composed of gold, silver, bronze, and a mixture of iron and clay. The statue is destroyed by a stone which becomes a mountain “filling the whole world”, in other words the “eternal Kingdom of God”.

In the Early Modern Period – about the same time Columbus “discovers” the “New World” in 1492 – Daniel’s vision was interpreted as describing the succession of empires of antiquity, namely the Babylonian, Persian, Greek and Roman empires. This was described in Latin as translatio imperii – literally, the succession of empires. The belief was that the divinity only ordained there to exist one empire at a time, namely, a “universal empire” ruled by a “universal monarch”. Through a divinely ordained process the “baton of history” was passed from one empire to the next. Ultimately, however, the “end of history” would prevail and the “eternal Kingdom of God” be established. This historical terminus would be preceded by “the apocalypse”.

A number of monarchs in Europe claimed to be legitimate successors of the Roman Empire and the Universal Monarch: Charlemagne, Ferdinand and Isabella, Dom Manuel, Charles V, and more besides. This view of imperial succession was also held in the Islamic world by figures such as Suleiman I and even the Mughal emperor Jalal al-Din Muhammad Akbar I. Translatio imperii and its core vision continued to adapt to new circumstances and was explicitly used to legitimate the British Empire in the 19th century. Napoleon in the early 1800s claimed that the Roman Empire had been reborn in France. Although the term begins to decline in favour, the essential idea of a single and legitimate “empire” that is divinely ordained continues to persist, and is clearly evident in the discourse of Pax Americana and American exceptionalism of the late 20th and early 21st centuries.

I refer to the form of translatio imperii that develops from the 19th century onwards as a form of “liberal eschatology”. It is during this time that “liberalism” develops as a self-reflexive discourse of political philosophy and colonial expansion used to justify the ascendancy of the West at a global scale. This part of the story is well known. But it is only one part. The other part is the liberalism – very broadly defined – that embraces “apocalyptic modernity”. That is, liberalism as a narrative that is always searching for the signs of the “end of history”, signs that its vision of a “universal empire” in the form of, for example, a “global rules-based order”, are about to materialise. To reach this stage, however, requires first vanquishing the enemy, or in apocalyptic terms, the antichrist.

This entails a form of geopolitical foresight which, informed by the tradition of Judeo-Christianity, assigns the role of the antichrist, or arch enemy, to different political entities and ideologies. During the course of the 20th century, especially during the Cold War, it was the USSR and the ideology of Bolshevik Marxism that played this prophetic role. Post 9/11, when the US was the global hegemon and some had even declared “the end of history”, this role shifted to Islamic extremism (which it should be noted has its own apocalyptic eschatology).

For much of this time “China”, that is, the People’s Republic of China, was not on the radar. After China entered the period of “reform and openness” in the 1980s and as market reforms deepened from the 1990s onwards, Western liberalism adhered to the fantasy that China “would become like us”. What this implied was that China would open its markets to Western capitalism, and its culture, including its political culture, to Western modernity. Over time, the fantasy held, China would be integrated into the Western – that is, US–dominated world order. What it meant in fact was that China “would become like us but be subservient to us”. This is an essential tenet of translatio imperii in the form of its US exceptionalist incarnation, one informed by a mixture of Christianity and White supremacy.

However, for mindful observers, under the leadership of the CPC, China was always going to find its sovereign path. This finally became obvious to everyone with the ascent of President Xi Jinping from 2013. Suddenly China was no longer playing its part in the narrative of liberal eschatology. So the script had to change and “China” become the new antichrist.

In being sensitive to the changing status of “China” within this liberal eschatology, I began a detailed investigation of how “China” has appeared in Western, mainly US, Christian discourse and how this has dovetailed with changing geopolitical circumstances. I found that “China” didn’t begin to feature prominently in the various apocalyptic narratives of Christian writing until around 2007/2008 when for some it was apparent that, in the wake of the GFC, the global order was undergoing a dramatic transformation. This process of scriptural transformation, both in religious and cinematic terms, was accelerated by the experience of the global pandemic, which in itself was perceived by many as an apocalyptic event.

During this time China was literally demonised and anti-Chinese racism found new strength. The world of the conspiracy theorists went mainstream, and China was accused of wanting to “rule the world”, of co-opting the United Nations, of engaging in bio-warfare, and so on. The Western fear of the “Asiatic hordes” had returned (in fact it never went away). If China was not going to “become like us [and be subservient to us]” it had to be put in its place. Thus began the process of strategic realignment that we have seen occurring with the formation of the Quad, AUKUS and so on.

It is time to call this out.

Read more here.

Another brick laid building the new order

By Geoff Raby

Of the BRICS five, only China and Russia seek to challenge the influence and authority of the US-led liberal West. Of the new members accepted at the Johannesburg meeting, only Iran stands against the West. The majority of the original five member countries are democracies and a minority autocracies. With the addition of new members, democracies will now be in a minority within the group, while Egypt is a US-sponsored military dictatorship.

In a time of global geopolitical competition, all the democratic members of the BRICS maintain good working relations with Washington, even while resisting US demands to do more to push back against the autocracies. Some of the future non-democratic members also maintain close relations with Washington. What then is the cement that binds the BRICS together?

When Jim O’Neil of Goldman Sachs first used the term BRIC in a 2001 research report, it applied to a group of emerging economies that were then presenting themselves as a distinct, high-growth, part of the global economy. South Africa joined in 2010 and so the ‘S” was added. BRICS members were identified as relatively high growth economies compared with the G7 at the time. Consequently, they were attracting strong inflows of capital which in turn were supporting higher rates of economic growth.

The BRICS Five account for 40 per cent of world population and 26 percent of global GDP measured at purchasing power parity (PPP). With the new members, the BRICS Eleven will account for 46 per cent of world population and 30 percent of global GDP. The G7 account for 10 percent of world population and 27 percent of world GDP.

In 2012, at the fourth BRICS summit in New Delhi, it was agreed that the group would be given form and institutional structure with the creation of the BRICS Bank, later renamed the New Development Bank (NDB). This was then given substance in February 2016 with the establishment of the NDB, headquartered in Shanghai, with an initial capital of $US100 billion. At present, UAE, Uruguay, and Bangladesh are non-BRIC members of the NDB. The new members of the BRICS will automatically join next January as part of their accession to the BRICS.

Like the Asia Infrastructure Investment Bank (AIIB), the emergence and expansion of the BRICS stems from the same dissatisfaction with the Bretton Woods institutions dominated by the G7. China’s economic ascendency would always have put strains on existing international financial arrangements. Naturally, they represent the interests of the founding members and their relative economic weight at their time of formation. They have proved obdurate in the face of China’s rise. While the Bretton Woods institutions have been unable or unwilling to accommodate the big shifts in global economic weight of the past thirty years, other countries, mainly led by China, have sought alternative institutions for managing the global economy.

Only China has had the economic heft in the global economy to set about restructuring the international financial order by creating new institutional arrangements that better reflect the shift of economic power from the G7 to the Global South. China is not radically upending the international economic order. Path dependency makes this hard to do. The snail’s pace at which the world’s biggest trading economy can increase the share of international payments settlements in RMB highlights the inherent inertia in the system. It is incremental, but the direction of change is clear. Adding new members will see a bigger share of payments conducted in RMB, but still the share of the total will remain small for a long time.

The significance first in the establishment of the BRICS and then its expansion in Johannesburg is that it is part of a suite of international institutional arrangements with China as the driving force. China has demonstrated over and again creative institutional entrepreneurship to change the US-led international order. Moreover, until recently, it has done this largely under the nose of the West which has generally sought to ignore or downplay these developments.

In 1997, in the wake of the collapse of the Soviet Union and emergence of newly independent states in Central Asia for the first time, a meeting of Russia and three Stans (Kazakhstan, Kyrgyzstan, and Tajikistan) was convened in Shanghai. Out this the Shanghai Five Group was formed which was initially focussed on arms control along China’s land frontiers and counter-terrorism measures. In 2003, Uzbekistan was added to the group. It became the Shanghai Cooperation Organisation (SCO). In addition, to arms control and counter-terrorism, joint military exercises were added, as were new members over the years. India and Pakistan are two of the more recent additions.

Then in August 2013, in Astana in Kazakhstan, Xi Jinping announced the Belt and Road Initiative (first called One Belt, One Road). At first confusion reigned over what this was supposed to mean. A herd started to slap Belt and Road labels on every Chinese foreign policy initiative. it spread like spilt ink across the map of the world. Its origin, however, long predates Xi’s Astana speech. Its genesis lay in China’s elevated strategic vulnerability to sea-borne imported crude oil and resources which were and remain vulnerable in the face of US naval preponderance.

From the early years of this century, as China’s dependence on foreign markets to supply much of the energy and raw materials needed to sustain its economic growth began to grow rapidly, Beijing began looking for alternative sources of supply and land-based transport routes. The BRI was borne out of strategic imperative, an acute sense of vulnerability, and deep mistrust of the West. With time, the BRI acquired characteristics of an international organisation, with a wide variety of committees and sub-committees chaired by different national participants, not only China. Some existing multinational institutions, such as WIPO, also participate in BRI forums.

With these three main institutional pillars – BRICS, AIIB, BRI – Beijing has given structure and definition to an order that stands apart from the US-led liberal order. Commentators, such as C. Raja Mohan, in a recent issue of Foreign Policy, seek to dismiss the BRICS following the Johannesburg summit as being a rag-tag collection of countries that so lacks coherence that it will not be able to function as a ‘bloc’, or that it will amount to no more than a non-aligned talk shop. These dismissive analogies, however, are straw men.

In today’s world system, ‘blocs’ like those of the Cold War are neither sought nor are they feasible. The fact that the newly expanded BRICS is so heterogenous in ideology and alignment to the US or to China demonstrates that. Nor is the BRICS group a mere ‘talking shop’. It has solid institutional structure with the NDB and an existing loan portfolio.

Significantly, and supported by the Bank, BRICS members have agreed to pursue de-dollarisation of an increasing share of their foreign exchange settlements. Most members already conduct a portion of their trade in RMB. This will only expand over time. But this is not just confined to the BRICS. For example, the big iron ore exporters from Australia – BHP, Rio Tinto, and Fortescue – each conduct part of their trade with China in RMB. It of course makes perfect sense because China is the main supplier of much of their equipment.

What the Johannesburg meeting of the BRICS has reinforced is that the international, newly emerged, multipolar system, is also bifurcating into two orders: one around the US-led West and one around China. These are not Cold War like blocs, but alignments of states around respective poles that reflect certain values, and foreign and economic policy orderings. Johannesburg has clearly reinforced these trends in shaping the new world order.

Geoff Raby AO was Australia’s ambassador to China (2007–11); ambassador to APEC (2003–5); and ambassador to the World Trade Organisation (1998–2001). He is former chair of VisAsia at the Art Gallery of NSW and former chair of Western Sydney University’s Australia–China Institute of Arts and Culture. Raby was awarded the Order of Australia in 2019 for services to Australia–China relations and to international trade.

He is an independent company director and author of China’s Grand Strategy and Australia’s Future in the New World Order, MUP, 2020.

Read more here.

Member state warns of 'knockout blow' to EU economy

The EU should pursue cooperation with China and Asia as a whole, which have already become more competitive than the bloc in economic terms. Speaking at an informal meeting of EU trade ministers in Valencia on Friday, Hungarian Foreign Minister Peter Szijjarto emphasised that the global economy has turned upside down over the past few years, resulting in a fall in the bloc’s economic position, which Brussels is making worse with its indiscriminate sanctions policies. He reiterated that recent sanctions against Russia and the drive to abandon Russian energy “shot the European economy first in the foot and then in the knee.”

“Today we pay four times as much for gas in Europe as Americans do at home and three times as much for electricity as people pay in China”

Distancing itself from Russia has already caused problems, doing the same with China would be even more destructive for the EU economy. Szijjarto noted that China has already surpassed the EU in terms of gross domestic product (GDP): its share of global GDP jumped from 9% in 2010 to the current 18%, while the EU’s share dropped from 22% to 17%.

“The overall structure of the world economy is being transformed, and this great transformation also means that the West’s automatic competitive advantage has ended. The Eastern world has strengthened significantly, they have at the very least caught up with the Western world from a financial and technological point of view, while they have always been ahead of us in terms of human resources,”he stated. Szijjarto added that the Eastern and Western economies are more strongly interdependent nowadays than ever before, and said the EU should not shy away from this trend.

“Whether we like it or not, it’s a fact. Whoever denies all this can cause very serious damage to the European economy,” he warned.

Szijjarto noted that the basis of the EU’s economic growth previously lay in the combination of advanced Western technologies and cheap Russian energy, but this line of cooperation has now been severed.

“Unfortunately, there are Western Europeans… who strive to cut off economic cooperation between Europe and China in the same way. If this were to happen, it would practically be a knockout blow to the European economy. That is why we are against any effort to isolate the Chinese and European economies from each other,” he stated.

The minister said the consequences of such actions would be especially felt by the European automotive industry, which relies on Chinese suppliers.

“This would practically suffocate the car industry. And if we strangle the European car industry, we will destroy the European economy,” he declared.

“Everyone in the economy understands this, but Western European politicians don’t want to see the reality, they don’t want to hear the facts, but rather they politicize out of ideology and anger.”

The EU relationship with China has been strained over the past several years, with Brussels viewing Beijing as an economic rival, and each side increasingly unhappy with the other’s policies.

Read more here.

Political prisoner dilemma

By John Cochrane

This is a draft oped. It didn't make it as events in Israel are now consuming attention. But sooner or later we need to elect a president and live with the results. I went light on the economics, but you can see the basic game theory of the analysis. It amplifies some comments I made on Goodfellows.

If Biden wins, Trump supporters will see an official Washington, especially its justice system, enmeshed in presidential politics. They remember Hilary Clinton’s laptop, the Russia collusion hoax, and endless investigations. Now they see sprawling indictments for process and paperwork crimes, that nobody else would be charged for. They see a Washington-media-intelligence cabal censoring news, from censorship of Covid policy dissenters — who turned out to be largely right — to the Hunter Biden laptop story just before the last election. See the scathing Missouri V. Biden. And they see the Family Business. Sure, Biden, like so many in public office who somehow end up with millions in family wealth, likely has enough lawyers and shell companies to avoid provable illegality. But illegality is not the issue. Trump supporters will see the stench of the swamp, secret email accounts, the reins of power covering up the embarrassing facts.

If Trump wins, Democrats will go ballistic. Democrats have refined de-legitimization for decades. Trump’s denialism was almost comical in its incompetent emulation. Recall Bush derangement syndrome, continuing claims that the 2000 election was stolen or decided by a corrupt court; Stacey Abrams, the #resistance, #not my president. But it’s all worse now. Though Democrats express themselves in legalisms, in the end they feel that Trump’s actions after the last election amount to a nearly treasonous violation of his oath of office to defend the Constitution.

(Before you start yelling your side's spin, take a breath. Yes, you see things differently, but how will they see things, no matter you loud you yell? How will they act? That's what matters.)

Our next election is likely to be chaos, enhancing the voices claiming illegitimacy. The election will be close. There will surely be a nationwide legal battle. Every questionable vote, every smudged postmark, every local decision to stretch a ballot deadline, every change in procedures will end up in court. Losing Democrats will cry “racist voter suppression.” Losing Republicans have gotten good at even more fanciful stolen election claims.

If the election is decided by courts, heaven help us. The Democrat’s efforts to de-legitimize the Supreme Court are already well under way. Media now routinely refer to every federal judge by the president that appointed him or her, not, say, by the school they went to or their most famous decisions. Large swaths of the population will tell themselves that the election was stolen.

With No Labels and Kennedy in the fray, it is possible that the election will come down to many ballots in the electoral college. Having tried to de-legitimize Trump for losing the popular vote in 2016, will democrats accept an electoral college result if the popular vote is 40-30-30? Will Republicans? It is possible that the electoral college fails, and the Presidency is decided by the House of Representatives, itself chaotic and under a razor-thin majority. Our Constitution brilliantly prescribes fail-safe procedures to produce a decision. But it only works only if people accept that decision. With so many already opining that the electoral college is an illegitimate anachronism, and with the House in such chaos and low esteem, will losers calmly accept the results of the Constitutional mechanism?

Widely believed, and more widely spun illegitimacy justifies horrendous behavior. You can tell the Jan 6 rioters were play-acting by how unserious they were. People who really believe an election was stolen bring tanks. Widespread violent protests are easy to foresee.

Widely perceived illegitimacy leads to constitutional crisis and chaos. People will simply disregard presidential actions, action by his appointees, and court orders. They will violently resist attempts to enforce government actions.

How do we avoid this mess? There is a lot of hope that one or the other party will blink, and choose a vaguely sensible candidate who will then sweep the general election. But candidates are chosen by primaries, a “democratic” reform we may wish to rethink. (Old men in smoke filled rooms, desiring to win a general election, would never have picked these two.) It’s not so easy.

And even a reasonable candidate will only postpone the deeper question: Why is attacking the legitimacy of elections, institutions, and the courts gaining in strength? It is a scorched earth policy — ruin the institution to gain temporary advantage.

The answer seems clear: The rewards of winning and the costs of losing are now too great. Narrowly, each of Trump and Biden could well end up in jail if he loses, a situation familiar in, say, Pakistan, but so far undreamt of in the US. Avoiding that is worth a lot of scorched earth. More broadly, winning an election now confers the power to rule by executive order. It confers power over administrative fiat, the power to shower billions on supporters, control of the regulatory machine that lines up corporate support, the power to censor the internet, and the power to hound your opponents and their supporters through the intelligence and judicial system. Losing graciously is a less and less viable option.

Democracy isn’t so much about who wins elections. Democracy requires the ability to lose elections, admit the legitimacy of the loss, but live on to regroup and win another day. Only when the power of the winners to impose immense changes with narrow majorities is constrained can losers do that.

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