Commentary / World

Where power now really lies

by David Howell

Everyone says it so it must be true. U. S. President Donald Trump is the most powerful man in the world. He is either a catastrophe or a liberator, depending on your viewpoint, but the United States is the decisive superpower — it must be so because the Americans spend more on military force than the next eight major countries combined. Such is the conventional, prevailing, all-pervasive wisdom in almost every capital round the world — and it is wrong.

It is wrong because there are today much bigger forces at work and shaping our destinies than governments, however large. It is wrong because Trump is largely a prisoner of realities, restraints and events far outside his control. It is wrong because in a world of massive and growing networks no one state can be the superpower. It is wrong because in modern trading conditions national protection does not work. It is wrong because massive military spending, with more missiles, more tanks, ships, gadgets and manpower, does not bring victory the way it used to.

It is wrong because government hierarchies everywhere are seeing power flow away into the hyper-connected web of information flows and the world-wide web. And it is wrong because, anyway, decisive power and leadership, both economic and political, is moving away from the West and the North of the planet, to the East and the South and in particular to the dynamic societies and motivated billions of increasingly well-educated and skilled peoples of Asia. Indeed it has already done so.

So, sorry all you Washington gurus and journalists who are obsessed by every move and tweet from the White House, and sorry all you Western experts in other capitals who are preoccupied with the latest Trump words and comments. You are looking in the wrong place, and at the wrong events and developments if you really want to interpret, and help guide, the way the world is going and the forces, pressures and dangers that are really going to re-shape our lives.

The full nature and influence of what has been called the Fourth Globalization does not yet seem to have been fully absorbed. The first point is that no government or authority can halt it because it is driven by people and connectivity between them on a scale unimaginable and unparalleled in human history. Wise rulers and authorities can recognize and prepare for its impact with skillfully crafted policy adjustments. But what they cannot do is stop the process, or put up elaborate protectionist barriers against it — which will simply be swept away.

The second point is that as a result of the collapse of the costs of information, communication and technology transfer three centuries of Western superiority, not just in economics and technology, but in social organization, are ending.

This is not to question that the U.S. remains a free economy of immense strength and influence within the changing world system, but just that its leverage within the hyper-connected network and a much more distributed world economy is different from what it used to be and from what many Americans still mistakenly imagine it to be.

For examples of that look no further than the way in which the world’s biggest trade expansions and investment projects now have an Asian focus and in some cases are developing separately from America altogether. Thus the king of Saudi Arabia, on his tour of Asia a few days ago, put his signature in Beijing to deals and projects of no less than $68 billion. And it is of course to Asia that the overwhelming bulk of Middle East hydrocarbons, and now capital flows, now go.

Towering over this there is the whole gargantuan “One Belt, One Road” scheme aimed at weaving together the economies of Central Asia and enlarging trade routes from China right through to the Levant and up into Central Europe — probably one of the biggest international investment undertakings in history and involving resources of a size almost beyond human grasp, well into the trillions of dollars.

Another sign of shifting power is that when the Trump administration ducked out of the Trans-Pacific Partnership some expected that to put paid to the whole idea. But on the contrary, the TPP countries simply formed a new grouping — without the U.S. and now probably with China involved instead. Meanwhile, the balance of shares in world output and in trade continues to shift away from Group of Seven countries and toward the developing nations. Since 1990 the rich countries’ share of global GNP, which peaked at 70 percent, has slipped back to less than 50 percent — about the level of 1914.

Both the U.S. and Europe — the Atlantic duo on which U.S. President John F. Kennedy placed such high hopes in the 1960s with his Grand Design — are now being pulled both ways. One way is to join, and benefit fully, from this new phase of world growth, driven by connectivity and maximum trade openness, even though it is no longer Western-led. The other is to try crouching behind tariff walls and attempt to hide and disassociate from the megatrends of the 21st century.

Trump has tried to go this way, but he will of course fail, and just as well. The efforts at the recent Group of 20 meeting of his new treasury secretary, Steven Mnuchin, to defend trade protection will meet the same fate. The European Union also, with its single market, still puts its faith in protection by an elaborate structure of tariffs, non-tariff barriers and regulations against the outside world. But that, too, is being increasingly outmoded by the revolutionary trade patterns and trans-global supply chains advancing on all sides. The United Kingdom’s free trade impulses and Brexit decision are already set to blow a big hole in the crumbling single market edifice.

On both sides of the Atlantic forces bigger than governments or their trade protection policies are hard at work, dissolving old barriers. They will shortly become both stronger and yet more visible — and so will the substantial limitations on the power of the White House occupant to change the course of history, technology or the future.

David Howell is a British Conservative politician, journalist and economic consultant. He is chairman of the House of Lords International Relations Committee.