About the author: Marc Chandler is chief market strategist for Bannockburn Global Forex.
America’s geopolitical rivals pretend it’s in decline. Democracy with it.
Russian President Vladimir Putin wants the US and Europe to admit that Ukraine and Georgia will never be allowed to join the North Atlantic Treaty Organization. Perhaps another piece of Ukraine will be taken. Meanwhile, China is harassing Taiwan. Many fear that China is preparing for an invasion. The way the US is withdrawing from Afghanistan, its relatively poor handling of the pandemic and bitter partisanship are driving the rumors that America is playing checkers while the others are playing chess.
Can we become banal or banal? Democracy is always messy. The ancient Greeks and classical political philosophers did not think that the rule of many was lasting. Therein lies the American contribution to politics. In Federalist 10, James Madison outlines the view. The way a representative government over a large area can survive is by creating the conditions that stand in the way of a permanent majority.
When America was founded, only white men with property were allowed to vote. State legislators elected senators. Recently, voting rights were extended to 16-year-olds in parts of Europe and to 17-year-olds in the primaries of some US states. New York City gave about 800,000 non-citizens the right to vote in local elections.
Yes, there is a push to restrict voting rights in many US states. Previously insured gains can be recovered. The protections of the 1965 Voting Rights Act are put to the test, as are the rights recognized in Roe v. Wade. But rather than a repeat of Jan. 6, the more likely scenario, according to polls, is for the Republican Party to win both houses in November as independents and suburban households shift.
Depicting global competition as one of democracies against authoritarian regimes seems to obscure conflicting national interests. Imagine if the dissident Alexei Navalny became president of a democratic Russia. Could he accept Ukraine or Georgia joining NATO? Chinese President Xi Jinping appears to have reversed much of Deng Xiaoping’s political and economic reforms, but could a Chinese leader accept US troops in Taiwan? The US must distinguish between geographical self-interest and the specific regime of a competitor or adversary.
The countries that do not meet the American standards of democracy are not a homogeneous bloc. Almost all that Russia and China have in common is their distaste for a world still dominated by the US. China’s Belt and Road Initiative penetrates the former Soviet Union. When NATO consolidated the West, China entered Central Asia. Meanwhile, Russia continues to sell weapons to India, much to the dismay of the US, which is trying to integrate India into its efforts to control China. India will use those weapons to aid in border battles with China and Pakistan.
For all practical purposes, the US has ruled out a direct military response to a Russian invasion of Ukraine. Instead, it threatens sanctions. Some could take drastic measures, such as banning trade or ownership of Russian sovereign debt, sanctioning the major state banks and limiting dollar and ruble transactions.
On the other hand, the US threatens to change the status quo in Taiwan as much as Beijing does through its aerial harassment campaign. Last month, a Defense Department official told a Senate committee that Taiwan is of strategic importance to the security of the region and to the defense of US interests in the Indo-Pacific. President Joe Biden made several recent comments that needed to be reversed or clarified. His mistakes were always in the direction of a stronger defense of Taiwan.
China can give up its nuclear strategy with minimal deterrence. If so, it’s overdetermined. As China gets richer, it seems “natural” to expand its armed forces. Unlike the US – where even in an age of hypersonic weapons, the two oceans offer it protection that few other major countries have – China is in a dangerous neighborhood. North Korea and India have nuclear weapons and Iran may not be too far from joining the nuclear club.
From Beijing’s perspective, the US’s aggressive stance on Taiwan and its explicit attempt to build a coalition to contain China means that a stronger nuclear presence will minimize the risk of being dominated by China. an escalation ladder in the region. In addition, the development of US missile defense requires that everything that was previously a minimal deterrent is now slightly greater. Suppose China acquires the nuclear warheads that the Pentagon is now projecting, and the US does not increase its troops. America will still have four times more nuclear warheads.
The concentration of income and wealth poses social and political challenges in the West and China. Under Covid we have seen how poverty itself is a comorbidity. The security of private data also raises important questions, regardless of a country’s political structure.
A wide range of accommodations are available. But elites, whether elected or not, must provide better lives for more people, or else they will end up being rejected. Security in Europe remains a delicate balance, but no more than Berlin was for a generation: a divided city in a divided country on a divided continent. Not ideal, but possible to avoid what could have been a nuclear war.
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