A Failure of Leadership, Part I: A Look Around the World

Read Part 2 and Part 3

The past few weeks have been…eventful. I make my living anticipating and explaining and projecting change, with an unfortunate emphasis on destabilizing and disintegrative change. Pre-coronavirus the world was already hurtling through its most rapid breakdown in living memory; Coronavirus has accelerated…everything.
 
Times of extreme change are often painful, but for many they provide opportunity. Leaders often shine during times of extreme change. History tends to remember people who help their people and institutions navigate periods of disruption. Reagan’s speech at the Berlin Wall ended the Cold War. Yeltsin standing on a tank, defying the military put a bullet in the Soviet brain. Meir launching a worldwide assassination program made tiny Israel a global power. Churchill pledging to never surrender set the stage for the Nazi defeat. Ataturk defying Europe’s post-WWI carve-up plans ensured that, eventually, the Turks would return as a major power. In moments like these, a few countries pull away from the pack and reinvent themselves.
 
I haven’t seen any of that so far in the coronavirus crisis. Anywhere. Honestly, it is a little disappointing that no world leaders are rising to the challenge. While some leaders have dealt with the crisis competently, I haven’t seen any effort by any leader to harness the crisis to put their country on a more solid footing or to prepare for the post-COVID future. The lack of global leadership effort is simply mindboggling.
 
Let’s run through the list:
 
Emmanuel Macron has hitched his star to the idea that EU countries with solid budgets (that is, the countries less spendthrift than France) should shell out more money to help the poorer countries (that is, countries like France) get by. That certainly generates him some gravitas in Rome and Lisbon, but personifying the concept of asking for a hand-out isn’t what leadership looks like.
 
Germany’s Angela Merkel was supposed to be retired by now. Her chosen successor stepped back in early February, just before we all became obsessed with coronavirus. With her retirement plan in tatters, the Indispensable European is now once more unto the breach, dealing with intractable issues in her quiet, competent way. Unfortunately, she is constrained by her country’s savings-obsessed culture. No one in Germany wants to bail out Europe’s weaker members, particularly since Germany’s forward-looking, keep-your-powder-dry medical and financial approach has (so far) proven successful while Southern Europe’s spend-it-even-if-you-haven’t-got-it mindset has not. Honestly, Merkel looks like she’s just tired of it all. I feel exhausted just reading about her. (And frankly, she should be tired. She’s been shoveling Europe’s shit for over a decade.)
 
Even if everyone loved Brexit and how Prime Minister Boris Johnson has handled it, Johnson just now emerged from some quality time in a freaking COVID ward (just in time to bring his new baby home). The UK in general – and Johnson in particular – is in no shape to lead much of anything.

The orders to tamp down any discussion of coronavirus in Japan in order to maximize the chance of the 2020 Summer Olympics being derailed undoubtedly came from the top, making Prime Minister Shinzo Abe directly culpable in a spreading epidemic in the world’s oldest national demographic. Needless to say, few are looking to Tokyo for a how-to guide.
 
Canada’s Justin Trudeau has the look of a man who has been completely overtaken by events…because he has been. That’s less a judgment of his leadership or his team’s management skills, and more the crystallizing realization in Canada that there is no future for Canada unless it does everything of substance hand-in-glove with the United States. That includes trade policy and energy policy and China policy and…anti-COVID efforts. Trudeau has been (repeatedly) blindsided by whatever fresh spasms of oddity have erupted from the White House, and he simply has no option but to make the best of it. Pragmatic? Yes. Necessary? Certainly. But the liberal flame has most certainly gutted out.
 
Russia’s Vladimir Putin proudly proclaimed Russia had COVID “under control” just ten days before the Moscow mayor launched a lock down. There’s been broad spectrum public criticism by health care workers of the Russian government’s (mis)management of the epidemic, that has progressed to several doctors committing suicide by jumping out of buildings (a favorite technique of the Russian security services for disposing of troublesome personalities). This would be bad enough at any time, but Russia’s educational system collapse in the 1990s means Russia doesn’t have a particularly deep bench of health care staffers. COVID combined with the government’s response to the bad PR coming out of the health care sector is gutting what’s left of an already woefully inadequate health care infrastructure. Needless to say, while many countries want to manage the message, no one else is liquidating their precious health care workers to do so. (And incidentally, the Russian bot farms are hard at work spreading bat-shit crazy COVID-related conspiracy theories so please quit getting your COVID news from Facebook.)
 
Not to be left out, most of the world’s secondary powers have slightly wacky nationalist leaders who are proving…wackier with every passing day.
 
India’s Modi is working diligently to disenfranchise a large portion of his own population, and seems genuinely surprised when there is (violent) push back.
Turkey’s Erdogan is gayly skipping his way down a neofascist path, setting the stage for (another) harsh, ethnic-based, wipe-out of a conflict with the Arabs to the south, the Europeans to the northwest, and the Russians to the northeast.
Brazil’s Bolsonaro seems committed to ensuring the epidemic hits his country as hard as possible, in part by personally leading press-the-flesh rallies against COVID-containment and mitigation efforts.
Mexico’s Andres Manuel Lopez Obrador is nearly as obtuse on the topic of the virus as Bolsonaro. Moreover, he has decided against providing much of any support to Mexican firms during the crisis, ensuring that Mexico’s recession will be longer and more difficult than it needed to be.
 
The number of leaders who have risen to the occasion is vanishingly small. Korea’s Moon Jae-in and Taiwan’s Tsai Ing-wen have done a phenomenal job of managing the COVID epidemic, but much of the credit must go to those countries’ intelligence and diplomatic corps who are arguably the most attuned to regional disruptions. After all, for them threat detection/assessment is a matter of day-to-day survival, and their hawklike watching of China is what provided their countries’ health services with the advance warning the situation necessitated.
 
Honestly, the only leader who has truly outperformed is Prime Minister Jacinda Ardern of New Zealand. But while Ms Ardern continues to impress, her country’s geographic isolation grants the Kiwis virus containment/limitation options denied the rest of humanity. There are a few lessons there for others, but only a few. Yet even with these three bright spots, no one outside of their respective countries is looking to Moon or Tsai or Ardern for leadership.
 
That holds true pretty much everywhere. With the possible exception of Angela Merkel, not many people have looked to any of these leaders to be authorities on regional issues, much less global ones…ever. Part and parcel of true global leadership is that there can really only be one. Since the Americans for the past 70 years have provided the security architecture and economic capacity for a global system to exist, it has fallen to the man in the White House to design the response, set the course, provide the resources and, to be blunt, lead. That’s triply true in the case of the meaningful international institutions which provide the sinew of global cooperation.

Those days are over.
 
Since his election, Donald Trump has functionally ended NATO, eliminating the single greatest security alliance in human history. Last year the Trump administration functionally destroyed the World Trade Organization, the only institution capable of empowering the multilateral trading system. Last month the Trump administration ended American funding for the World Health Organization. A flawed institution? Sure. But to abandon it during a pandemic was, in a word, questionable. The American alliance with South Korea – long one of America’s three most loyal allies – is likely to end this year at Trump’s behest. TeamTrump is even drawing up plans to pull intelligence assets out of the United Kingdom, America’s oldest, closest, and most capable ally, in protest over the Kingdom’s Huawei-linked telecoms policy.
 
It doesn’t really matter whether you think Trump’s actions are warranted or otherwise. The point is that the United States de facto controlled these institutions and alliances. By leaving or killing them while simultaneously failing to establish domestically-run alternatives, Trump has vastly reduced the ability of the United States to manipulate the world. That isn’t leadership. That is abdication.
 
Nor is it purely an international question. Domestically, Trump is a standout in that the longer he is in the White House, the less competent he appears to be at using the tools of domestic power.
 
I’m not talking here about Trump’s politics, policies, or even personality, but about his gob-smacking lack of managerial skills. Nearly three and a half years into his term, there are still hundreds of positions throughout the federal bureaucracy which remain unfilled, a disturbing number of which deal with issues of health. Headless bureaucracies are broadly useless except to carry out the last orders that they were given. It is with more than a touch of irony that I must note that despite all sound and fury to the contrary, Trump’s pathological unwillingness to engage with the federal bureaucracies has actually entrenched Obama’s regulatory disfunction rather than excised it.
 
Nor has much of what Trump has done trimmed those bureaucracies down to size. After all, reducing staff and mandates and budgetary outlays takes active leadership, and Trump is one singularly disinterested and disengaged leader. Since Trump hasn’t disbanded the agencies or programs, America has been landed with all the expenses of a sprawling bureaucracy, but few of the benefits.
 
Add in daily COVID briefings in which Trump seems pathologically committed to showcasing his furiously deliberate lack of knowledge, and Trump’s levels of respect at home and abroad are at the lowest of his presidency – and trending very firmly down. Imagine how weak he will look in a few months (weeks?) when the United States experiences its second coronavirus wave.
 
Absent from this list of not-necessarily-failed-but-certainly-not-successful leaders is, of course, China’s Chairman Xi Jinping. Understanding just how disastrously Xi has mismanaged the coronavirus crisis and just how much permanent, irrevocable damage his “leadership” is causing China requires an entirely independent newsletter.
 
Stay tuned for Part II…

With the world under COVID-related lockdowns, I’m pretty much as home-bound as everyone else. That’s nudged me to launch video conferences for interested parties on topics ranging from food safety to energy markets to the nature of the epidemic in the developing world. While most of these events are for a set fee, my next video conference will be free of charge. Space, however, will be limited.
 
Join me May 19 for a once around the world of where we stand in the current crisis. Which countries are suffering most critically? Which are pulling ahead? What the shape of the pandemic will be in the weeks and months to come? What will the world look like once coronavirus is in our collective rear-view mirror? As with all the video conferences, attendees will have the opportunity to submit questions during the event.

REGISTER HERE

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The Cutting Room Files, Part 4: The Future of Japan

Read the other installments in this series:
 
The CRF Files, Introduction
CRF Files, Part I: The Future of Korea
The Cutting Room Files, Part 2: The Future of Mexico
The Cutting Room Files, Part 3: The Future of Canada
The Cutting Room Files, Part 5: The Future of the United Kingdom
The Cutting Room Files, Part 6: The Future of China
The Cutting Room Files, Part 7: Europe
The Cutting Room Files, Part 8: American Politics

This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now onAmazon.com, Harper Collins, and IndieBound.

Japan is … odd.

Most countries have a very clear chunk of reasonably good land that serves as home to a specific ethnicity. That group forms a government to serve the needs of those people in that place, and then that government steadily expands its writ over more territory and peoples. The valleys Nile, Thames, Ganges and Argun for the Egyptians, English, Indians and Chechens; Muscovy for the Russians; the Beauce for French, the Zagros Mountains for Persians, the Tibetans on their namesake plateau, and so on.

Japan doesn’t really have something like that. The Japanese islands are so steep and arable land so hard to come by that even as late as early 1800s, well over a millennium after after of the emergence of the Japanese ethnicity, the Japanese still lacked a common government.

So…what made Japan matter?

First, isolation. In the imperial age Japan was beyond the back of beyond. Between its island nature and its position on the northeastern corner of the Afro-Eurasian continent system, no one simply happened by. Anyone who wanted to reach the Japanese really had to want to reach the Japanese. If the Japanese’s geography wasn’t as good at isolating them from the rest of the world as one another, they would have been conquered ages ago and never emerged as a people of consequence.

Second, industrialization. What Japan could not do with muscle and wood and arrows and horses and manure they could do with steam and gunpowder and rifles and electricity and chemical fertilizers. The industrial suite of technologies enabled the late-19th century Japanese to overcome their horrid internal geography and forge the truly unified economic and political space we know today as Japan.

But that was hardly the end of the story. More the beginning. Because aside from its people, Japan has nothing that enables industrialization. Steel foundries require high quality iron ore, and Japan has none. Power lines require copper ore or bauxite, and Japan has none. Electricity requires coal or uranium or natural gas, and Japan has none. (Japan’s solar and wind potential for greentech energy is similarly pathetic.) Name an industrial input. Japan doesn’t have it.

And so, the only way Japan could industrialize – the only way Japan could reliably unify – was to raise an empire that could funnel the various inputs of the modern world to the Home Islands. To exist in the modern age, Japan had no choice but to expand into empire.

The Japanese know this in their bones, and they know the converse is true as well. The Japanese fought so hard in World War II less out of nationalism or because their emperor ordered them to, and more because they knew failure would mean a return to mutually-warring Balkanized medievalism.

The modern Japanese also know something else in their bones. No matter how powerful they become, no matter how well they anticipate and administer and execute, no matter how potent their navy, they will never be able to challenge the United States. Attempting to do so pisses the Americans off, and that has consequences. Dire, horrific, searing consequences.

With their WWII defeat, the Japanese prepared themselves to vanish from history. Unity required industry required empire, and their attempts at empire had failed.

But the Americans had other ideas. They needed a worldful of allies to contain and beat back the Soviets, and with 1940s-China in the fourth decade of a particularly messy civil war, Beijing was off the menu. So, in Asia, that left Japan. And so, the Americans folded the Japanese into their new global Order.

That meant unrestricted access to the global commodity supply and the ravenous American market, all guaranteed by the American Navy that had just so completely wrecked Imperial Japan. Economically, it was as if the Japanese had won the war. The decades since have been the richest and most secure in Japanese history.

Fast forward to today.

The Americans are leaving. The Order is ending. The happy period of growth and development and security and expansion without needing to invade anyone is nearly over.

Managing the American departure, or even better yet, preventing it, is paramount. Ergo the Japanese Prime Minister was the first world leader to visit the new U.S. president after Trump’s election, and the second to visit after his inauguration. Abe did everything right. He brought his host a set of golden golf clubs. He lost to him (hideously) in 18 holes. Egos were stroked. Groveling was on the menu. Abe went home satisfied that he had bonded with the new guy and the bilateral relationship was firm.

And a few months later the Trump administration slapped steel and aluminum sanctions on the Japanese economy.

Like many leaders Abe had believed some version of a cake-and-eat-it-too deal was on the menu, and if he could forge a personal connection with the new American leader, then Japan could continue on as before. Abe was convinced the tariffs were a negotiating tactic, and that he just needed to hold out and let Trump’s deal-art run its course.

But a few months later, the United States had inked trade deals with the South Koreans, the Mexicans, and the Canadians. Four of Japan’s largest trading partners had already organized themselves into a post-Order system. The remaining really big one was a country the Japanese really didn’t want to be left with: China. So, Abe did the only thing he could do. He followed the example of the Koreans and Canadians and caved. On everything. U.S.-Japan trade talks wrapped up in September.

Awkwardness aside, this transition to a world of Disorder is a transition the Japanese can manage. In the aftermath of Japan’s 1990s financial collapse, the Japanese corporate world relocated much of their industrial capacity to serve markets far more dynamic than their own. Build and employ where you sell. This doesn’t simply put Japan on the safer side of every political, currency and supply chain risk question, it makes their hosts as interested in protecting Japanese investments as the Japanese themselves.

The strategy hasn’t simply worked, it has transformed the Japanese economy from one of the most dependent upon international interconnectivity to one of the least. Add in the world’s second most powerful blue-water navy, and Japan today is the most flexible and insulated country in their region.

There’s more on this topic to be unfurled and explored. A lot more. But unlike South Korea or Mexico or Canada – the countries covered so far in the Cutting Room Files – Japan is a country exceedingly well set up not simply survive in a world without America, but to dominate its neighborhood. What’s above is a light trim from one core chapters of Disunited Nations. Which means that if you want to truly understand Japan’s future, you’re going to have to wait a bit.

The American Retreat, Part II: Soldiers of Fortune

Read the other installments in this series:
 
The American Retreat, Part I: Oil
The American Retreat, Part III: the Korean Peninsula

by Peter Zeihan and Melissa Taylor

President Donald Trump has a knack for making Prime Ministers and Presidents hope to remain unnoticed. It’s a stunning ability given that national leaders aren’t exactly wallflowers. The past few days have seen a flurry of news releases indicating the Trump administration has turned its focus to Japanese Prime Minister Shinzō Abe. Specifically, the DC community is abuzz with leaks out of the White House that Trump is considering abrogating the American-Japanese security alliance. Trump has long made his displeasure with the alliance public, noting (correctly) that the treaty calls upon the United States to come to Japan’s defense but not vice versa. 

Yet the reason for the one-sided relationship isn’t random. Japanese actions during World War II include such atrocities as the enslavement of Korea, the rape of Nanking, the Bataan Death March. Add in the sort of ultra-nationalism that could generate the industrialized suicide attacks of the kamikaze and the Americans of the late 1940s had zero problem forcing the Japanese – formally – to give up the right to wage war at all. 

The Japanese loved that. And to understand why not having an independent security policy can be a good thing, we need to take a step back. 

The littoral waters of the East Asian Rim are different from the great wide opens of the global ocean. The South China Sea, East China Sea and Sea of Japan are starkly contained with the Asian landmass on one side and a line of archipelagos on the other. The topographies of the lands they border are defined by internal barriers, mostly mountains, that not only factionalize the great regional ethnicities of the Japanese, Koreans, Philippines, Indonesians, and Chinese from themselves, but also from one another. Such separations made pre-industrial integration within, much less among, these groups paltry. 

The mid-19th Century, however, was a turning point. Deep sea ships and military technology had improved to the point that the Europeans and Americans could pop over for a quick forced port opening party and be back home before anyone got too rowdy. The Opium Wars and the arrival of Commodore Mathew Perry of the US Navy were parallel events that had widely disparate impacts in China and Japan. While China continued to disintegrate politically and would largely continue to disintegrate right up into the mid-20th century, Japan ultimately unified under the Meiji Reformation and set about to adopt as many of the outsiders’ technologies as possible in order to industrialize in its own right.

Yet Japan had zero of the resources necessary to drive that industrialization, so from the beginning industrializing Japan had no choice but to be an empire. Those same disconnected geographies bracketed by those same isolated seas never had a chance. Japan’s naval acumen – now backed by firearms and steam ships – quickly dominated those seas and shortly thereafter all the coasts of East Asia.

The Japanese were not kind rulers. The Empire’s need for resource extraction all but required the slave labor of its conquered subjects. With a sense of dark irony that was apparently lost on its founders, the Greater East Asia Co-Prosperity Sphere became the vehicle for Japanese imperial expansion. 

Japan’s defeat at America’s hands in 1945 ended the raping and pillaging, but it would be the grossest understatement to say that mistrust remains. The Japanese knew that without their empire they could not be industrialized, and without industrialization they could not be unified. They believed their defeat would be their end. 

But the Americans tend to surprise. Instead of officiating the end of Japan, the Americans offered to pay the Japanese to be on America’s side in the Cold War. The Americans would protect all global shipping and open their market to their allies. Everything the Japanese fought for in the war would be granted for free. All the Japanese had to do was join the Americans against the Soviets.

This confluence of American strategic needs and East Asia’s regional geography led to the greatest trade expansion in history. Instead of trade being a highly militarized affair, trade routes became fragile, spindly things spread out over the world. But there are few locations where that fragility is as clear as the series of seas that connect the East Asian powerhouses. These same seas that before enabled first outside powers and later the Japanese to dominate East Asia are now the roads to prosperity. Ports and inland infrastructure began the long arduous process of connecting nearly half of the global population and making their labor accessible to the wider world. For all intents and purposes, the region has the most prosperous, economically advantageous “inland” waterway of anywhere in the world. It didn’t matter that no one in the East Asian littoral liked or trusted the Japanese. The Americans kept the peace, and the peace enabled growth that paid for a lot. 

The system lasted for decades, until the Americans won the Cold War and got… bored.

Trump’s musings on the nature of Japanese alliance are not a cry in the wilderness, but the manifestation of disenchantment with the world from across the entire American political spectrum. The tenor and specifics of Trump’s foreign policies may change with his successor, but the general thrust of disengagement has been building since 1992. 

One way or another, the Americans are leaving Asia, and not simply because of a change in strategic vision. There is also the issue of capability:

During the Cold War the Americans boasted a 500 or 600 ship navy with 6 or 7 supercarrier groups. That’s the sort of force required to control the global oceans and still have enough punch to hit a tough target here or there on any continent of Washington’s choosing. Now, however, the US Navy is “only” 300 ships, but with 11 supercarrier groups. This is a Navy that can project force anywhere in the world with stunning efficiency. It is a military that was designed to show up on your doorstep with a tank, Bugs Bunny style. It is the most powerful military the world has ever seen. What it lacks, however, are the large number of small ships required to provide the necessary global coverage to protect all maritime commerce. It is a Navy operationalized not for continuity, but instead for disruption. Not for Order, but for Disorder. 

Bluntly stated, the Americans are getting out of the global management business. The Japanese cannot help but take notice.

Those littoral seas that have become some of the richest zones on the planet? Screwed. It is the American security commitment that makes all of it possible. At best the Americans will sail away and leave the region to its own devices, and history has zero favorable anecdotes as to how the locals can make it work. At worst the Americans will start a few dumpster fires as their often-shifting mood dictates.

Yet for Japan, therein lies a once-in-a-century opportunity.

Of the East Asian states, Japan is the only one (aside from North Korea) that is notdependent upon international stability for its functioning; the Japanese long ago de-sourced the portions of their industrial based linked to exports to the countries that purchase their products. Japan is the only Asian country with a true blue-water navy. Japan is the only Asian country with a power sector that uses diversified imports rather than being focused on a single imported fuel. Japan is the only Asian country that faces no strategic complications in importing or exporting to the Western Hemisphere. Japan’s population may be aging rapidly, but not as rapidly as either South Korea or China, and unlike its neighbors, Japan already has twenty years of experience in countering aging populations with technological patches.

Everyone in Asia faces challenges as the world’s economic and strategic norms disintegrate, but for Northeast Asia, Japan’s challenges are the least extreme and Japan’s capabilities are the most advanced.

And there is one other itty-bitty advantage the Japanese have. At least for now, the Americans like the Japanese. Especially Donald Trump.

When Abe made his first trip to visit Trump he did all the right things. He showered Trump with praise, brought him gold-plated golf clubs, allowed himself to be soundly defeated over the course of 18 holes. Japan’s combination of relative insulation from the rising global chaos and a positive relationship with the global superpower provides Tokyo with an opportunity most countries do not have. The possibility of purchasing the American largess that once was available for free.

Put simply, if the Americans are going to remain constructively engaged in East Asia, it will be because they are being compensated appropriately. America has the ships, Uber has the business model. The Americans are happy to pick up the slack with the right surge pricing in a strained geopolitical environment. The United States has done this before, choosing to be the last minute relief in the European wars of the 20th Century – first with Cash-Carry, second with Lend-Lease, and finally with the Army – and in the process going from a net debtor with a so-so navy to the undisputed financial, military, and economic powerhouse. It turned out to be a pretty sound business plan.

And as coincidence would have it, the next country on America’s trade renegotiation list is none other than Japan. Think of what is about to happen like the global Order in reverse. Instead of Americans paying everyone to be on America’s side in an American security fight, Japan has to pay America to keep America involved in Japan’s security fight. As such we don’t expect the trade talks to be all that onerous.

Japan’s security needs trump its economic needs. So far, Abe has gone to great lengths to stay on Trump’s good side. He has largely acquiesced to the demands of the administration, which include steel and aluminum tariffs and a series of oh so fun looking buddy montages between Trump and Abe. We know that Japan will stomach a lot because from the Japanese point of view the talks aren’t actually about trade. That means the Americans will largely get their way on the economic issues they care about most – agriculture, automotive, energy and currency policy to be specific.

As to what’s next, that’s a bit of a crap shoot.

East Asia has been engaged in a building arms race since the 1980s, and with the Americans abrogating protection of global oil shipments, the lifeblood of the entire East Asian littoral is now in danger.

What’s that saying? Oh yeah… wars have been fought for less.

In the pre-industrial period that littoral’s layout kept the locals apart, but naval tech has come a long way since 1800. Now, with the proverbial cruise missile out of the bag, the shared littoral area puts all the region’s competitors within easy reach of one another. Even mildly threatening behavior looks a lot like an existential threat. Because it is. It takes little imagination to see how a combination of fear, national pride, strategic maneuvering, and economic desperation will push Japan and China (and others) into conflict.

I Think They Get It Now, Part Roku: Japan

Jump to other parts of this series: Intro, France, Germany, UK, Italy, and Canada.

Japan was a latecomer to the modern world.

The Home Islands are rugged territory with few chunks of flat land that can play home to the sort of agricultural infrastructure from which most cultures rise. Geography made transport between these little pockets of land treacherous and rare. Combined with a dearth of local resources much of Japanese history right up until the industrial age was flat out feudal. Local leaders would rise and fall based upon local politics and dynastic struggles. Family was everything. The odd imperial impulse towards unification did occur, but typically the emperor’s powers were of the limited sort. Most competitions had a distinctively local feel. Hell, most names had a distinctively local feel. Most Japanese commoners didn’t have last names until after 1868.

The islands’ distance from the Asian mainland combined with China and Korea’s brand of insular chaos layered on more locality; aside from pirate raids, Japanese interaction with the mainland was at most episodic. Foreign ideas, culture, technology and norms were a world away. Life was slow. While the Germans and Americans and Brits and French and others were using (early) industrial volumes of steel in railroads and stoves and weapons in the first half of the nineteenth century, pre-industrial Japan’s steel use was pretty much constrained to a handful of implements and those famous samurai swords.

But then the Americans arrived.

Admiral Matthew Perry’s flotilla of hybrid sailing-steam ships likely comprised more steel than had been produced by all Japanese in the previous decade. The world realized Japan wasn’t some mystical kingdom, but instead a hugely, hilariously, outdated backwater. The tsunami of American trade – and the new technologies that came with it – surged across Japan, wiping away and transforming the country’s entire political, social, cultural and economic system in what is arguably the most holistic transformation in modern history. It wasn’t an entirely pleasant experience, including as it did the greatest industrial buildup in history, regional civil wars, a class-based genocide, a massive imperial expansion, and a fascist rise to power,

It happened so quickly that Japanese cultural mores couldn’t possibly keep up.

The Japanese thought of their enclavic geography as granting them infinite variety, but when exposed to the kaleidoscope of the wider world they realized just how uniform Japanese culture was. The Home Islands’ isolation sharply limited contact with the wider world; the Japanese are nearly homogenized racially, not just compared to multi-ethnic America but even to rather monochromatic places like Vietnam or Korea.

The sudden exposure encouraged some significant rank-closing, further deepening Japan’s cultural monolith. And since the consolidation occurred during a time of rapid economic development and technological advancement, cultural unity became synonymous with the ideals of Japanese superiority and invincibility.

Cross that cultural tweak with Japan’s geography and East Asia got something new… and dangerous. For Japan wasn’t simply a unified nation, it was a unified island nation – and islands have navies. Industrial prowess, an industrialized navy, a culture bordering on the wrong side of haughty with a burning desire to show its neighborhood just how invincible and superior it really is… you can see where this is going.

Japan’s participation in the Second World War resulted in the imposition of a regional brutality that while not as industrialized as Germany’s Holocaust, was more pervasive through the Japanese armed forces. More casual in its application.

The combination of cultural arrogance and the reach of an industrial navy inevitably brought the Japanese into sharp conflict with the Americans, who eventually rolled the Japanese all the way back to the Home Islands. The post-WWII settlements were crushing – Japan lost absolutely everything from over a generation of imperial expansion. That made sense to the Japanese. They had lost the war so they lost territory.

But the post-WWII order the Americans imposed was downright bizarre from the Japanese point of view. Through the Bretton Woods system, the Americans offered the Japanese everything they had fought for for decades: access to global resources and global markets. In addition, the Americans offered to protect the Japanese from all threats. In exchange all the Americans asked for was that the Japanese join an alliance expressly designed to combat a country that the Japanese had crossed swords with three times in the past half century. Confusion reigned, but the Japanese know a good deal when they see it. They signed up for Bretton Woods eagerly.

The American occupation continued with the now-familiar Japanese tradition of root-and-branch overhaul. The emperor was stripped of everything except his clothes. Democracy was imposed. Bombed out cities – three of which were little more than cinders – were rebuilt from the ground up. The Americans used Japan as a launching pad for their military operations, first in Korea and later in Vietnam. By the early 1960s, Japan had recovered and was humming along nicely.

And then the changes… stopped.

Sure, the newest technologies were still layered into the Japanese system as soon as they were developed, sure booms and recessions came and went, but there were no wars. No political revolutions. No jarring cultural upheavals. No coups. No invasions – either by Japan or of Japan. No shocks – internal or external.

For the next fifty years.

After a century of shock and reinvention and revolution and war and pain, Japan simply was allowed to… be. In a way, time stopped. In a way, Japan walled itself off from the world again. In a way, the average Japanese citizen’s interactions with the world ended.

In a way Japan’s cloistered narcissism returned.

Now the Americans are backing away from it all. All at once the Japanese are discovering the global structures which enabled them to be wealthy while also being isolated are evaporating. That there isn’t a thing Japan can do to preserve the world order. That very soon they will have to choose between wealth and isolation. Considering that one involves high living standards, electricity and full bellies, I’m pretty sure I know which they’ll go for.

But East Asia isn’t as simple a place for the Japanese in 2018 as it was in 1928, because the Japanese were not the only Asian peoples the Americans brought into Bretton Woods.

Taiwan too came in early, and became nearly as technologically sophisticated as Japan. Access to global markets combined with American military protection transformed backwards, poor, wrecked Korea into an industrial powerhouse. Richard Nixon and Jimmy Carter brought mainland China into the fold, starting Beijing on the path to the colossus it would become.

With the Americans leaving, Japan finds itself in a struggle to be Asia’s first power. Unlike in 1928 when Japan was industrial and the rest of Asia undeveloped, the whole East Asian rim is overflowing with industrial might. No longer is Japan towering above the rest.

But that hardly means Japan is going to lose. All Japan’s perceived vulnerabilities are real, but in all cases those same vulnerabilities apply to all its East Asian neighbors – where they are all far more serious.

  •   All the East Asian powers face a dependency upon foreign markets, but Japan has long since offloaded its production capacity to be on the safe side of currency and political risk. Its trade exposure is less than a third relative to its economic size of any of its neighbors.
  •     All the East Asian powers have horrid demographics, but Japan mastered automation over a decade ago and has been steadily modifying its industrial base to operate in a world of constrained supply chains ever since. As a percent of GDP, Japan’s vulnerability to disruption is a shadow of everyone else’s.
  •     All the East Asians face cultural difficulties in dealing with other countries, and Japan has utterly failed to collaborate with its neighbors as equals. Yet far from weakening Japan this exclusionary attitude has forced the Japanese to find economic and technological means around immigration. For example, a refusal to admit foreign health workers has lead to the rapid rise of automation and AI in geriatric care. This not only generates positive knock-on effects throughout the Japanese economy, it keeps a large chunk of the Japanese economic system in-house and utterly immune to the ebbs and flows of the international environment.
  •     All the East Asian powers are hugely dependent upon oil imports, but Japan sits on the outside of the island chain that constrains Asian mainland access to the world. Japan also has a long-reach navy that can go almost anywhere in the world without encumbrance.
  •     All the East Asian powers are poor in any sort of electrical input fuel whether it be high-quality coal, natural gas, or uranium. Not only does Japan’s geographic position enable easy access to diversified sourcing, but Japan’s overbuilt power system enables it to fuel switch with a few days’ notice to whatever imported inputs Tokyo can scrounge up. (For those Greens out there, East Asia has pathetically low wind and solar potential too.)
Will Japan have to fight? Certainly. But it is a fight Japan is well suited for.

My concerns are twofold.

First, part of what made the Asian theaters of the Second World War so nasty was the norms of cultural and racial superiority that emerged from Japan in the pre-war decades. While democratic Japan today is a far cry from the imperial fascism of the 1930s, the Bretton Woods system has certainly enabled pieces of the old cultural milieu to re-entrench. The sort of culturally isolated Japan that exists today, combined with a technologically advanced navy, and a need to use that navy to achieve national prerogatives feels uncomfortably familiar.

Break the global system and it is devilishly easy to imagine an East Asia where the Japanese are not simply on the warpath (again), but one where the Japanese are less than gentle with countries who disagree with them. Most focus on the likelihood of Chinese aggression throughout the region. I think that’s a bad reading of East Asia’s geographic, industrial, trade, and historical characteristics – both past and present.

Second, is the issue of “what then?” I typically try to limit my forecasts to the next couple of decades. Past that range, changes in demography and politics and culture and technology tend to layer in a lot of future fog that limits data-and-geography-fueled forecasting to little more than armchair prognosticating. But if the Japanese have the deck so stacked in their favor, I believe it is useful to push a bit further forward and guess at what’s just over the horizon. What happens after the Japanese have re-established some version of a mercantilist colonial relationship with their region, an Asian Co-Prosperity Sphere, if you will?

More than any of the other major players, Japan needs to be cognizant of American goals, interests and whims. The United Kingdom is in tight and won’t break with Washington. Canada is family. Family fights, but family also makes up. The Germans and Italians swim in different ponds. The French will be the French, but there’s no real likelihood of meaningful French structural competition with North America.

But Japan is likely to emerge from the coming Disorder as the dominant regional power. Its relations with everything from Vladivostok to Yangon will be a diverse mix of neo-imperial management systems ranging from alliance to partnership to suzerainty to occupation. That sort of dynamism and variety is certain to suck in external powers. And this phase in American isolationism is just that: a phase. It will end.

Of all the soon-to-be-rising powers, it is Japan which must tread most carefully to ensure it doesn’t step on Washington’s toes. Tokyo remembers full well what miscalculation in that department leads to.