The renaissance of geopolitical thought

Geopolitics differs from the more empirically-focused social sciences in a number of ways. For one thing, apart from repeatable observations it also builds on a tradition of wisdom, anecdotal observations, and educated guesswork. It embraces not only economics, political science, history, and geography, but also the critical-theory tradition.

The reason for the link with critical theory is the conviction that continuing critique of contemporary society is essential not only to understand the world we live in, but also to maintain it into the future. A positivist methodology for the social sciences with a solid peer-reviewed system of journals is a fine path to follow once we have agreed how knowledge is to be built, once we are sure which route will give valuable results. This has been far from true for the social sciences since the Second World War. The current paradigm has instead been moulded by a conviction that ever-greater specialization and examination of small samples will yield new insights and social progress.

In the journals, theory is regularly preferred to description of reality, and scholars compete with one another to introduce theories with new names, though the observations underlying the novel theories in most cases replicate findings which have been reported over and over again by earlier writers.

Very rarely do scholars of the current American-led paradigm bother to read older books by, say, French or German authors. This is as much a question of the generation they belong to as of language skills and cultural ethnocentrism. In consequence, what passes for informed, smart, and up-to-date only looks that way. It has legitimacy because it is supported by an academic establishment (which, by the way, by no means includes all academics).

Even in the English-speaking world, by no means all scholars support the current paradigm, just as by no means all economists are neoclassical economists. Many of the best critics of these ideas and schools are Englishspeaking academics. Furthermore what is being described is not a “conspiracy”, in the sense that everyone affiliated to one paradigm is trying to do down everyone else; but it is a struggle for influence, power, and prestige.

The social sciences were sharply separated off from the humanities after the Second World War, because it was thought that they would be more successful at predicting future events if they followed a more scientifically-rigorous direction. The vanguard comprised economics and political science . It was thought that these two subjects would achieve far more as separate fields of study than they would if studied together, as they were in the late-nineteenth-century days of “political economy”.

And in some areas they have indeed been successful, as when studying various specialized systems, such as the accounting or legal systems of particular countries, or their governmental policies. The problem arises when we want to put things together, to produce syntheses, when we want to draw conclusions that can be useful in general situations or across cultural borders.

The problem arises when we come to the macro structures, which are so important in the study of international economics/international business or international politics/international relations. By ignoring specifically political facts within writing about economics and vice versa, by overemphasizing theory rather than reality, and by systematically avoiding material belonging to the domain of the humanties (history, geography, languages), the modern development of these studies has made us less, not more, capable of predicting future events.

Geopolitics and geoeconomics do not accept that new understanding of social facts will come from ever-greater specialization, following the logic that started with the division of political economy into economics and political science. If you study political science while knowing little about economics or viceversa, the chances are that you will not understand much about macro factors. As an economist you might be an excellent accountant, but you will not know how new rules and regulations are implemented, and so will not be able to advise your clients.

As a senior macro-economist in a bank you will know very little about the factors actually influencing your business. Endless television programmes feature these men repeating themselves in general terms, ultimately just to try to offer their customers reassurance. Most students of economics specialize strongly either in micro or in macro economics, to the point that if you are a micro economist you do not always know how the central bank system functions, or as a macro economist you cannot explain what derivatives are.

This is a greater problem for macro economists than it is for micro economists. As an example, marketing specialists in a private-sector organization will not really know much about accountancy, but there are other colleagues to handle that and the organization will not be much worse off because of that deficiency. Both problems are mainly due to over specialization, but their effects are different.

Criticism of academic economics has mounted in recent years because of the current economic crisis. Many social scientists, including economists, have begun to question the fruitfulness of modern economics as a science. Despite the existence of a system of peer-reviewed journals and high-prestige academic prizes, the field has not made much progress towards developing a framework that helps decision-makers to predict future events.

If economics should accept that this is not a possible or realistic goal, that would raise serious questions about the status of economics as a science comparable to the natural sciences, which we recall was very much the initial aim. It would not mean the end of economics as a discipline, but the subject would have to abandon its theoretical aspirations. It would instead have to be seen much more as a craft or art. In some ways that would be a relief. It would then be possible to shift attention from theory to the description of reality.

Such description does happen within economics, under the heading of “case studies”. But although case studies are certainly appreciated as “pedagogical contributions”, they are not regarded as “scientific contributions”: an academic economist cannot make a successful career from them alone.

Management as a subject was started, by scholars like Peter Drucker, out of very much this same concern about a “lack of reality”. Drucker was never much appreciated among diehard scientific economists from the high-prestige universities, but that did not matter. Practitioners loved him, just because he was relevant.

The current paradigm in academic economics involves a refusal to consider the tradition of critical theory; instead it systematically portrays economic activities in the form of a tribute to the free market economy, with the understanding that critique of society is best left to sociologists. This has been quite unfortunate for the credibility of the economic sciences, but also for our understanding of economic behaviour. Refusing to consider the critical-theory tradition also means that the discipline of economics cannot manage to change direction, now that it is confronted by a theoretical stalemate. That is, positivist, algebra-based neoclassical economics offers no possibility for the discipline to move beyond its own paradigm.

The stalemate in the field of economics has been demonstrated by the fact that our economic theories are failing to lead us out of economic crisis. This has become obvious by contrast with the Asian and especially Chinese economic miracle.

According to our economic theories, the State is not supposed to succeed in business. Public companies are supposed to be more efficient than either private partnerships or State-controlled companies. Moreover, Western-style democracies are supposed to be economically superior to more totalitarian states. Liberalism and free-market economics are supposed to lead to a more competitive society. Fewer rules and regulations are supposed to lead to greater productivity, more prosperity, and a better life for all.

Currencies are supposed to be stronger when they are allowed to flow freely. All these conclusions and the assumptions behind them must now be questioned. Economics is too important a subject to be reduced to a cheerleader function on behalf of misguided current business practices. On the other hand criticism needs to be more than Marxism or socialism, and deserves a better label than “Heterodox Traditions”.

The reason why empiricists are dominant in today’s academic world goes back to the well-known Methodenstreit in the 1880s and 1890s, between the Austrian School of economists and the (German) Historical School. After the Second World War the Historical School received what amounted to a death sentence, as waves of German-speaking social scientists left their homelands, disillusioned by what many saw as the negative consequences of their own scientific methodology.

The historical method allowed for too many value judgements, the feeling went. The social sciences should instead learn from the natural sciences, proposing hypotheses and testing them empirically using correctly calculated sample sizes to achieve an acceptable level of statistical significance. Now, after more than half a decade of experience with alternative social-science methods, the criticism of the historical method and historicism is less problematic than the lack of results from the alternative methods proposed by economists inspired by Karl Popper and the Austrian School, with its laissezfaire.

Many American economists, led by Paul Krugman, have even acknowledged that Keynes’s approach, with his long case-based papers and his method based on logical deductions supported by macroeconomic statistics, is superior to the neoclassical style.39A method that has achieved wonders in the natural sciences has been far less successful in the social sciences.

It is not that there was any conspiracy to reject alternative methods or any ill will underlying the original project. Its creation was itself a natural consequence of the historical development in the latter part of the twentieth century, following the Second World War and the defeat of Germany. The new era needed new ideas, far removed from what were seen as harmful consequences of Continental European intellectualism. The new social-science project was intended to be a decisive counter-reaction to Hegelian idealism.

Thus we can track a development from German-led thinking between the mid-1850s and the Second World War, to thinking led by English-speaking scholars down to the present. What we are seeing now, with financial crises in the Western world and the rise of China as a superpower, is the emergence of a new paradigm for economics. Winners have their own ideas which they will seek to impose on the world.

Does current economic theory have much relevance to business success? There is surely great discrepancy between theory and practice here too. How does it happen that countries which have traditionally shown little interest in the new social sciences, such as South Korea and Japan, but also Germany,40have performed so well economically? Could it be because applied developments in engineering and the natural sciences matter far more than the study of social sciences? Is it because most business practices can be learned on the job? Perhaps learning how to work rationally is all one needs, and maybe that is better learned by studying the natural sciences.

What if a decent upbringing is more beneficial for business success than going to business school? The former chairman and chief executive of Asea Brown Boveri, Percy Barnevik, said recently that he only learned two per cent of what he needed to know as a leader at business school – and he went to one of the better ones.

In other words we must ask: how much of our teaching in economics and management is ultimately political, and how much actually helps our organizations gain competitive advantage? To what extent is our business education geared to turning out obedient workers, and how far does it turn students into critical citizens, into what the humanist European tradition views as fully developed, responsible, and mature human beings? This question lies beyond the purview of present-day economics; but it does not fall outside the responsibility of our elites and of those who decide what we should study. Perhaps the social sciences are not all that well suited to educating critical individuals. Perhaps that task is better left wholly to the humanities.

If so, then there are even stronger reasons to question the usefulness of current social-science methodologies.

The lack of a clear real political perspective in social science courses today is confusing our students. It is making them less prepared for the realities of business and public office. From a broader perspective, the Western approach to the social sciences has always been ideological. In this respect there is not so much difference between Marxism and laissez-faire capitalism.

They are both powerful Western ideologies. We have an obligation to our students to tell them the real political truths about the world in which they will be working, and not to let them be duped by idealist fables spun off the great European revolutions. Whether we like it or not, the fact is that chance plays an important role in history. For example, Lenin’s project of returning home and overthrowing the Tsar was largely financed by the German military command, and the so-called Russian Revolution was a confused coup d’etat carried out by a handful of Bolsheviks and some naval seamen who had been persuaded more or less at the last minute to support the rebellion.

After the initial coup, the whole undertaking rapidly turned into a tyranny. Another example spun out of the same ideology is the myth of Napoleon as an unselfish, self-sacrificing hero of the Revolution. Napoleon was no democrat but a clever opportunist, who used the ideals of the Revolution to enrich his family. All Western politicians since then have to some extent been Napoleon’s children, playing a game of manipulation to win favour with the masses –a system and logic unmasked in the works of the great thinker Ortega y Gasset (e.g. 1930).

We must question our claims to occupy the moral high ground. For instance, politicians (unwittingly in most cases, but systematically) manipulate the public when they claim that we are helping the developing world through overseas aid programmes. In reality our policies are more effectively designed to keep the poorer countries indebted, to control them and make them dependent, to justify our own protectionism and subsidies to our own voters while appearing to be doing good.

Only secondarily does overseas aid achieve positive results for certain of the poor and needy in certain cases, as in the example of much-needed emergency relief. As Goulet and Hudson (1971: 78–87) remind us, funds provided as loans by States are often governed by tougher conditions than private-sector banks impose. Yet the former are called “aid”, and the latter “investment”. Furthermore, most of what we class as overseas aid comes back to our own companies and nationals in the form of salaries and profits and to pay for the administration of the programmes.

Most of our political decision-makers know this is so, but the system is seldom questioned, because it works. In the public eye it creates an image of a moral high ground, which allows us to continue exploiting the poor. On these issues I have often found that my Asian and Chinese students have a much clearer understanding of reality and the political intrigues which take place on the world stage.

When the previous French president Jacques Chirac gave funds to his friend President Omar Bongo of Gabon, he saw part of that money returned as political contributions to his political party, the UMP. Bongo, who ruled his country from 1967 to his death in 2009, never distinguished between the country’s money and his own; and the French public never seriously objected to this, mainly because they did not know, because the facts were hidden from them. Instead the French were led to think that they were doing good. It also follows that because we are morally superior we can to some extent do as we like, even if that means going to war and invading other countries.

Very little overseas aid actually reaches the people who need it. It only looks that way, and we enjoy and enhance that appearance in a self-deceiving way, ultimately because it is part of the political fabric we believe in. Of course there are exceptions, but that is not the point. People in the West are just as prone to self-deception as people in other cultures, perhaps sometimes even more so. Uncovering these mechanisms is leading a whole generation of students, especially non-Westerners, to question the established social sciences which serve to legitimize the status quo.

The fact that we are now slowly being overtaken by another civilization is serving as a catalyst, a triggering mechanism for questioning our understanding of the world and how to succeed in it. From this perspective we need more realism and less ideology, moredescription of reality and less theory. It is what is leading to a renaissance of geopolitical thought.

The Great Game

We use four criteria when approaching acquisitions – financial value creation, client and product portfolio synergies, systems integration, and the fourth is “culture”. We ask, “will the cultures mesh? Is there a good human fit in the way we do business?” We consider this very seriously because we know that a cultural clash would be devastating for our shared ethos (“Stephen Green leads HSBC to the crossroads of the World”, McKinsey News, 20 March 2006). Stephen Green, Chairman, HSBC Holdings plc The multinational enterprise is the ultimate weapon in a globalized world. Not only nation states but also international institutions work in favour of the multinationals.

The interests of multinationals are championed by finance ministers and central-bank directors. They in turn are able to put pressure on the IMF (traditionally run by an American), on the World Trade Organization, but also on the World Bank (traditionally headed by a European), to carry out their policies, even when these go against the well-being and prosperity of a particular country or against common-sense economic notions(See Stiglitz (2002). The serious economic and financial crises in East Asia (South Korea, Indonesia, Thailand) at the end of the 1990s were largely due to faulty economic advice by the IMF, demanding that these countries set extremely high interest rates.

That brought trade to a halt and caused numerous bankruptcies. IMF help essentially saved Western banks, not Asian industries. Thereafter and as a result, Asian confidence in the IMF and the USA was destroyed. Instead the Asians built up their own currency fund within the ASEAN+3, referred to as the Chiang Mai initiative, a regional financial reserve mechanism. Malaysia and China refused to accept the IMF regulations, a political decision which was to prove economically successful.

The IMF made the same mistake with another country a few years later in 2002, demanding tighter budgets in Argentina as a response to recession. This advice contradicted most economic commonsense (Stiglitz argues), which is to stimulate economic growth at times of recession.). These supranational or international institutions have to a large extent become the political arms of (Western) multinationals.

Everything is politics, and politics is ultimately all about economics. Thus we are seeing a general shift towards crude economic interests among nation states, as they have become ever more dependent on the natural resources needed to run our modern industrial societies.

We are seeing increased competition not only for oil, but for metals such as gold and copper, timber, especially hardwood, and in the near future, water. This already defines a new geography of conflict which will last at least for some time to come (Klare 2001: 213). It illustrates the shift from a logic of geopolitics to that of geoeconomics, and suggests new geographical arenas relevant for the competitive advantage of nations. Will the world in future always be more about economics than politics? Shall we see a shift back from geoeconomics to geopolitics, to political ideologies or religious crusades? How long will the “American Empire” survive?

These questions are open for speculation, since we do not and cannot know anything about the far future. In his latest book Jacques Attali argues that we shall return to an era of politics. He believes that the US will be in clear cut decline by 2035, that the market will win out over democracy in 2050, but that world democracy will regain its position in 2060 in the form of a World State (Attali 2006: 19–23). Joseph Stiglitz (2006) hopes for a turn to the better through globalization, and he argues that this is happening already: for instance, 500 million Chinese are already being lifted out of poverty. Johan Galtung is bolder and sets the end of the American Empireat 2020.

In its extreme form this competitive situation is the quest for world dominance, often referred to as the Great Game, with reference to Britain’s aim to control Northern India, and through that the great passage between East and West and Russia and the Indian Ocean . This “game” was long played by city-states and nation states, and only indirectly via private-sector companies. Today the scenario looks like a joint effort facilitated by nation states and multinationals alike, in which the former lay out the tracks and maintain them, and the latter run the trains.

The “game” was fought between the two main ideological blocs during the Cold War, and it is being fought today between the winner of the Cold War and any nation opposing its interests. This is much the same situation as Britain found itself in at the end of the nineteenth century, towards the end of colonialism, which coincided with the decline of the British Empire. Since the Second World War, US domination can be seen as an attempt to fill the gap left by the British Empire.

It has been a continuation of the same dominance, merely under a different flag. As such the American Empire has been less successful than the British. For one thing, the USA has not been able to hold any area where it has intervened militarily, despite the fact that it has always aspired to do so. It has not been able to profit from its military operations, but instead and as a direct result the country has amassed a vast debt which it will probably never be able to repay. With the rhetoric of the Bush administrations (father and son), the world even began to feel that America represented a new Roman Empire.

It was also an America which most people elsewhere saw as out of touch with the prevailing values of our times. Now under Obama the objectives and the actions are the same, but accompanied by a less destructive rhetoric. So far this strategy has worked well: the Europeans have become more co-operative, the Arabs feel less threatened, and the Asians more reassured. In reality nothing fundamental has changed.

Most Europeans seem convinced that Obama will achieve good things, to the point where he has been awarded the Nobel peace prize in advance, in the hope that he will do good in the future, despite the fact that he has stepped up US war efforts in Afghanistan and Pakistan and spent more money on arms that any other US president since the Second World War. But then it should also be remembered that Obama is a master rhetorician, probably the most skilled the White House has seen in more than a century.

The Nobel peace committee has a long history of unfortunate decisions, awarding the prize to various individuals with blood on their hands: Yitzhak Rabin, Yasser Arafat, Menachem Begin, Henry Kissinger. According to Tariq Ali, Liu Xiaobo is far from what we should call a peace loving man. He still supports the American war against Vietnam and thinks it was unfortunate that the western powers did not succeed to colonize China.

The committee now follows a logic whereby the prize is awarded to people they hope will do good. It is rather like giving a chemist a Nobel prize while he is still an undergraduate, in the expectation that he will come up with great results once he has started work as a researcher. The prize has become a political tool, more than a recognition of actual achievement. What will eventually bring the American Empire down is not its geopolitical adventurism since the Cold War, or the failure of fundamentalist Christian retro-utopian plans for world dominance, but its economic strategies.

For one thing, the USA is financing its current wars with Asian IOUs. This would not have been a problem if the country was getting more back in return for its “investments”, as a consequence of those wars, than what they cost; but that is not so. The British Empire lasted for more than two hundred years because the British were able to find goods which they could sell, even if that meant selling drugs (opium) produced in India to the Chinese. All the US has managed to get out of its military adventures is more arms orders. The country is slowly being brought down by its own military–industrial complex, a risk which several US presidents warned against.

More fundamentally it is being brought down by its own economic policies: by its economic theories, such as the conviction that it does not matter how you acquire your money so long as you carry on consuming. The roots of this policy can be traced back to the development of the US financial industry, founded on a Federal Reserve modelled more as a private company with invested interest in the banking sector than as a State institution run for the benefit of consumers as the Fed and banks operate in close symbiosis.

All this has been conceived, constructed, and defended by economic experts from the various leading universities, not out of any ill will, but out of self-interest and ideological conviction. It is a financial system which has been exported to and adopted by all the Western countries in one form or another. It is a financial system which profits from lending people money which they cannot pay back, yet refuses them the right to default. When the banks go bust it is those same people who have to bail them out by paying higher taxes, when they are already in debt.

This seems to be the decisive factor which has led to US overstretch, and which now appears to be heralding its decline. Unfortunately it signals economic decline for much of the rest of the Western world too, and will lead indirectly to lower growth in Asia.

Man has always been occupied with the issue of competition; it seems to be part of human nature. We know that it is the nature of all other species as well, something we all have in common. Whether bee, whale, or human, competition is ultimately just the expression of our wish to survive and multiply. In other species this function is pre-programmed: part of their instincts. For us, human beings, it is expressed as individual and social choice, at any rate to some extent – less than we care to admit.

This perspective – Man’s free will – has been exaggerated within the social sciences from the first. We act very much in accordance with patterns defined by social, cultural, and genetic factors. Free will should be seen essentially as a goal, and hence as ideology. As propounded in the Western world, in its extreme form, free will is an illusion, and therefore a potentially dangerous notion, for it makes us less capable of understanding ourselves and the society we inhabit.

Agreed, it strengthens our self-esteem, makes us believe we are in control, and gives our life the meaning which we yearn for it to have. There is such a thing as free will, but we are more pre-programmed than we would like to think. On the other hand, the notion of limited free will ought not to leave us feeling failures when we understand our limitations. But at the same time free will ought not to make us feel superior to the other animals and to the very Nature of which we are part.

It would be better if we learned to think of ourselves as a part of Nature, as just another species with no greater right to survive than other living organisms that are needed to maintain a balance in the ecosystem. This biological perspective or insight has been largely denied to twentieth-century Man, occupied as we have been with our own superior qualities and rights. Unfortunately there are no “great games” that will lead us to grasp this in the era of geoeconomics. For this insight, we need to wait till politics gets the upper hand again. For the moment we are going in the wrong direction, and seem unable to do otherwise.

The conflict between Western and Asian values

Geoeconomics is gradually taking over from geopolitics. The shift was signposted by the onset of the process we know as Globalization (By globalization we mean the economic, social, technological, political and judicial developments that are leading to the sense we have of a smaller world and to increased contacts between people from different countries.

It is not the phenomenon in itself that is new – international business has always been a part of trade – but the quantity and extent of these activities.), a generation old now but still in its infancy, in which governments and governmental institutions have been discovering that they are no longer unchallenged key actors and overseers of world events (cf. p. 99 of the contribution by Wilhelm Agrell in Sigurdsson and Tagerud 1992). The process is the result of the end of the Cold War, and marks a shift of focus from political ideologies to economic realities.

The logic of geoeconomics has traditionally come in two varieties. One is government-driven, as in large parts of Asia –not only China and Singapore, but also Japan. The other variety is driven by private-sector corporations, as in most of the Western world, especially the USA. Nowadays it is less of a West versus East contrast than it was, as more companies are being privatized in China and many companies in the West have come under government control, particularly in connexion with the recent banking crisis. To complicate the picture further, what looks like a privately-controlled organization is often State-controlled in reality, since many governments are active investors and owners. China is a good example here, but so is Norway.

The concept of geoeconomics is not a new thing in the world. It can be traced back to the Chinese “Seven Military Classics”, including Sun Zi’s The Art of War, and to old Chinese strategies of non-military conquest, as when Sun Zi says that the highest excellence is to subdue the enemy’s army without fighting. Warfare is costly, in human lives, in resources, and in morale. It is not rational for a State to wreak destruction and cause human suffering. Rather, we want to control the competitor’s resources, if possible to get him to work with us and for us. This he will not do if he is defeated or outraged.

Our goals are more effectively achieved by setting our multinational enterprises to work, building economic strength and implementing economic control. This is what the Chinese are doing all over the world now, while the West is still locked in to the old geopolitical logic of military action, with roots stretching back to colonialism.

Geoeconomics as a strategy carried out on a global scale did not begin with China but with Japan, as that country developed after the Second World War. However, the Japanese over stretched themselves in the 1980s. Since then they have been in more or less permanent recession. They are an insular civilization which has lost interest in going abroad and learning about other cultures. It is said that even Japanese diplomats now often prefer to stay at home.

They never allowed foreign ownership of their land, but were forced to accept US military control as an aspect of their surrender at the end of the war. Hence the USA was always in a position to dictate terms in negotiations with the Japanese. In practice the USA never acknowledged Japanese sovereignty and always treated the Japanese as subordinates, and this explains why they systematically spied on the Japanese during trade negotiations (Solberg Soilen 2004). So long as Japan accepted this inferior position and was able to produce the goods the US needed and to lend them money, the relationship worked fine.

The new creditor, China, has no intention of reproducing such an unequal relationship. China knows that the USA is stronger, so the Chinese treat their greatest opponent as their best friend, while continually improving their own position, making the US an ever-larger debtor, ever more dependent on foreign loans. Only gradually will they assume the role of leading superpower.

Discreetly but quite rapidly China is building up its military capabilities, initially in the South China Sea and around its coasts. By building a superior military force China will push the US back step by step, preferably without any military incidents. The strategy is well described in the seven classic military books of China. The USA now needs China more than China needs the USA: that is the bottom line. Time will take care of the rest.

Not long ago China objected to US operations in the Yellow Sea as a response to increased North Korean aggression, forcing the US and its ally South Korea to use the Sea of Japan for planned manoeuvres. Slowly US naval supremacy in Asia will be whittled away. Eventually China will want to settle the Taiwanese question. Meanwhile the USA will continue to borrow money from China and waste it on a military strategy which works against the country’s competitive advantage and looks more and more like an irrational crusade.

Obama would like to leave Afghanistan, but his generals are resisting, at least unless they can get something else, like a build-up in the Pacific Ocean or a war against Iran. The fact is that the USA got locked into the arms race during the Cold War, and is now incapable of changing strategy. There are too many vested interests at stake. The executive power is weak, and political will has become entangled with large economic interest groups – particularly the military–industrial complex and the health care industry, which between them account for about half the federal budget. When the US Army goes to war today it is primarily because there are strong financial interests that suggest it should, to keep the military machinery going, rather than because it makes sense from the perspective of national competitive advantage. What is rational for the Army and the military complex becomes irrational for the country; thus the nation declines.

Another way to describe this logic is to say that the USA, and to a large extent Europe too, are locked into the rationale of geopolitics, whereas China and the other BRICs (Brazil, Russia, and India) have shifted to the logic of geoeconomics. It is not because they are weaker that the Chinese have chosen this strategy (though it is true that China will not be able to threaten the US militarily for decades yet), but because they are able to see more clearly and think further ahead.

Foresight is one of the grave weak points of a modern mass democracy. It is not that we are incapable of thinking ahead, but our politicians are not interested in implementing ideas whose outcomes will lie beyond the next election. Ideally this is the kind of longer-term insight we need social science to equip us with, so that we can prepare for the future; but the short-sighted logic of mass democracy extends even into academia, where it is setting the research agenda. Our socialscience scholars are not so much a body of independent thinkers, but have rather become technocrats at the service of the political establishment.

We who live in the West ought to question the perceptions we have of ourselves and of others as they relate to existing ideologies. The much discussed and criticized “end of history” is often interpreted as the end of one kind of history (not the end of history as a whole, a misunderstanding which led to much undeserved criticism): namely, history as competition between the values of two ideologies which shaped the world agenda for almost a century until recently –communism and capitalism, authoritarian rule and liberal democracy.

Many in the West seem to think that it was not the system of capitalism as an ideology that “won”, but the ideals it supports: in particular democracy, liberty, and human rights (The values of the Western world in the 21st century are an individualist version of the values of the French Revolution, with “brotherhood and equality” eliminated or transmuted into “respect for human life, equality between the sexes, the right to a fair trial”, etc. (See the European Constitution). ).

Others, specially in Asia, see things differently; they believe it was not these ideals that gave us victory, but what the ideals had shown they could produce, namely modernization and a higher standard of living for a majority of the population. The free-market economy will only find the broad support it needs for legitimacy in a democracy for as long as it can convince the public that it can respect, defend, and maintain these ideals. But the ideals will also need to lead to a better life, defined by most people today as a higher standard of living. People want to feel they are better off. If they do not, the likelihood is that we will seek other political solutions, other ideals, which may or may not involve democracy.

A political ideal, such as democracy, human rights, or greater liberty, does not necessarily lead to a higher standard of living. Our experience in the West, especially since the 1960s, has shown us that it may also lead to more bureaucracy, more government spending, a dependency culture, and eventually to lower productivity. With the current financial crises, many people in the Western world feel that they are now worse off than they were ten to fifteen years ago.

Masses of new voters who have been brought up to be irresponsible, demanding their rights but forgetting their duties, are putting great strains on the welfare state, which is no longer able to function efficiently. In this respect China with its continuous growth is showing us a different way, one that we are not yet ready to embrace: a renewal of the meritocratic model in a more pragmatic framework. Klaus Schwab talks about leaving capitalism as a political model and build a society more based on competence. This, and not authoritarianism or dictatorship, is the essence of the Chinese model.

It is a traditional Chinese model: those who rule are chosen from among the best pupils, are those that are best educated, who obtain the best results in national exams. Education in China does not mean over specialization, but a broad and deep general education. It is similar to the ideal which the Germans call Bildung, which is commonly mistranslated as “education” in English. Bildung is the process of developing a person’s Geist ,45so that he becomes a balanced and sensitive human being.

This kind of education is very different from what we offer our university students today in most parts of the Western world, where they acquire skills to fit specific job descriptions. Britain has for long been an exception, but its educated classes do not rule the private corporations, only parts of the bureaucratic sector. What has largely been lost in the West has prospered in the East. Go to the gardens of Suzhou and see for yourself: these properties belonged to the best educated, to civil servants, not to wealthy entrepreneurs or selfish businessmen. Or compare the education of leading Chinese political representatives today with those of our own national assemblies. Now tell me which society is more civilized.

The China that is developing today represents not a new political model, but resurrection of the old one. Indeed it was the same while China was guided by Marxism–Leninism: Confucian ideals always existed alongside the foreign ideologies. Mao adapted Marx and Lenin to the Chinese model, he did not simply implement their recipe unchanged. And it is the same for the free-market economy of today’s China. It is more likely to become Confucian than Western. There are many problems with mass democracy as it has developed in the West today. For instance, our system encourages the individual as citizen to focus more on what he can demand from society than what he can bring to it. That is, it speaks more about rights than obligations. Furthermore it is full of vague ideals and terms which are poorly defined. The chief producers of these terms are the new social sciences. These have failed to grapple with the notion of values, or virtues.

Thus our theories and research seldom help the individual to know how to behave in a given situation. We do not learn how to be “free”, or “democratic”. For that we need to learn about the virtues that can lead us to these ideals.

For a competitive advantage or for economic growth these values comprise: commitment, confidence, co-operativeness, courage, creativity, curiosity, encouragement, endurance, enthusiasm, excellence, flexibility, foresight, fortitude, honesty, imagination, industriousness, integrity, inventiveness, loyalty, obedience, optimism, patience, perseverance, prudence, purposefulness, respectfulness, responsibility, restraint, self-awareness, self-confidence, self-discipline, self-reliance, selfrespect, sensitivity, service, sincerity, tactfulness, temperance, tenacity, trustworthiness, truthfulness, understanding, wisdom, and above all hard work.

This has been true for all cultures in all times; but where do we learn this? Our social sciences today think they are too superior, too advanced, to deal with such unsophisticated ideas. Besides, they see them as “moral”, hence subjective, and the social sciences do not do ethics. That is for the humanities, they say, it belongs to the study of moral philosophy, they deal with the normative sciences. That is all very well, but in that case we have to accept people beginning to question the value of the social sciences.

Identifying these qualities as values not only helps us as individuals to know what to do, but makes it easier to evaluate the properties of different cultures, organizations, and individuals. It makes misunderstandings in conversation less likely, and moves discussion away from political ideologies, which are emotionally charged and traditionally – especially in the West –couched to a great extent in vague terms, using a diffuse language which we have been led to think of as a mark of higher education. In this respect one could argue that Europe and the West were better off when they only had religion, before we became lost in our political ideologies. But then our religions are of course themselves ideological in nature.

By focusing on values and virtues we could create a better democracy, or what is more important, a better society. Mass democracy no longer tends to foster these virtues, and it no longer guarantees a higher standard of living either. That is why most Chinese are content to live in what we in the West might call a semi-dictatorship, or a semi-democracy, depending on point of view. In the end the question is not so much about democracy versus lack of democracy as about what kind of democracy is best.

The Chinese political system has led to a higher standard of living for more people than what China could have achieved if it had conformed to a Western model and proclaimed itself a full democracy. Consider what happened to Russia after it allowed itself to be influenced by the IMF, the World Bank, and their experts.

When things started to go seriously wrong in Russia, when average life expectancy and the birth rate both fell while unemployment and insecurity increased, these institutions told the country that it had to take the nasty medicine in order to get better. In reality things did not start to improve until Putin destroyed the structures built by the oligarchs and their supporters and reintroduced more authoritarian rule. Authoritarianism did not in itself solve the problems, but it helped oust the perpetrators. It was the same story for Malaysia in the 1990s.

If conditions in Russia are now a bit too similar to the court of Ivan the Terrible, that is mainly because of the way Russians have learned to behave vis-a-vis their governors throughout their history. At least now they control their own destiny again, and the average citizen is starting to feel slightly better off. Most Westerners today believe there are no real challenges to our modern liberal democracy, that democracy and free trade fit together like hand in glove.

At the same time they see that the countries which are showing the way forward economically are ones we call “authoritarian regimes”, “hybrid regimes”, and “flawed democracies”, such as China, Singapore, and Taiwan. This should make us question our perception of the world. The chief reason for their progress has nothing to do with the ideological label we put on them, but with the virtues demonstrated by their populations.

We must start to ask ourselves about the quality of our own virtues. Is a more democratic society necessarily a more virtuous one? While we plan to retire early and prefer to stay at home and go out with friends, they go to work. While we are busy demanding our rights, they fulfill their duties. Ultimately, we are less willing to make an effort, while they take competition more seriously.

This does not mean that it is impossible to combine democracy with meritocracy. Japan and South Korea demonstrate that this is possible, and so did much of Europe in the decades following the Second World War. Neither is it true that our societies are consistently becoming less meritocratic. Rather, meritocracy seems to move in cycles. The British Army in the Napoleonic wars was known for having too many useless officers. Most of them had risen to their positions because of their rank in civil society, not because of their martial capabilities.

While we in the West have broad discussions which often lead nowhere in particular, they in the East have focus and persistence. Some discussion is always good, even essential, but too much is inefficient and counterproductive. This is the reality of the European Union today. If we are still doing well economically in the West, this is because we had a strong lead, and because our companies are powerful and function very much like the hybrid regimes mentioned above. It is not the fact that Asian societies or Western companies are command rather than free-market systems which causes them to succeed, but rather the degree to which this allows them to be shaped as meritocracies. While Western, and particularly European, democracies abandoned the meritocratic spirit which prevailed in our societies until the early 1970s, many nondemocratic

States went the other way and became more meritocratic, less oppressive. They are today becoming corporate States, in the sense, societies in which the interests of society and corporate interests coincide.

The current Chinese political system will probably prevail for another generation at least, perhaps even for generations to come. At the same time we may expect that the Chinese State will come into conflict with the interests of its growing middle-class population. To some extent this is already happening, first of all due to restrictions and censorship on the internet, blocking a great number of sites and most of the video material (The Great firewall of China).

Although the motivation for these policies can be seen to be noble, preventing crime and the over-sexualization of society by avoiding immoral content, it is questionable whether or not this policy will be effective. E.g. it is also hindering Chinese in getting updated on new technologies, making them less able to compete for Internet jobs. All of this is likely to modify the political model, but China will then be more likely to develop into a semi-democracy than into a Western-style full democracy with a comprehensive social welfare system.

More important, this transition is not bound to result in large-scale social conflict. There was none at the time of the major Chinese policy change between Hua Guofeng and Deng Xiaoping: it all happened without bloodshed. China’s politics rather are shaping up to be the “revenge of the meritocratic model”, even offering inspiration to the West as we are now forced to become more competitive. In many Chinese provinces and cities they are experimenting with locale direct democracy and the establishing of more elaborated welfare mechanisms to find their own balance. The consequences of the Chinese experiment will shape the politics of the future. They will decide how we reshape our own democratic model. Either that, or we shall decline.

In line with the evolutionary doctrine of Hegel and his American pupil Francis Fukuyama, we can expect that the wealth now being created in China, a country containing about a quarter of world population, will trigger a redistribution of power within Chinese society, just as it did in twentieth-century Europe. It is questionable whether this redistribution will go as far in China as it did in the West. Experience in the Western world suggests that, as a sustainable economic and political model, redistribution needs to be based on performance to function successfully.

Europe and the Western world will be forced to adopt a more strongly meritocratic model for their societies in order to compete with Asia in future. This means that we can expect the Western world to move more in the direction of Asian political models, and not vice versa. It could even be that Europe and the West will become more Confucian, in the sense more pragmatic, meritocratic and moral.

The real question is how far, and when, Europe and the West are going to take up the new competitive challenge posed by the BRICs, particularly China. If they do not, they will quickly lose ground. The toughest competition is still to come. China has already most of its modern infrastructure ready and its megacities will be fully developed and operational within less than a decade.

To avoid being overtaken by Asia, Europe may have to alter its political model in a number of respects, including everything from shrinking the welfare state to reducing the level of tolerance for crime and raising the levels of social responsibility and accountability in our societies. Following the logic of evolutionary theory, as expressed in the competition between societies, in the 21st century it will be the winner which imposes its values on the rest of the world, where winning is defined by a nation’s economic strength.

For the moment, and as a reaction to the momentum created by the apparent disappearance of all ideological challengers, the Western nation-state has given the market economy a free rein. The financial crises that hit the Western world in autumn 2008 did nothing to change that, despite the fact that they resulted directly from too much power placed in the hands of irresponsible bankers. For the moment we have no widely-accepted political solutions for our free-market problems.

Having lost the ability to take the initiative, we are waiting, hoping to ride out the crisis. The truth is that we are waiting because the answer is too radical to contemplate within our existing political paradigm. We need to reconstruct the entire banking system, separating casino banking from retail banking. We need to free the average worker from the burdens of his heavy financial outgoings. This implies a revolution of a sort; but it does not have to be a bloody one.

It is wrong to suppose that the Chinese want to become more Western. They want to become modern, meaning they want to share the same lifestyle that we enjoy via a process of rising material prosperity. They also want the same individual freedom that we have. For as long as the Chinese government puts restrictions on individual freedom a large number of those Chinese who can afford it will seek their luck abroad. Thus China stands to lose much of its talent.

This by itself will force the Chinese government to change its policies. The main thing that will lead to a better life is more trade, and no one has understood that better than the nations of Asia today. It is as if this lesson has been forgotten in the West, entangled as we are with the rhetoric of the current social sciences, which ultimately just shifts us ever further away from the competitive mind set.

Many of the notions which make up a nation competitive seem almost to be too simple for the modern social scientist to engage in, ideas like increased trade, more savings and a better work ethics. For the past few decades Asia has been selling products to the Western world with money we have borrowed from them (just take a moment to reflect on that “business model”). What looks like an obvious recipe for disaster has met very little criticism.

Few academics, in particular economists or political scientists, have warned against this development. Why not? The only reasonable explanation is because we academics ourselves are entangled in the same logic and profit from this same system, in the short run at least.

A standard academic response to many commonsense views, such as the idea that the economic pattern just mentioned is perilous, would be “There haven’t been any studies done on that, so far as I know, so I can’t say”. And it is true that everyday life is full of problems that have not been treated in scientific papers. The reason for that is that social situations are rarely identical; differences between them are sufficient to make most existing research inapplicable. These studies are too narrowly defined, so that we cannot use them to draw conclusions about what we see.

We ignore the fact that we have gathered experience about the world through individual observations, and that we can use that experience with some critical thinking and a few syllogisms. Instead we have learned to tell ourselves that anecdotal experience is biased, subjective, unscientific. Western governments do not typically sponsor studies that question governmental action.

Our research policies are primarily shaped to support existing political ideas. The doctrine of political correctness takes care of the rest, inducing researchers to align their topics with directions that will enhance their careers and to contribute beautifully-written articles to approved academic journals, where approval depends largely on government policy.

For a modern academic career, writing monographs or books counts for little. It is commonly regarded as a waste of time, because it diverts time from activities that carry more academic brownie points. Books are at best seen as a contribution to pedagogy. This scale of intellectual priorities would have been almost incomprehensible to Europeans before the Second World War. In those days, moreover, scholars kept up to date on academic contributions from Continental Europe, from French and German universities. That has all changed. Today the English-speaking

academic world, in particular the American, has been set up as a standard, a measure for all serious achievements. If a paper does not consider recent English-language contributions then it is “not up to date on theory” and will not be published.

The tradition of geopolitics and geoeconomics , like the tradition of critical theory, is different because its roots lie in the Continental European intellectual tradition, which favours critical discussions, based on the study of history and philosophy. If we are experiencing a renaissance of geopolitical thinking today there are good reasons for this. There can be no understanding of international relations without a clear real political analysis of events.

At the same time, there are social-science academics who are trying to bury the field of geopolitics (See for instance Fettweis (2003: 123): “great power-strategy a la MacKinder, Spykman, Mahan, and Brzezinski, is obsolete”). Although the subject was considered pretty much taboo for decades after the Second World War, it has continued to exist and prosper (see e.g. Carlomagno 1997–8: 5–6). Geopolitical doctrines simply changed names.

The Truman administrations talked about the Truman Containment Doctrine, and the Eisenhower and Kennedy administrations talked about the Domino Theory. Both were based on geopolitical doctrines. Foreign-affairs advisers to American presidents from Kissinger to Brzezinski have always had astrong interest in geopolitics. If geopolitics is in fashion today this is not because it has suddenly acquired a relevance it did not have before, but because it has now become acceptable for academics and practising politicians to discuss it.

The problem with earlier geopolitical theories, developed by men such as Friedrich Ratzel, Alfred Thayer Mahan (1840–1914)( A naval officer, Mahan was one of the first American military strategists. He and Julian Corbett (1854–1922), professor at the naval war college, advocated the theory of naval superiority which corresponds to the current American military position, unchallenged in all oceans),Rudolf Kjellen, and Halford Mackinder (1861–1947),( Mackinder is considered one of the founders of geopolitics. He was a geographer, and became a professor at Oxford in 1887.

In 1895 he moved to the London School of Economics, which he headed over the years 1903 to 1908. See Mackinder (1919)) was not their geographical analyses, but the political implications or “necessities” some people inferred from those analyses – and in particular, of course, the consequences which ensued when a certain Austrian painter entered politics and put some of these implications into practice. Many blame the German political system for that. Fascism and Nazism only became possible thanks to the modern democratic political model adopted by the Weimar Republic, between 1918 and 1933.

The elites in Germany in general abhorred the Nazis, just as they were critical of mass rule; but they were forced to accept the Nazis’ newly-won political legitimacy. In the end they also had to accept Nazi influence over the army, though the military elite set one condition, that the SA is kept out of military affairs.

The army was composed of professionals who did not want Hitler’s rascals among their ranks. In what has been called the Night of the Long Knives Hitler then decided to eliminate his old drinking buddies in the SA, who were aspiring to higher military positions. Unfortunately the army had no objections to Hitler’s praetorian guard, the SS. If they had to take orders from the Nazis, the army thought, at least they would be left alone to manage the war themselves.

Spurred on by German successes on the western front, Hitler began to imagine that he had special strategic abilities. His increasing meddling in military affairs soon became fatal for the German army on the eastern front. To make things worse, behind the regular army Hitler sent his new SS elites to implement his ideas about Lebensraum, territory where the German people could multiply in order to achieve a certain critical mass in Europe. This was a geopolitical doctrine straight from the textbook, but the textbooks did not condone massive use of violence – and did not warn about the consequences of failure.

When the project failed, the Russians turned round and visited the same pain on the Germans as they had seen the SS inflict in the east. The consequences for German civilians, especially women, were devastating. The geopolitical idea of Lebensraum had turned into a tragedy for everyone.

One can view this episode in German history as a clash between meritocratic and democratic structures. Hitler would not have come to power if he could not get control of the army, and that could not have happened without the legitimacy provided by the modern democratic system.

That does not mean that moving towards ever greater democracy is a wrong direction to take, but it does have consequences which can de stabilize a country and make it less competitive. We see the same rabble getting into politics by the backdoor all over Europe today, even in Norway (Fremskrittspartiet), Sweden (Sverigedemokraterna), and Denmark (Dansk Folkeparti). In consequence there are now a growing number of fascists and right-wing extremists in the European Parliament. The movement is already threatening to get a grip in Southern Italy, the Netherlands, Hungary, and along the Cote d’Azur. As always, fascism is appealing to the less educated classes.

That should lead us to question the consequences of giving the vote to people who are so clearly unwilling to accept their social responsibilities, but regardless of education. For society to work properly there must be a balance between rights and duties. The lack of such a balance has made much of the Western world less competitive today.

The workers’ movements had the best of intentions and many good arguments when they demanded more rights at the beginning of the twentieth century, but demands for ever greater rights have subsequently spawned the overgrown, inefficient welfare state we see today, in which part of the population sets out to outwit the social-insurance system and other State institutions intended to help all citizens. The economic consequences of these abuses have in turn led to growing support for right-wing mobs.

For decades after the Second World War it was unthinkable to discuss geopolitics in Europe. In France it was otherwise. The subject prospered there more than anywhere else during the Cold War period. Early translations of German geopoliticians such as Ratzel and Haushofer helped to foster growing interest in geopolitical and geoeconomic matters (Haushofer’s Zeitschrift fur Geopolitik started in 1923, ceased publication in 1944, but reappeared in West Germany in 1951 as a conservative journal of international affairs. It survived until 1968. Karl Haushofer (1869–1946) was much influenced by Ratzel, Mackinder, and Kjellen; see Haushofer (1924)).

This paved the way for a number of French intellectuals to contribute to geopolitics, for instance Gerard Chaliand, who pioneered the use of atlases to display political and economic ideas in the 1970s and 1980s (see Chaliand and Rageau 1983, 1997, Chaliand 1990). He also received attention in the USA. The New Right, led by Alain de Benoist, was heavily influenced by geopolitical thinking when he defined his political agenda in the 1960s and 1970s and when he founded the journal Nouvelle Droite.

Yves Lacoste gave his journal Herodot, launched in 1983, the subtitle Revue de Geographie et de Geopolitique. Lacoste is considered a father of modern geopolitics. France never felt itself to blame for what the study of Geopolitics had led to, so there was no pressure to taboo it. There were plenty of criticism against the study from the French left, but France always had its heroic military tradition to preserve, much inspired by the visions and actions of de Gaulle.

France has also always felt independent of Anglo Saxon thinking, even opposed to it. In recent decades France has also been openly opposed to its economic interests and what has been felt as interventions. As a consequence the new economic competition, whether coming from the US or from China, has been christened “economic war” (cf. Coulomb 2003), a metaphor which is still unthinkable in Germany.

Over the past decade, and especially since 9-11 and the start of the new confrontation with the Islamic world, geopolitical ideas have returned to the fore. Two generations traumatized by the Second World War are passing away. At the same time the problematic aspects of the subject are not resolved. Their lessons must not be forgotten.

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