The following is a draft of a talk that I am giving to a professional group. I thought that it would be good to trial it here. It is not quite stream-of-consciousness in nature but is fairly loose in terms of argument tightness and structure. My usual approach is to write a long form essay on the theme of the talk, then condense and memorize it for an off-the-cuff presentation. I do not use slides or power point presentations for the talks. 25 years of university lecturing and a lot of public speaking allows me the luxury of distilling fairly complex thoughts into shorter talking points. I have incorporated some references brought up by reader Barbara Matthews because they add depth to the discussion.
Introduction.
As Dickens wrote, “we live in the best of times and we live in the worst of times.” That is because we are experiencing a moment of systemic transition in world affairs. This transition is political, economic, cultural and technological, something that in aggregate affects the entire global network of human institutions. It also involves changes in nature, which cause and compound the human changes that we are now observing. As the Greek philosopher Heraclitus observed, we never step in the same river twice. The moment is fluid and uncertain, the possibilities both open and endless yet potentially dark and forbidding.
In order to make sense of this we might break down the broader picture into component parts. These are 1) the structure of the international system; 2) the rules governing the global order; and 3) the geopolitical repercussions of the changes currently underway.
First, the world is moving from a multipolar to a poly-centric system. In the past 50 years we have seen the long transition from the bipolar world of the Cold War, to the unipolar world of the first post-Cold War decade, then the emergence of a multipolar world where rising great powers like China and India compete for global primacy with declining powers like the US and Russia, and where new and old middle powers are finding necessity in forging alliances amongst themselves and smaller States rather than seek the security provided by larger Powers. That includes the rise of the Global South, exemplified by the emergence of a bloc of so-called BRIC countries, which represent a challenge to traditional “northern” dominance of the international arena (“South” here referring not to a geographic location but an ideological orientation that has roots in anti-colonial struggles).
“Polarity” traditionally has only involved nation-States. Large Powers exercise gravitational “pull” on smaller powers that seek their physical protection and provision of material security. It now includes non-State actors like technology conglomerates and their supply chain adjacents. The “poles” themselves can be divided into techno hubs, entities that use knowledge economies to generate wealth and power, and resource hubs, those that provide energy and material inputs to the global knowledge economy. Both need each other and in fact hybridisation of these productive models is now the norm in many places such as the Arab Gulf States. When the independent power of non-State actors and cross-border impacts of technology are factored in, we see that rather than multipolarity what is emerging is a polycentric constellation of global-reach actors that cluster around mutual interests or, often enough, conflict nodes based on their rival pursuit of competitive advantages in specific material or ideological realms.
Secondly, this has led to the demise of the post-WW2 “liberal” status quo, which was designed to bring stability and predictability to the exchanges between State and non-State actors in the international field. The disruption of this “liberal” international order (liberal defined not on ideological terms but as a voluntary system of mutual checks and balances governing International relations and foreign affairs), has led us to what is now a “post-liberal” (and often illiberal) world order, one where liberal rules, norms and conventions are violated and its institutions increasingly ignored. This is a return to what Hobbes called a “state of nature” in international affairs, often interpreted as a return to “might makes right” doctrines associated with the golden era of late 19th century imperialism. Those who can, do. Those who cannot suffer at the hands of those that can.
The institutional edifice created after WW2, what came to be known as the Liberal International Order, is breaking down. The norms, rules and institutions that made up that order have been rendered ineffective by the rapid changes in human societies, and liberal rules, norms and institutional processes are being increasingly ignored in favour of more self-interested actor-centric approaches to global affairs. An area where this has been seen quite starkly is in the field of international affairs, where the liberal international order attempted to stabilise and regulate away from actor-centric foreign policies and towards mutually cooperative inter- or transnational institutional arrangements that mitigated power disparities between nation-States and among private market agents based on their geographic and political position in the global system. One such regulatory mechanism was the concept of freedom of navigation, which guaranteed safe passage to civilian shipping on the open seas and in smaller maritime spaces (e.g. chokepoints such as straits and small seas) otherwise subject to the interference of adjacent littoral states or non-state actors (like pirates).
Third, that returns us to a core notion now commonly used in non-specialist circles: geopolitics. Put simply, geopolitics is the relationship between geography and politics. It traditionally used to be seen as a matter of how human politics and military strategy conformed to or utilised immutable geographic characteristics in pursuit of (national) State interests, recognising that geopolitics also encompasses economic, diplomatic and sociological factors as they are influenced by geography and geographic trends. Mass migrations are an example of such activity because they have cultural, economic and security implications, but things like hydro dam construction on rivers that traverse national borders have the potential to become serious diplomatic, economic and military problems as well. The disputes about Mekong River damming, dredging and usage, and the consequent end of traditional riverine lifestyles and population exodus from riverine communities, are an example of this.
Now, although the need for geopolitical adaptation remains a constant of international relations, the relationship between geography and politics has shifted. On the one hand, technologies have made human adaptation or utilisation of geographic features far more extensive than in previous eras. Humans dominate nature in a measure that they did not before, which in turn allows them to exploit terrain and earthcapes in previously unknown ways. Think of undersea and space travel, geospatial mapping, deep sea mining—and warring. Once unimaginable, all are either now currently in existence or on the threshold of becoming reality. Automation, robotics and nano-technologies, to say nothing of AI applications in those fields, allow for the exploitation of geography (and nature in general) in ways unheard of during the golden era of geopolitical thought in the early 20th century.
On the other hand, climate change and other natural shifts have altered the physical world in fundamental ways: consider the melting of the Arctic Ocean icepack opening up the Northern Passage and the retreating ice cover in Antartica opening up accessibility to mineral exploration in ways never seen before. The same is true with the impact of warmer temperatures of drought/deluge cycles on fishery stocks and freshwater supplies. At the intersection of climate change and technological advancement, solar, wind and hydro energy production have significant geopolitical implications that go beyond traditional comparative advantages in one or the other under previous technological regimes.
In summation: geopolitics is at once more fluid and yet remains constant as a guiding principle of international relations. The more things change, the more that they stay the same. In moment of global systemic transition, geopolitics becomes a core feature of the process. That is where human agency becomes a decisive variable for better or worse. What follows is two issues where human agency is at play.
Institutional lag.
“Institutional lag” refers to the time gap between an event or appearance of a phenomena and the response to them from complex organisations. Derived from management theory, the concept posits that institutions will be slow to respond and adapt to changes in their environment, which in turn will lead to unnecessary costs, superfluous behaviours, design obsolescence, duplication of functions, misplaced objectives and ill-suited planning.
This syndrome is often more than just a failure to react in a timely or responsive manner. Complex organisations develop a type of bureaucratic inertia where established systems and procedures are resistant to change unless some externality forces them to. Even then, they way the respond is not agile and may often not be what is needed for the adaptive task at hand. The adage about generals always preparing for the last war is an illustration of the concept but the notion extends further. Until a technological or other form of social breakthrough occurs, the organisation is perpetually bound by “tradition” (procedure and usage) and therefore always behind the times. Innovative breakthroughs are more often forced by externalities, not pushed by proactive internal reform within the organisation.
Societal Resilience.
Refers to the ability of human societies, including businesses and economic sectors but extending beyond that, to be adaptable and flexible when it comes to unforeseen, unexpected or sudden events that disrupt their business models and the production chains in which they are located. These can be caused by sudden technological advances, black swan events, political crisis and wars, epidemics and pandemics, natural disasters and other unanticipated phenomena. The term is derived from “Industrial resilience,” which is basically management-speak for changes in processes, procedures and networks caused by external events that require rapid responses via technological advancement and/or diversification of input and output links as well as market substitution, among other things.
In a way, societal resilience, and especially business or industrial resilience, is inversely related to institutional lag. The more resilient a society, industry or social group is, the more bureaucratic inertias can be overcome and institutional lags minimised. Therein lies the problem. Societies and the organisations and demographics that comprise them seek stability, and stability depends on commonly accepted status quos. When something happens that disrupts the whole or part of an institutionalised status quo, the response is often increased resistance to change “in the way things are” rather than flexible adaptability. It is embedded in the human condition so the issue is not trivial in times of systemic change.
It was thought that the Covid pandemic would force industrial resilience upon the global trading community, and indeed, concepts such as “near-shoring,” “friendshoring,” and regional hubs all gained traction in the international system of production, consumption, telecommunications, transportation and commodity and service exchange. The reality was that genuine resilience strategies was adopted by a minority of businesses, with the majority opting, after a period of disruption, to assume a “business as usual” approach and resume their old ways of doing things. This included “just in time” production schemes that worsened the impact of the pandemic in terms of post-recovery demand increases. With little inventory stockpiled while demand was low, business found themselves unable to fill orders quickly, leading to inflationary pressures resultant from demand on limited stock, compounded by the US imposition of tariffs on a wide range of goods from dozens of countries and regional trading blocs. None of this was anticipated by corporate elites once the Covid wave had crested.
Likewise, once the pandemic peaked in terms of deaths, illness and infection rates, many social actors, including political parties, interest groups, community organisations and an assortment of individuals grouped into a variety of grassroots agencies, engaged in revisionist historical interpretations of the pandemic and its underlying causes. Besides theories about Covid’s origins (in a Chinese lab or wet market, among others), there was questioning of whether the disease existed at all and whether vaccines were needed, necessary, useful in fighting the its spread or were part of some Deep State mind control plot. The use of surgical masks as simple front-line defense against airborne infections was even questioned. People were murdered in disputes over mask usage, and an assortment of quacks sprang forth to offer a range of pseudo- or non-scientific solutions such as injecting bleach into the body (advocated by president Trump), horse vaccines and perineum tanning (advocated by assorted alternative medicine adherents and wellness “influencers”).
This reaffirms the axiom that transitional moments such as that involving global systemic change are marked by conflict, not just in the form of rules and norms violations between competing actors such as nation-States and global non-State powers, including the resort to violence in order to settle disputes, but in the human propensity to resist change per se. That is what resilience must focus on: overcoming the innate human tendency to resist change even when it is forced upon us.
One measure that is both a sign of societal resilience and a stop-gap during periods of institutional lag is hedging. Hedging can be both strategic or practical and can be deployed at both levels simultaneously. Diversifying trade partners, seeking alternative sources of information or material inputs, widening exposure to previously unknown contacts, languages, cultures and experiences, experimenting with new ways of doing things are in one way or the other examples of resisting complacency and stagnation by not putting one’s eggs in one basket. Strategic hedging focuses on planning for (and against) long-term events. Tactical hedging focuses on immediate problems.
For example, if the PRC decides to restrict NZ dairy or meat imports because of displeasure with a NZ foreign policy stance, what does NZ do as a contingency plan? Rescind the foreign policy measure that caused Chinese displeasure? Find alternative foreign markets? Open at a lower price scale or subsidise the domestic market for the excess inventory caused by the Chinese bans? Reduce production and ask producers for patience (and reduced profits)? One decision (what to do with the foreign policy stance) is a strategic matter, the answer to which will determine subsequent tactical choices if necessary.
While that is happening industrial resilience will be tested in the export sector, determining whether it is flexible and adaptable enough to weather the dispute and emerge with better plans that cope with future exigencies.
The point of this illustration is to highlight the utility of hedging as a resilience response to crisis, uncertainty and change. That may or may not lead to more durable patterns of behaviour, and that depends on how the inevitable conflicts that arise are resolved and mitigated. Much money and effort has been spent developing sophisticated risk analyses that offer predictive models for myriad of systemic events. That is helpful in framing and avoiding identified problems but it is in the solutions that stem from them where true resilience is found. Given what has been mentioned above, that may be the most daunting project before us.