Discover more from Imperfect notes on an imperfect world
In Japan, the sakura are falling. Perhaps elsewhere, too.
This visual, care of Economist Intelligence Unit, makes clear that the sanctions against Russia are effectively a Western affair:
When the same data is presented in this graphic from Élucid’s conversation with Emmanuel Todd it offers a powerful reminder of how much of the world is choosing not to actively participate / follow the West:
On this, Shivshankar Menon observes:
…in many parts of the world, the most crucial issues of 2022 had little to do with the war in Ukraine. Emerging from the havoc of the pandemic and confronted by far-reaching challenges ranging from debt crises to a slowing world economy to climate change, many developing countries have been alienated by what they view as the self-absorption of the West and of China and Russia. For them, the war in Ukraine is about the future of Europe, not the future of the world order, and the war has become a distraction from the more pressing global issues of our time.
This is echoed by Edward Luce:
When the West can be bothered to listen, the global south’s consistent refrain is for more dollars to help their shift to clean energy, better infrastructure and modern healthcare. Which of the two great powers, China or the US, helps the most is likeliest to shape their political future and foreign policy alignment. One of the by-products of Russia’s invasion of Ukraine is that it has brought this pressing question to the fore.
Stephen Walt makes a comparable point:
…most countries around the world understand that war is mostly bad for business and frequently affects their own interests adversely. They do not want to see great-power competition get out of hand, because they believe a Sino-American clash would have negative consequences for them. As an old African saying has it, “When the elephants fight, the grass suffers.” In the decades to come, therefore, many states will prefer to rally behind whichever major power seems more likely to promote peace, stability, and order. By the same logic, they will tend to distance themselves from whichever major powers they believe are disturbing the peace.
Returning to Menon, he offers the reminder that in absolute terms, similar to my previous note about weakening powers:
…the Russian invasion, combined with the continuing effects of the pandemic and the global economic slowdown, diminished all the great powers in both power and prestige.
An interesting observation from Gan Yang on the evergreen ‘Thucydides Trap’:
Allison’s description of the Thucydides Trap highlights the concept of ‘fear,’ but in Thucydides, there is a triple structure of ‘honor, fear, and profit.’ In my opinion, we should not attribute what we call the deeper causes to ‘fear’ alone, especially in the face of today’s situation, but should link them instead to ‘honor.’
Honour. Identity. Worth keeping in mind.
Meanwhile, Ezra Klein has gotten around to thinking about semiconductors:
But semiconductors are also part of one of the most concentrated supply chains of any technology today. One Taiwanese company, TSMC, produces 90 percent of the most advanced chips. A single Dutch firm, ASML, produces all of the world’s EUV lithography machines, which are essential to produce leading-edge chips. The entire industry is built like this.
That doesn’t just make the chip supply chain vulnerable to external shocks; it also makes it easily weaponizable by the powers that control it.
One such external shock could be climate:
Taiwan, home to Asia’s biggest semiconductor industry, is once again bracing itself for water shortages less than two years after overcoming its worst drought in a century. Chipmaking is a thirsty business. Take Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chipmaker, for example. Its chip facilities in the Southern Taiwan Science Park alone consume 99,000 tonnes of water per day, according to the company’s latest figures. And as chip production techniques become more advanced, their water needs grow.
Ironically, the island’s strategic importance as a chipmaking hub is exacerbating the problem of chronic water shortages. “The pressure on water and energy supplies that Taiwan faces is much bigger than a couple of years ago,” Wu said. “We didn’t expect there would be so many Taiwanese suppliers coming back to the island to invest [amid the US-China trade war] . . . At least I didn’t calculate this factor in my forecasting model.”
Semiconductors are made through precisely the kind of supply chains that seem increasingly problematic, while at the same time, there are major doubts about the practicality and viability of addressing these vulnerabilities.
Eswar Prasad suggests:
…fragmentation of trade and finance along geopolitical lines might not deliver the presumed benefits of greater economic stability and resilience. Rather, these forces might ultimately foment even greater volatility, both economic and geopolitical. The burden of these shifts will fall disproportionately on low- and middle-income economies.
Angela Nagle proposes:
This is a transitional moment, as one economic master narrative is supplanted by another. How can we make sense of it? The economic historian Erik Reinert has spent years reviving what he called the “other canon” of economic history and thought. Forsaken during the US’s postwar dominance (a period in which free trade benefited the unchallenged industrial leader of the world) this other canon is a method to reveal the world, past and present, in a different light. It was not imperialism or laissez-faire but state-directed policies that drove the economic miracles in 19th-century England, in post-Civil War America, Meiji Japan and the Wirtschaftswunder in 20th-century Germany.
Either way, the period of neoliberal globalisation is over and state-directed industrialisation is back.
Along with the many benefits of 19th-century development strategies came geopolitical competition, and then conflict.
In a similar vein John Micklethwait and Adrian Wooldridge in Bloomberg:
This time, the restructuring of finance looks less likely to be about a big new set of rules than about a deeper change in the political mindset: an acceptance of a mercantilist form of finance — something that Adam Smith would have abhorred but which chimes all too well with the statist policies of modern geopolitics. We could be slithering toward a new form of financial capitalism, one laden more with peril than with promise.
We are seeing the birth of a new form of financial capitalism — banks are becoming more intertwined with governments, and governments are picking winners and trying to back the industries of the future.
Look to the air, as the blossoms fall.