Art Economics Low Politics Decline Political Theology Power Geopolitics



Much is afoot in international markets, this much is obvious. Between existing inflationary pressures to supply chains, fiat currency printing, and financial market troubles in regional markets (notably China’s property sector, and Turkish currency devaluation), there would already be a bumpy few years in our collective economic future. Then the war in the Donbas heated up into a Russian invasion, and suddenly Russian and Ukrainian markets are functionally cut off from the global markets. In the process of de facto blockading Russia, the US and Europe have demanded that the world reciprocate and refuse to trade with Russia as well, and much of the world declined to do so. Indeed, many seem poised to pivot into a state of either alignment or neutrality towards a hypothetical second pole in foreign affairs.

The surefire members of this new order are not tremendously imposing; Russia, Belarus, whatever Russia-aligned entities may or may not emerge from Ukraine, Syria, a few mostly unrecognised republics, and a few other states in some kind of state of looser alignment; Kazakhstan, Kyrgyzstan, Tajikistan, Armenia — the members of CSTO; possibly Iran, and Cuba, and perhaps North Korea and Venezuela in some capacity. This is not a decisive coalition, but what ought to be concerning – are the countries who seem to be seeking to be a neutral party between this new bloc and the established West. These include India, China, Saudi Arabia, UAE, and plenty of others who are – for one reason or another – not fully committed to the US-led system. However, as many of these countries represent either producer or supplier nations in some significant capacity, some assumptions seem set to be upended.

As has been much reported, Russia and Ukraine contribute around 25.4% of global wheat exports, and Russian energy exports dominate European markets for natural gas. Imports of these kinds range from the catastrophic in Germany (55% of natural gas used), to the apocalyptic (Latvia imports 90% of its natural gas from Russia). In total, 40% of Europe’s natural gas comes from Russia. As such, this looks set to not merely be a question of raised prices, it might well be a matter of keeping the lights on at all. This sort of question has not been on the minds of many western planners for quite some time, so they have been able to busy themselves with questions of ‘how’ not ‘if’, which can more heavily weigh politically popular but inefficient technologies like solar to take hold in decided inappropriate climes. In theory, this would facilitate more energy independence, despite being expensive, but therein lies the rest of the problem. Much of the rest of industry and mining has been exported for similar reasons. Why pay the price of domestic emissions when they can be exported – out of the prying eye of voters. No need to worry about water pollution, ugly blots on the landscape, and belching factories when they’re overseas, and we get to enjoy the fruits regardless.

Much of geoeconomic, and indeed modern economic, theory has leaned into these trends. To leverage educational and productive advantages to specialise in high-value-adding industries and fields which require fairly minimal upfront investment costs, and provide many ‘cushy’ jobs with highly desirable working conditions. Design, finance, and marketing/advertising are probably the gold standard in this regard. By doing this – they can exert more market power, with their superior negotiating position, by outsourcing and subcontracting the low-skilled low-value-added components of the supply chain to elsewhere in the world. Combining that with ethical concerns around climate change makes it even starker so that only Green high-skilled services jobs are actively cultivated. Not in the absolute – it must be said, as the West also continues to cultivate defence industries and some other niche industrial pursuits, but they’ve retained little interest in maintaining robust agriculture, basic heavy industry, mining, or even energy supplies usually. Certainly not enough to supply their economies if required. The expectation is that most of these areas are easily substitutable in a stable global market – one producer in India, China, or Vietnam is much like any other. While the designers and main markets exist in the West, the ball is in their court to outsource at their leisure. Perhaps less so if the global market ceases to be global, and is no longer stable. The question ceases to be one of ‘how’ they will acquire what they need, and becomes ‘if’.

A tradition of economic patriotism insulates France from this somewhat, and the US is so replete with resources of all sorts that they will have little trouble meeting their needs providing governance doesn’t actively hamper them. Most others seem set to suffer in some capacity. The reality of this situation has certainly dawned on India, who have already (at time of writing) bought oil from Russia in a Rupees to Rubles exchange, in contravention to petro-dollar norms (perhaps heralding its end, but for now it’s too early to say for sure). They seem set to continue trade relations regardless of what the West thinks, not least due to Indian reliance on Russian fertilizer production – vital for the politically sensitive agricultural sector. They are seemingly more conscious than most that the remaining global market – should Russia be as heavily sanctioned as many want it to be – will drive prices so high that many who are already on the edge of being able to afford such things, will be the first to be deprived, while the West largely absorbs the cost into their margins, or so goes the theory. In practice, capacity is relatively finely tuned for needs when it comes to pipelines, liquified natural gas storage, and power generation capacity. Simply buying more shipments of gas at a mark-up is not enough to ensure that it will be available readily to convert into electricity. Whatever the time-lag is between these facilities coming online, and deprivation of their normal energy sources, is the time where the power grid is unable to keep pace with demand, potentially shortening working weeks, causing rolling blackouts, and generally stifling industry. In this context, the Saudi opportunism to seemingly maintain relations with Russia and China – rather than standing by the West and US paints an ominous picture of the future. With the West collectively boxed into the service economy space, and with much of the total industrial and raw material throughput of the world becoming ever more distant, planners perhaps ought to be questioning whether the consequences of the previously mentioned transitional shortages might become more widespread. And if it should ever come to affect food – that is when the true catastrophe will kick in.

In an environment where the open market may not fulfil every demand, on-demand, the hierarchy of desirable industries changes completely. A surplus of food is necessary for a healthy, and content population capable of living, working, and consuming additional products. A surplus of energy is necessary to leverage capital to increase human capabilities beyond simple manpower. A robust base of heavy industry is required to attain low prices on necessary component goods for more complex manufacturing, and all of these require a constant flow of facilitating materials – usually dragged up from the earth. Bankers, product designers, advertisers, and graphic designers are far from totally useless in this equation, but their value and the leverage imparted by them is vastly reduced in this scenario of outright scarcity. Conversely, the lowly farmer becomes the stepping-stone to all economic development, and maximising his yields becomes a worthy task of some of the greatest minds available. So too bringing the earth’s bounties up from wherever they might be, then refining them, and working them into a base material. Only then can the designers return to their old roles. Failing some part of this – one of three options remains, either search for a reliable bilateral partner to provide for some specific shortfall, attain what one can from the oversubscribed global market, or bring the resources under one’s own power – most likely via a proxy. Thus; in the quest for peace, we may spark war, and in the quest for growth, we may spark destruction.