Life After NATO

For all intents and purposes, the North Atlantic Treaty Organization – the foundation for American security for the past seven decades – ceased existing on May 25, 2017.

While attending a highly anticipated (some might say dreaded) meeting with NATO heads of state and government in Brussels, U.S. President Donald Trump delivered a speech railing against member-states who have failed to meet economic obligations to the defense pact, going so far as to indirectly abrogate the alliance’s cornerstone: the provisions for collective defense under Article V of the treaty.

Article V is the backbone of the NATO alliance: that an attack against any individual member will be treated as an attack against all members, and will be met with a requisite response. Article V is perhaps the biggest piece of what incentivized the Europeans to resist Moscow throughout the nuclear-tinged threat of the Cold War era. But after the fall of the Soviet Union in 1991, the Europeans steadily gutted their militaries, redirecting funds to ballooning social programs and pensions.

I cannot emphasize enough that while the breach between the United States and the rest of NATO is happening on the Trump administration’s watch, this is not a position that will change once Trump is gone.

After the 9/11 attacks, the Bush administration made it clear to the NATO allies that future relations would be viewed through the prism of cooperation on anti-terror programs. In response the French and Germans partnered with the Russians to oppose the Iraq War. During the first Obama administration, the White House explicitly asked NATO to increase its troop commitments to the Afghan conflict to prevent the Taliban’s re-emergence. With a very few exceptions the European allies didn’t just fail to provide, they rejected Obama’s request with fanfare.

I’m not asserting the Americans’ wars were smart plays, or that the link between anti-terror programs and other aspects of strategic policy is what I would have done. I’m saying that the American complaint that the European allies are not carrying their weight – and that there is an explicit link in the American mind between anti-terror support and ongoing NATO security guarantees – is neither new, nor a surprise, nor merely the position of a political outsider like Trump. This is policy. This is bipartisan. This is done.

And holy crap does that throw a lot of things up in the air!

So what does life after NATO look like?

  • United States. Freed from needing to maintain static deployments throughout Europe or from preparing for mass Army deployments to the Continent, and freed from needing to be responsible for global security in general, the United States can revert to their pre-World War II strategic posture: one of permanent offense. Few troops manning front lines. Little need to rush to the aid of every country on the planet. Yet boasting a military capable of intervening anywhere, anywhen. For the roughly 4.5 billion people on this planet whose physical and economic security was dependent upon active, constructive American engagement, an America that is a persistent wild card is quite possibly the worst outcome of all. And what does the U.S. need to put into place to make this happen? Not a damn thing.
  • United Kingdom. Theresa May has already struck a deal with the Trump administration to more closely coordinate strategic policy. This wasn’t done because of NATO’s imminent end, but because of Brexit. The Brits leaving the EU means they need to massively increase the size of their diplomatic and intelligence operations. May offered to trade the information such operations generate for a closer alignment with the Americans. From the point of view of the London-Washington alliance, the hard work has already been done.
  • Russia. Moscow has been praying for a breach between the Americans and the Europeans for decades, and the day has finally arrived. Not a moment too soon either. The Russian demography is in terminal decline and the country will largely lose the ability to field a credible army in just a few years. Russia’s current borders are completely indefensible with its current military, much less a smaller one, so Moscow believes it must expand to something more closely resembling the old Soviet borders. This will bring it into conflict with eleven different countries, five of which are standing NATO members. The one country that could have stopped a Russian assault? The United States. Expect Russian operations within, against and beyond Ukraine to accelerate now that the Americans are no longer a major factor.
  • Poland and Romania. Warsaw and Bucharest are, well, screwed. Poland and Romania are two of the five countries that the Russians feel they must at least partially secure. Neither have a hope of fighting off the Russians without massive amounts of outside assistance, and with the Americans exiting stage west they will be forced to turn to local powers – powers with which both have less than ideal relations.
  • Germany. There is zero hope for Poland without tens of thousands of German troops fighting on Polish soil. Considering that currently Germany doesn’t have tens of thousands of deployable troops, and even if they did, historically German troops haven’t tended to leave Poland after being there, and Warsaw-Berlin relations are about to become dizzyingly complicated. Every time the Germans have armed, the result has been a broad-spectrum European war. It is far too soon to call that inevitable, but unless the Germans prove comfortable with Russian troops within a couple hundred miles of Berlin, the era of German pacifism is nearly over.

  • Turkey. The Turks have been de facto out of NATO for over a decade, following a breach in relations with the George W Bush administration in the run-up to the Iraq war. Now, how much progress the Russians make in the Balkans and Caucasus is largely up to politics in Ankara. Figuring out the specific path forward is an exercise in futility. Not only are the Turks only now waking up from a century long geopolitical coma and they have yet to figure out what about their neighborhood really matters to them, Prime Minister Erdogan is cut from the same nationalistic, populist cloth as the American, Polish and Russian presidents. But whatever happens, relations with the Germans will be key. Germany and Turkey are the only countries in Europe that have the potential manpower to hold off, much less roll back, a Russian advance…and the two are currently in a spat that is dangerously close to severing formal diplomatic relations.
  • Sweden. The final three NATO countries the Russians will target are the Baltic Trio of Estonia, Latvia and Lithuania. All three Baltic states count Sweden as their strongest and most enthusiastic sponsor. Sweden now has a choice to make. Continue with its policy of neutrality and watch its Baltic apprentices die, or act. Sweden has the military, economic and diplomatic strength to forge and lead a Scandinavian alliance to bulwark the Balts against the Russians. Now we’ll see if they have the will.
  • Japan. Shinzo Abe was the first foreign leader to visit Trump after his election (and then the second one, after May, to visit after inauguration), and he came with a big fat bribe. Abe knows that Japan is likely to find itself in a full-court conflict with China in the not-too-distant future and needs to be sure the Americans will at a minimum remain neutral. Assuming no American-Japanese hostilities (and the bribe seems to have done the trick), Japan is highly likely to give the Chinese a drumming. The Chinese are more dependent upon maritime supply lines for both merchandise exports and energy imports, while the Japanese navy has longer reach and less strategic exposure. And now that Japan’s second new carrier is fully operational, the Japanese are pretty much good to go.
  • China. For Beijing the Americans leaving NATO is quite possibly the worst outcome of all. If the Americans are not nailed down defending a long land border in Europe, American power becomes far more freeform. That hugely expands the role of the American Navy in American strategic planning, and the Navy is the branch most capable of containing Chinese power. Even if American relations with Japan were to significantly cool, China just became completely boxed in.

One final thought:

We have not had large-scale regional – much less global – competition outside of the American-Soviet rivalry for 70 years expressly because the Americans took care of pretty much everything. But the Americans have been moving slow-motion in the general direction of disengagement from their Cold War alliance system since 1989. Today’s developments are not the final word on that disengagement, this is simply the end of the interim where people didn’t really know where the Americans stood. We are only now starting to understand the degree to which the Americans just are not going to be there.

Remove the Americans and every country in the world – starting with the European nations – needs to figure out how to look after their own economic and physical security. Different countries will have different ideas of how to do that, and many of those ideas will be mutually exclusive. History is about to start moving again.

And history is bloody.

Should you find any of this interesting (or terrifying) you can read more at the link to the archive at the top of this email. And in a shameless plug, my newest book – The Absent Superpower – has a full chapter on the coming war between Russia and the Europeans.

The Left Leaves

A terror attack in the United Kingdom May 23 killed at least 22, and injured dozens more. As the attack targeted a youth pop concert, a high proportion of the deaths were among children and teenagers. United Kingdom Prime Minister Theresa May immediately cancelled all her ruling Tory Party’s campaign events — national elections are June 8 — so her government could focus on the crisis. The country’s other parties quickly followed suit.

As of yesterday, the Tories had this election locked up to the degree that a generational shift in UK politics was in the offing. If the polls are accurate, the Tories would have eaten deeply into the holdings of other parties not just in England, but in Wales and Scotland as well. Ongoing Brexit talks have justified and energized the Brits separate-and-superior mindset, and Theresa May has been using that energy to reshape the UK political space. That means, among other things, the British Labour party moving into the political wilderness, the de facto absorption of the anti-EU UK Independence party into the Tories, the Liberal Democrats’ return to the fringes of British power, and the evisceration of the Scottish National Party’s stronghold on Scottish politics and an end (for now) of talk of Scottish independence.

That was before the attack.

Between the rally-round-the-flag effect of terror attacks and the fact that the ruling Tories are the law-and-order party, the UK is now on the cusp of a complete overhaul. Barring some truly unprecedented revelations that bring down May and the entirety of the Conservative leadership, the Tories will walk away from the June elections with the strongest showing of perhaps the last century. In the election’s wake, Labour will not simply be weak, it will be gone and it is unlikely to come back in a meaningful way.

What’s going on in the United Kingdom is hardly unique; Center-left parties are collapsing across the developed world. It is a symptom of a wider change in the way we all live.

Contemporary political systems are an outgrowth of the economic structures established by the industrial revolutions of the 18th and 19th centuries.

Before those economic revolutions the world was a constellation of fairly small places. Low-output per hour of work in agriculture forced most of the population to be farmers. Life before semis and railroads and globalized supply chains meant that foodstuffs needed to be lugged around by horse and backpack. Cities — places where you could not grow your own food — were small as well as, well, revolting. Cram a bunch of people in a small space with no running water or plumbing, make them dependent upon food that has to be carried in from somewhere else, and things get gross and violent pretty quickly. In such a world, there weren’t a lot of mass-mobilization politics. Either you were a landowner or other flavor of aristocrat who ruled, or you were a pleb who didn’t get a vote.

The First Industrial Revolution of roughly 1760 to 1820 upended that system. The introduction of mechanized energy such as steam engines enabled us to shift from producing goods by hands to producing them with machines. Such mass outputs increased worker efficiency while concentrating the geography of production. The result was mass urbanization and mass worker concentration. Within a few decades these economic evolutions shifted the balances of power. The “Left” catered to those who provided the labor in the new order, while the “Right” represented those who controlled the land and capital. There are many different ways to categories the Left and the Right, but the transition to industrialization is where the political cleavages in the modern world started, and have remained the most powerful delineating factor in Western politics ever since.

Plenty of folks vested in the pre-industrial order fought tooth and nail against the emerging political landscape, but they faced two insurmountable challenges. First, the winds of history were blowing and you cannot un-invent technology without removing the bedrock of the civilization that supports it (i.e. devolution into anarchy). As the new Lefters and Righters gained power, these older groups fought back. Political instability and even revolutions were the rules of the day. And even when the old-order folks won, its isn’t like their areas suddenly de-industrialized. New challenges arose the very next day until all the old world was swept away.

Second, there was a new country on the scene that had the gall to let the people decide who would be in charge. Those pesky Americans devised a political system — democracy — that was (quite accidentally) able to reshape itself, contain and ultimately harness the new economic-political lines of identification. Democracy quickly became a way to accelerate the shift from the old world of aristocrats, plutocrats and royals to a newer system with a deep economic rationale that enjoyed broader support.

The Second Industrial Revolution of 1860 to 1945 was the equivalent of rocket fuel in a station wagon. Machine tools gave way to assembly lines. Coal gave way to diesel and gasoline. Railways, telegraphs and ocean-going fuel-burning cargo ships took over global commerce. Many of the new developments — in transport, medicine and sanitation — were expressly designed to counter some of the more disgusting aspects of early industrialization. Antibiotics, sewers, electricity and new distribution techs didn’t just make cities bigger, but also removed some of the features that made them death traps when compared to the countryside — accelerating urbanization. The countryside, where Left-Right classifications weren’t entirely appropriate, became systematically less important as populations en masse shifted into the urban worker-capital categories.

This broad system of political alignment then held until about ten years ago.

The financial crisis of 2008 was a watershed because it seized up traditional capital markets. That disruption damaged everything that the economic structures of the industrial revolution sustained: life-long careers (and even jobs), labor unions, traditional manufacturing, employment patterns…and the Left-Right split that represented all those things in the political arena. The 2008 crisis occurred just as computerization was really hitting its stride, and the link between capital and capital-owners has blurred. Unequally distributed wealth isn’t the point — it is that capital is no longer linked at the hip to organized industry. Capital is now free-flowing. It goes to any place in any industry in any volume based on what looks promising.

That is exciting, but it is also disruptive. Less Walmart, more Amazon. Fewer assembly lines, more 3D printing machine shops. Fewer accountants, more TurboTax. Fewer unions, more Uber. Fewer financial firms and more AI-driven stock trading. Fewer supermajors and more tiny firms using infotech to wrestle oil out of shale formations. Fewer landlines and all the labor and mammoth companies that go along with them, more iPhones that just require the odd cell tower. We are now in a Digital Revolution that is redefining the relationship between labor and capital. Sure, it means that you can do more with less and have fancy gadgets, but it also means that anyone who had a stake in the old system — whether a line worker or a bank teller or a secretary or a stock broker or a roughneck — has to abandon not just their job, but their career. And that has political consequences.

The new technologies are far less labor intensive — meaning fewer workers. The new technologies have far lower barriers to entry, so there is no monolithic employer — meaning no unions to support, and no employer to bargain with or fight against. The traditional “Left” just doesn’t fit in the world rapidly unfolding, and so it is collapsing. Everywhere.

  • In the United States the populist uprising that elected Donald Trump is a textbook case of how economic evolution shapes political choice. Line workers — even union workers — deserted the Democrats en masse for Trump. What’s left of the Democrats — and they’ve lost over 1000 elected positions at state and national level since 2008 — is now incapable of taking any stance save a general opposition to all things Trump. That’s not enough to hold, and they face a generational wipeout in the 2018 by-elections that is likely to hand the Republicans their strongest Congressional majority in decades.
  • French presidential elections in May eradicated the ruling Socialists. Their candidate didn’t only not make it to the second voting round, he only garnered an 6% share of the first-round vote. Parliamentary elections in June may well reduce them from the dominant party in the National Assembly to the fourth-largest.
  • The European financial crisis has gutted the political stability of Europe’s peripheral countries. Greece is ruled by the nationalist-communists. Italy will likely have a comedian as prime minister by year’s-end. The Spanish Left is being displaced by a party that takes its developmental cues from Greece.
  • In Israel the economic shift has been so holistic that it has nearly banished the Israeli Labor party — the party that founded Israel — from the Knesset.

The only significant country where the Left is holding any ground is Germany, a country artificially re-constructed after World War II to have a very specific — and durable — political system. And even there the Social Democrats are on course to lose their fourth consecutive election this fall. (Yes, the center-left actually rules Canada — the only place of note that it still does. but Canada both lives in strategic nirvana and is disastrously complicated from a domestic political organizational point of view so I’d not draw too many lessons from the Great White North.)

What’s left of the economic Left is being subsumed by populism, a movement that broadly speaking is unhappy with the current state of affairs, thinks that everyone is out to get them, wants change, wants it now, and wants to use a mass government overhaul in order to force the issue (in the 1930s we would have called this national-socialism). Populism has managed to capture much of the Left’s thunder in a wide variety of countries including — but hardly limited to — Hungary, Poland, Austria, Finland, Israel, France, Italy, the Netherlands and Turkey. Yes, Trump is a symptom of the Populist rise. But so too are Bernie Sanders and Elizabeth Warren. (There are many types of populists. None have ever ended up delivering what they promise.)

It is tempting to say that politics is cyclical and the Left will recover, or that it botched the chance to rule in the past two decades and it just needs a little time in the wilderness to reconnect to its roots, or that the Left can embrace other issues like identity politics and social issues to reinvigorate itself. But that misses the point. The economic Left has lost power everywhere. The grab bag that remains is important and will obviously color political and social evolutions, but it cannot define the era. Such awkward coalitions can garner votes, but not in the quantities sufficient to govern. The term “Left” itself may be appropriated by new and varied causes — the most likely is to support the coalition of those devastated by Apple, Amazon, Uber and the rest — but those are not workers, but instead the opposite. The rubric that has defined the Left for nearly two centuries is gone.

And before those of you on the Right get too excited, just because the Left disappears doesn’t mean the Right wins. The Left is not alone in dissolving into the Digital Revolution. The Right as we understand the term is finished too. Trump won by running against the Republicans. May is in charge in the UK because the traditional Right collapsed in the Brexit vote. France’s Right is in just as much trouble as the French Socialists. The Right parties of Poland, Israel, Austria and Japan are now more nationalist and/or populist than that the classical Right in the labor-capital divide.

It is about to get a whole lot worse. As the global demographic flips into mass retirement around 2022, the availability of capital that has made the Digital Revolution so broad and deep will drastically shrink. Currently, changes in capital allocation are breaking down our “normal” Left-Right political systems, but the Digital Revolution’s advances at least maintaining an economic structure. Remove all the capital that makes the Digital Revolution possible and we’re in for a world of hurt…with populism the only political movement that has traction.

The last time our economic-political systems faced this much evolution and upheaval, the disruption lasted over a century and culminated in the world wars. The issue is that you can’t have normal political parties unless you have a grand vision, and you can’t form a grand vision unless you understand the rules of the game. As the developed world moves into a post-industrial economic system — and one in which the global population structure shifts from young, working tax-payers to retirees — we don’t know what those rules are. And until we do, we cannot begin process of exploring how to rule ourselves.

France Dodges a Bullet…By Catching a Bullet

The results are in:

Emmanuel Macron defeated Marine Le Pen of the National Front by 66% to 34%, making him the youngest president in French history.

Many were worried about the implications of a Le Pen presidency as the right-wing, pseudo-racist, anti-European populist has called bluntly for an immigration ban, a withdrawal from the euro and EU, the severing of most economic connections with the wider world, and a general break with the whole French system since World War II.

But while there were admittedly a couple of big gulp moments during the campaign, I wasn’t ever really that worried about such an outcome. France’s pro-European instincts are still pretty strong, and the French political center is robust as well. As soon as it became apparent that the center-right wasn’t going to go down the rabbit-hole, I was pretty sure that Le Pen didn’t have a serious chance. The bullet would be dodged.

Which isn’t the same as me saying that all is good in the state of France.

Just because the center remains strong in the French electorate doesn’t mean it remains strong in the French political system. In the first of France’s presidential election’s two rounds, the two parties that have ruled France since the formation of the Fifth Republic only scraped together 26% of the vote between them. And Marine Le Pen increased her father’s share of the vote – when he made the second round a decade ago – by half.

So should the French be congratulated, even celebrated, for their election results? Sure. But let’s not get ahead of ourselves. All the trends in play that enabled the National Front to so hugely improve its vote take remain fully in force, and all will push France in a much darker direction in the months and years to come.

Automation at home and abroad continues to erode the earning power and job prospects of French workers. So long as the global trade system and EU survive, the French system’s lack of competitiveness continues to hollow out the French economy. France’s vulnerability to energy shocks continues to deepen.
Europe’s sovereign debt crisis is loads worse than it was in 2007, and continues to sap economic activity in France’s Spanish and Italian neighbors. Inward immigration from France’s colonial legacies continues to flow as those former colonies face issues of systemic collapse. Germany remains shielded from the worst of most of this, and so long as it is the heart of the EU not just geographically, but also economically, financially and politically it will continue to ascend at France’s expense. France is trapped in a system it cannot control and that system is in terminal decline. I’d be scared and angry too.

And let’s not understate the challenge the new president faces. The entirety – yes, the entirety – of the parliament is made up of parties that were just wholly discredited on the national scene. The new president doesn’t have a single legislator in office. The comparison is imperfect, but can you imagine if Donald Trump ran on a third-party ticket to become president? How do you think the Democrats and Republicans would treat his priorities when they hold all the legislative cards?

Sure Macron can try to capture the French imagination (and some seats) in the June parliamentary elections, but so too can Le Pen. And now that one-third of the French electorate has broken the seal and voted for the National Front, it is highly likely that Le Pen’s (massively) more organized and institutionalized party will do just as well as Macron’s neophyte on-a-shoestring En Marche. When we get to the next presidential election, France is likely to have a president with few successes, an ossified and discredited center-left and center-right, and a National Front that has racked up dozens of electoral successes in both national and regional bodies.

Doesn’t take a pessimist to guess how that will turn out.