Friedman’s top five events of 2014

In a season of lists, George Friedman, Chairman of the global intelligence company Stratfor, has made a list of his top five events for 2104.

1: Europe’s Persistent Decline

The single most important event in 2014 was one that did not occur: Europe did not solve its longstanding economic, political and social problems.

Europe, taken together, remains the world’s largest economy and a centre of global commerce, science and culture. It’s inability to solve its problems or make any significant progress has the potential to disrupt the world system. There is general economic malaise and huge unemployment in the south.

Friedman tends to think that if Europe’s problems were soluble then they would already have been solved. He notes the rise and rise of anti-EU parties. In the coming Greek election a party favouring withdrawal from the EU may “become a leading power”. As Europe redefines itself we could all be affected.

2: Ukrainian and Russian Crises

Historically, tensions between Russia and the European Peninsula and the United States have generated both wars and near wars and the redrawing of the borders of both the peninsula and Russia.

The Ukrainian crisis has opened “a new and extended confrontation between the European Peninsula and the United States on one side and Russia on the other.”

At the same time the Russian Federation is internally unstable, which is likely to become critical in the long run.

While he does not expect Russia to collapse, nor the Ukrainian crisis to evolve into a broader war, the destabilisation of a country with massive nuclear capability is a concern to everyone.

3: The Desynchronization of the Global Economy

Europe is predicted to see little to no growth in 2015, with some areas in recession or even depression already. China has not been able to recover its growth rate since 2008 and is moving sideways at best. The United States announced a revision indicating that it grew at a rate of 5 percent in the third quarter of 2014. Japan is in deep recession. That the major economic centers of the world are completely out of synch with each other, not only statistically but also structurally, indicates that a major shift in how the world works may be underway.

Economic theory is no help. All we can say is that the world is full of things that need explaining.

4: The Disintegration of the Sykes-Picot World

Sir Mark Sykes and Francois Georges-Picot were British and French diplomats who redrew the map of the region between the Mediterranean Sea and Persia after World War I. They invented countries like Lebanon, Jordan, Syria and Iraq.

The fragmentation and the crippling of national governments matters more than Islamic State.

Syrian President Bashar al Assad is just a warlord now, and the government in Baghdad is struggling to be more than just another faction.

All this matters less than it did 40 years ago, when the Middle East dominated oil supply. Turkey is the only force with a prospect of stabilising the region, but it currently lacks the capacity, even if it wanted to.

5: The birth of Friedman’s grandchildren

Two more grandchildren were added to Friedman’s progeny. Life goes on in myriad particular and personal ways.

Some random comments

Intrigued by Friedman’s complaint about economists, I took a quick look at Immanuel Wallerstein’s commentaries to see whether any address the issue directly. They don’t, more is the pity, since he’s been writing about the instability of the world system for over 40 years. One intriguing piece is very relevant: “The Center Isn’t Holding Very Well”.

Wallerstein says that it is natural to assume that elites acting politically are in control. The assumption is that things work in a top-down political manner in each country.

This seems to me a fantastic misreading of the realities of our current situation, which is one of extended chaos as a result of the structural crisis of our modern world-system. I do not think that the elites are any longer succeeding in manipulating their low-level followers. I think the low-level followers are defying the elites, doing their own thing, and trying to manipulate the elites. This is indeed something new. It is a bottom-up rather than a top-down politics.

So what we do in local action matters, to us and potentially on a broader scale.

However:

As our existing historical system is in the process of dying, there is a fierce struggle over what kind of new historical system will succeed it. Soon, we may indeed no longer live in a capitalist system, but we could come to live in an even worse system – a “rough beast” seeking to be born? To be sure, this is only one possible collective choice. The alternative choice is a relatively democratic, relatively egalitarian system, also seeking to be born. Which one we shall see at the end of the struggle is up to us, bottom-up.

Meanwhile individual powerful actors can be important within broader trends. Wallerstein has commented on the importance of Germany and Angela Merkel in particular, at least for a time. For example, Merkel and Putin are both fluent in German and Russian and have spoken over 40 times about the Ukraine crisis. But influences can go beyond personalities. Commenting on Ukraine back in February, he points to a long-term Paris-Berlin-Moscow axis because of mutual interest, but it also gives France and Germany greater independence from the USA. Sanctions against Russia have a sunset clause, and it’s possible that over time Germany and Europe may allow them to lapse.

5 thoughts on “Friedman’s top five events of 2014”

  1. Europe is a case study in the problems of running a group of countries with a shared currency, no trade barriers and no shared responsibility for government expenditure.

    Europe might resolve its problems by becoming something like the Australian federation. Lots of centralized economic management, welfare etc, the ability of people to move around to change jobs and a shared language.
    Or you could look at what has happened in Spain as a case study of what happens when protecting banks from their collective stupidity becomes more important than protecting the people of Spain from the collective stupidity of the banks.
    Or perhaps you could use it as a case study of what happens when free trade agreements force countries with a burgeoning debt to keep buying foreign goods.
    Or……….
    It all has implications re world financial management.

  2. It is worth remembering that the Ukraine crisis started when a Ukrainian president who had the support of Russian speaking “Ukrainians” was driven out of office. To make matters worse, one of the issues underlying the conflict was a desire of the Ukrainian speaking section of the country to join NATO, a long term enemy of Russia. It is also worth remembering that two of the key members of NATO (Germany and France) invaded Russia in the not so distant past.
    In addition, attempts by the Ukrainian government to retake the Russian speaking part of Ukraine have resulted in many civilian deaths.
    Which is a roundabout way of saying that Russian speakers will see the conflict very differently to Ukrainian speakers and their supporters in the west. It is worth noting that support for Putin in Russia has gone up despite the damage that sanctions are wreaking in Russia.
    On the other hand what Russia is doing here is similar to what the Nazis in the sense that concern for Russian/German speakers is being used as an excuse to attack other countries.
    The challenge for the west is to discourage future mini invasions by Russia against past members of the USSR without strengthening Putin or encouraging hostility by the Russian people to the West.

  3. Good points, John D.

    Perhaps 2014 was the year in which Australia, because of its continuing and uncaring refusal to stop the export of climate-change causing minerals, brought sanctions, embargos and boycotts down on itself. Wonder if we will surpass North Korea and win the crown of the World’s Most Hated Country?

  4. Unemployment in Japan was 3.5% in August. Not bad for a country in deep recession. On the other hand overtime has dropped The link argues that overtime is a better guide to what is going on in Japan because Japan is an advanced country that deals with shortages of work by cutting hours, not people.
    Wikapedia provides a list of unemployment by country.
    While there are times, like the GFC when countries appear to move in sync what happens most of the time depends, to some extent on what is going on with a countries internal and external markets.
    Australia’s surge in dependence on external commodity markets means that we could be in for a more cyclic future. Back in the good old days when Australia hid behind tariff barriers and banned export of key commodities like iron ore it was noticeable that Australia was little affected by world events and unemployment tended to stay below 2%.

  5. So many conflicts are the result of people like Sykes and Picot setting up the wrong boundaries for new countries. As rulers the colonials liked setting up colonies with internal divisions that would encourage factions to support a colonial government that would maintain peace and stop other factions becoming prominent.
    However, when setting up new countries future stability requires either the boundaries match the old territory of a tribe or the new country contains so many tribes that no-one is strong enough to even look like dominating and democracy seems like a logical way to go.
    In terms of setting up a stable country combining Kurds, other Sunnis and Shias in the one country doesn’t seem real smart. Particularly so when each of these groups are concentrated in particular areas. Jordan was a smarter idea.
    Of course, the dominant destabilizer was setting up Israel. The sheer arrogance of the Balfour agreement and Europe’s decision to assuage European guilt by giving away land that belonged to the Palestinians is mind boggling.

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