The world we know is eminently fragile. “The End of the World is Just the Beginning: Mapping the Collapse of Globalisation” is a book about how this fragility will lead to collapse. The book reminds me of “Leading through Disruption: A Changemaker’s Guide to Twenty-First Century Leadership”, but then on steroids. It is all about geopolitics, supply line disruption, fragmentation of globalisation and the consequences of such. The ultimate consequences are war and famine. It is a very bleak book. Everything local is the solution. I suggest you read “Designing Reality: How to Survive and Thrive in the Third Digital Revolution” as an antidote.
Our world is breaking apart
Geopolitically and demographically speaking, we have been living in that perfect moment for most of the last seventy-five years. Since 1945, the world has been the best it has ever been. The best it will ever be. Now, our world is doomed.
Place matters
The book starts by explaining that geography matters. Place matters. Demographics, land, water, energy, wind, minerals and logistics. Place has mattered less since 1945 because the USA took on the role of being the global police agent. Securing the supply lines and securing globalisation. Establishing the Global Order.
The Order
Globalisation was always dependent upon the Americans’ commitment to the global Order, and that Order hasn’t served Americans’ strategic interests since the Berlin Wall fell in 1989. Without the Americans riding herd on everyone, it is only a matter of time before something in East Asia or the Middle East or the Russian periphery (like, I don’t know, say, a war) breaks the global system beyond repair. Assuming that the Americans don’t do it themselves.
Terminal demographics
The author predicts the collapse of China, Japan, Korea, Canada and most of Europe because of demographics alone. Mass retirement and a population crash. He calls it terminal demographics. Remove mass consumption due to demographic collapses, and the entire economic argument for mass integration collapses.
Trade collapse
The second collapse is trade. In a safe, globalised world, such a hybridisation model can limp along so long as the commodities flow out and the money flows in. But in an unsafe, fractured world where trade is sharply circumscribed, outright national collapse will be a problem. For whatever reason, global flows of products and services and energy and foodstuffs are interrupted, the population and political and economic maps will change. Shortage forces people—forces countries—to look after their own needs.
Unravelling
The globalisation game is not simply ending. It is already over. Most countries will never return to the degree of stability or growth they experienced in 2019. Deglobalisation doesn’t simply mean a darker, poorer world, it means something far worse. An unravelling. The word you are looking for to describe this outcome isn’t “deglobalise” or even “deindustrialise,” but instead “decivilise.” A cascade of reinforcing breakdowns that do not simply damage but destroy the bedrock of what makes the modern world function.
The end of more
Everything is going to change. We are entering a period of extreme transformation, with our strategic, political, economic, technological, demographic, and cultural norms all in flux at the same time. The process will be the very definition of traumatic. We face economic free fall as everything that has underpinned humanity’s economic existence since the Renaissance unwinds all at once.
Defensive capabilities will matter
What happens when countries need to secure their resources? Neo-colonies? If you have nuclear weapons, you can defend yourself. If you are an island, you have an advantage. If you have a marine or an army, you have some deterrent. You are at an advantage if you have deep sea harbours and rivers. Moving things overland sucks, and it will become more and more expensive and increasingly risky.
Collapse of supply lines
Transport will also going to take longer. No more, just in time. Long-haul transport is an instant casualty because it doesn’t simply require absolute peace in this or that region; it requires absolute peace in all regions. Such long-haul disruption describes three-quarters of all shipments in energy, manufacturing, and agriculture. Long-haul transport is what brings everything from areas of high supply to high demand, regardless of participant. For any product that is concentrated in terms of supply or demand, expect market collapse. Breaking the economies of scale and supply lines that an interlinked world makes possible will impact everyone, but the unravelling will also impact everyone differently.
Transportation is the connective tissue that holds the world together
Modern manufacturing—especially modern tech manufacturing—can only function in a world where gazillions of intermediate products can frictionlessly scuttle about. Remove the global system, remove global transport, and cities will be responsible for their own food, energy and industrial inputs. If you can no longer transport energy safely and cheaply, a lot of countries will have a problem. So you will find countries such as The United Kingdom, France, Germany, Sweden, and Turkey will all go their own way and attempt to attract and/or coerce select neighbours to come along for the ride.
History repeats
The collapse will feel disturbingly familiar for those who know your Persian, Greek, Roman, Byzantine, Ottoman, German, British, French, medieval, or early industrial histories. What has been new is that the Americans have smothered them. All of them. For decades. Not anymore.
Breaking the links
With the American withdrawal, the various structural, strategic, and economic factors artificially propped up the entire Asian and European systems are ending. It is all going to become stranded. Deglobalisation—whether triggered by the American withdrawal or demographic collapse—will break the supply links
Piracy
Expect state piracy to come back into vogue. Say goodbye to sea-dependent integrated manufacturing supply chains. A return to the days of militarised merchant marines is not far off. Expect a new scramble for Africa.
Financial crisis
The book expects another financial crisis. And if you’re worrying about the collapse of the dollar, you’re not thinking nearly big enough. Financial collapses triggered by countries doing things unwell, unproperly, and unwisely are as common as the stars in the sky. The temptation is to issue more currency without simultaneously securing more assets to back it. The technical term is “debasement.” That works for a while until people stop believing the government line. Currency, after all, is about trust. The best guess is that as of 2022, China’s total outstanding corporate debt has reached 350% of GDP, or some 385 trillion yuan (US$58 trillion). China regularly prints currency at more than double the rate of the United States, sometimes at five times the U.S. rate. It’s no surprise then that the CCP’s preferred method of storing their wealth is in U.S. currency . . . outside of China.
Europe
Europe has thirty different countries with thirty different credit traditions. The truly scary thing is that Europe never recovered from the popping of the euro bubble. The only way to recover from COVID required even more debt—to the tune of another 6.5% of GDP. It is debt that will never be repaid because not only is today’s Europe long past the point of demographic no return, but also, most of the core European countries have already aged into obsolescence, absolutely precluding any of them from returning to the economic status of 2006.
It. Will. Not. Last.
The fiat age has enabled economies large and small, countries near and far, to paper over their problems with cash. And everyone—and I mean everyone—is doing it. Expect to hear a lot about capital flight and capital controls. Inflation will be all over the place. A quick economics lesson: Expect a lot more populism. But more than that, retirees are dependent upon their pensions. Most pension schemes are funded either by tax revenues or by dividends provided by large-scale bond holdings. It. Will. Not. Last.
Oil
The days of reliable, inexpensive oil shipments are coming to an inglorious end. It will be worse than it sounds, and not just at the high-level, this-will-happen-to-that-country sort of way, but instead deeply personally. Oil will be disrupted. That is a problem. Because oil is central to everything from the shingles on your roof to the phone in your hand to the spatula in your kitchen to the pipes and hoses in your plumbing to the diapers on your kid to the paint on your walls to your daily commute to how products cross the ocean. At the moment, there are no credible alternatives to oil. Solar works in some locations but not in others. Zones for which today’s greentech makes both environmental and economic sense comprise less than one-fifth of the land area of the populated continents, most of which is far removed from our major population centres.
Greentech is local
Even in the geographies where greentech works well, it is, at best, only a partial patch. Wind and solar might theoretically be able to replace coal in some specific locations, but electricity of any type is not compatible with existing infrastructure and vehicles that use oil-derived liquid fuels.
Capacity
Switching all transport from internal combustion to electric would necessitate a doubling of humanity’s capacity to generate electricity. You now need absolutely massive transmission capacity to link the locations where wind and solar systems can generate power to where that power would ultimately be consumed. The practical aspects of a potential switchover are beyond Herculean, both in terms of technical challenges and cost, and I am not talking about the relatively simple task of installing enough solar panels and wind turbines to generate 43,000 terawatt-hours of electricity, roughly seventy times the total GreenTech buildout of 2010 through 2021.
Batteries
Batteries are dependent on minerals and supply chains. Today’s lithium supply chains require unimpeded access to Australia, Chile, China, and Japan. That’s a bit simpler than oil, but not by all that much. A megawatt of electricity-generating capacity for a megawatt of electricity-generating capacity, greentech requires two to five times the copper and chromium of more traditional methods of generating power, as well as a host of other materials that do not feature at all in our current power plant inputs: most notably manganese, zinc, graphite, and silicon.
Industrial materials
The list of “essential” materials has expanded exponentially since 1945. Iron ore, bauxite, cobalt, lithium, silver, gold, lead, platinum, nickel. silicon, uranium, zinc, etc. In the Order, the only competition over material access was over market access. Invading countries for raw materials was expressly forbidden. You simply had to pay for them. Capital-rich systems, therefore, enjoyed the best access. Without the rules and constraints of The Order in place, money on its own just isn’t going to cut it. Without the Order, it all unwinds. That is far worse than it sounds.
No more access
With the exception of the United States, which will retain full access to the Western Hemisphere and Australia, as well as the military capacity to reach anywhere in the world, no one will be able to access all the necessary materials. They are simply too scattered or too concentrated. If you lack the industrial inputs, you cannot achieve industrial outcomes.
Complex supply lines are doomed
The Industrial Revolution brought us precision manufacturing. All are dependent on global supply lines. The longer and more complex the supply chain, the more likely it is to face a catastrophic, irrecoverable breakdown. The longer the shipping route and the more players that lie along any particular route, the more deals that need to be cut and the more opportunity for interruption. The route from Shanghai to Hamburg is a breezy 12,000 nautical miles. The single biggest piece of international manufacturing trade is automotive. All those 30,000 parts per vehicle have their own supply chains. The average computer has ten thousand pieces, some of which are made of hundreds of components. Each fractured piece of the world will need to look to its own internal manufacturing system, and many will lack the capacity. The new systems will put premiums on simplicity and security just as the old system puts premiums on cost and efficiency. Each fractured piece of the world will need to look to its own internal manufacturing system, and many will lack the capacity. For example., with the fall of Asia Inc., expect the world of semiconductors to look very different. Fabricating semiconductors is an exceedingly difficult, expensive, exacting, and—above all—concentrated process.
No more economy of scale
Mass-production assembly lines will be largely out. Mass production of any type requires massive economies of scale. Reducing economies of scale reduces the opportunities for automation. The pace of technological improvement in manufacturing will slow. Supply chains will be much shorter. In a disconnected world, any point of exposure is a failure point, and any manufacturing system that cannot snuff out its complexity will not survive. Production will become colocated with consumption.
Cost
A 1% increase in the cost of a subsidiary part largely obliterates the economics of an existing supply chain. Most locations will count themselves fortunate if their transport costs increase by only one 100%. Changes in transport, finance, energy, and access to industrial inputs will make it poorer and more fractured and will dial back much of the progress we’ve come to associate with the modern era.
Agriculture
If there isn’t enough to eat, you die. Your neighbors die. Everyone in your town dies. Your country dies. If the food supply system breaks down for any reason, you cannot simply manufacture more. Nor can everyone play. One of the most difficult-to-move bulk products is water.
No more food security
The Order, combined with the dissemination of industrial technologies, has shifted 3 billion people from living on the razor’s edge to being food-secure. The Order’s encouragement of economies of scale means every patch of land and microclimate tends to produce the single thing it does best, as prompted by the needs of a fully unified global market. Egypt grows cotton and citrus for export rather than wheat for local consumption. This banishing of wheat to the periphery means the bulk of the world’s wheat is grown in just a handful of places. Entire countries using modern agricultural technologies and markets to pull themselves out of the preindustrial age will fall backwards into the preindustrial past. At preindustrial population levels.
Specialised equipment
Larger farms mean larger, more specialised equipment. Specialised equipment means specialised manufacturing supply chains. And specialised supply chains are woefully vulnerable to disruption. Any disruption will have devastating knock-on effects up and down the supply systems, indeed all the way to the dinner table. Every soil type—every crop—demands not only different amounts of fertiliser but different types as well.
The geopolitics
Russia will use this food “diplomacy” to help consolidate control over Mongolia, Tajikistan, Turkmenistan, and Kyrgyzstan. Hyper food-secure France is going to get all neocolonial. Paris will establish a suzerain relationship with Belgium, will attempt one with Switzerland, and will firm up links with a willing Morocco and Tunisia and an unwilling Algeria. India will spend some food to own Bangladesh, which will find itself in the worst of all worlds. Nigeria, the only African nation that can maintain its agricultural output without extensive outside assistance, will establish a sphere of influence that includes Equatorial Guinea, Cameroon, Chad, Niger, Burkina Faso, Ghana, Togo, and Benin.
Famine
As for the rest, there just won’t be enough food to go around. There will be no shortage of famines in the post-Order world. Likely, in excess of 1 billion people will starve to death, and another billion will suffer chronic malnutrition. Some two-thirds of China’s population faces one of those two fates.
Will technology solve the problems?
The author mentions a few technologies that might help, but the short answer is “no”. Genomics and precision farming need scale, which will be difficult at a local level. The second way of mitigating famine is to grow products more in line with local, rather than global, demand. Large-scale, export-driven monoculture will give way to small-scale, local-driven polyculture. Wide-scale wheat, augmented by climatically dictated staples such as oats, barley, and rye in cooler climates and cassava in the tropics, is the wave of the future. That is a recipe for gross rural poverty. Removing monoculture reduces economies of scale. And you can forget about eating meat.
Climate change
Finally, there is climate change. A temperature difference of only a few degrees will change humidity patterns by only a few percentage points. That doesn’t seem like much. It isn’t much. But remember, we’re also dealing with a world in which transport and supply chains will be weakening or, in some places, breaking completely.
Warming
The world is warming unevenly, with the poles heating at roughly triple the rate of the tropics. Changing rainfall patterns impact water flows, especially when those water flows have already been impinged upon by human activity. The areas that will suffer the most significant impact on agricultural capacity will be those that were already marginal: arid but not desert, hot and wet but still serviceable. That, unfortunately, represents a ginormous proportion of the Earth’s surface.
The end of the world
The same webwork of sacrosanct interconnections that has brought us everything from quick mortgages to smartphones to on-demand electricity has not only also filled 8 billion bellies, it has done so with the odd out-of-season avocado. That’s now largely behind us. More than war, more than disease, famine is the ultimate country killer. The history of the next fifty years will be the story of how we deal with—or fail to deal with—the coming food shortages.
