Great Industrial Power Rivalry: Jake Sullivan’s Security Dilemma (I&W)

Great Industrial Power Rivalry: Jake Sullivan’s Security Dilemma

When scholars analyze the relative power of states, they tend to look first at military and economic power, especially industrial power, and perhaps adding resource endowments, demographics, and features such as warm-water ports at a later stage. The non-military aspects tend to be subordinated to the military ones: industrial production of warplanes is more important than production of toys; resources such as oil and iron are more important than timber now that warships are not made from wood; warm-water ports are important not for winter fishing but for the projection of naval power. This analytical tilt toward military power makes a rough sense. When great powers clash, the hard-power victory will come first, before the soft-power one.

But the US-China rivalry is upending the typical modern ways of understanding major-power conflict that emerged after 1800. The definition of “strategic” industry is expanding daily. In just a few years, it has come to include pretty much anything having to do with micro-electronics and digital communication. The crucial change has been that states no longer worry just about industries or technologies that have clear military applications. They now worry about industries that might possibly be relevant to military power and therefore to national security. The classic “security dilemma” taught at universities — that actions taken by a state to increase its own security cause reactions from other states, which in turn lead to a decrease rather than an increase in the original state’s security — is now being applied, in practical terms, to a growing share of certain national economies. More and more resources, from human capital to video apps to venture capital, are becoming “strategic.”

This is a new world, one that multinational businesses have begun to notice but are hardly ready to face.

If one wanted to ascribe this gradual “securitization” or “militarization” of major economies to the actions of individuals, two come to mind. The most obvious and the most important is the President of China, Xi Jinping. However, the National Security Advisor of the United States, Jake Sullivan, has also played a key role in shaping this fundamental change. 

Xi Jinping’s “Made in China 2025” program, which was launched in 2016, was and is an attempt to make China as self-sufficient as possible. The alliance-building of the “Belt and Road” Initiative, the weaponization of Chinese ethnicity outside China, the opportunistic use of non-Chinese intellectual property and foreign investment, the “nine-dash line” drawn to encompass resource-rich seas, and much else all point toward the same goal: a China self-sufficient enough that it can say no to the rest of the world if it likes, especially to the United States. Chinese autarky makes little sense in terms of the social science of economics, but then mainstream economics since Adam Smith has never known quite what to make of security-driven economies, except to say that they are inefficient and probably lead to war. Furthermore, China is run by Marxists, for whom mainstream economics is seen as at most a useful tool-kit for struggle rather than a gospel of human development.

China’s weaponization of its own economy under Xi Jinping has made the security dilemma economy-first rather than military-first. That choice has caused a security reaction from the United States, one that certainly does seem to be causing a decrease rather than an increase in the original state’s security.

The US reaction is where Jake Sullivan comes in. It is true that the hardening of US economic policy toward China began during the Trump years, mainly because of the Trump administration’s focus on national economic greatness. The theory of great-power conflict, rescued from history books by Trump’s security team as a framework to constrain an inexperienced and mercurial Commander in Chief, also preceded Biden’s presidency. But the Biden administration has developed its own theoretical framework for foreign policy that reconfigures, refines, and solidifies the tendencies first seen in the Trump years.

Jake Sullivan was the young and well-liked Director of Policy Planning at the State Department under Hillary Clinton and President Obama. In the Trump years he was head of a program at the Carnegie Endowment for International Peace that aimed at developing a “foreign policy for the middle class.”  

American political culture — for good reasons and with great success — has tended to see anything that benefits the middle class as positive. The nurturing of a middle class has been among the greatest achievements of American democracy. Nonetheless, the deliberate rooting of national security policy in the fortunes of a particular social and economic class is something rather new for a non-Marxist and non-aristocratic society.

The reasons for this shift are many. Probably the most important has been the perception that liberal or neoliberal policies, grounded in a theory of market fundamentalism and globalization, led to a hollowing out of the American middle class accompanied by the expansion of a global middle class, mainly in Asia. This in turn has led to an erosion in working-class and middle-class support for the Democratic Party, something that the Biden administration naturally hoped to reverse. A foreign policy for the middle class is part of that effort.

The results have been onshoring and friend-shoring and the leveraging of US market access and security guarantees in the service of creating a US-centered global economy that serves US interests first, but without the traditional prop of free trade. It is “Make America Great Again” in a Democratic key.

This is the context in which electric-vehicle manufacture, to mention just one example, with all the supply chains that feed into it, has become a national-security policy priority.

Whether this choice will, in the emerging logic of our 21st-century economic security dilemma, ultimately make the United States less secure is not an easy question to answer. What is clear is that multinational enterprises, or any enterprises dependent on globalized supply chains and open markets, need to look not only at policy manifestations — the Inflation Reduction Act or the Chips and Science Act — but also at the deeper political logic that drives them.

“Gradually, then Suddenly”: Why Change Has Become So Quick (Part Two)

“Gradually, then Suddenly”:

Why Change Has Become So Quick (Part Two)

by Dee Smith, CEO

[part two of two]

If you ask a room full of people what color the sky is, those who answer will almost always say “blue.” But is the sky really blue? About half of the time, it is black sprinkled with stars. At other times it can be grey, orange, yellow, red, all these colors at once, or even green or purple.

The sky is blue much less than half of the time. So why do almost all of us say it is “blue”?

We do it because it is a practical shorthand, or “heuristic,” that might not be perfect or rational but will enable us to keep moving forward. Heuristics let us categorize things and move through life without expending too much thought. If you see a coil on a stove that is orange in color, you will assume that it must be hot before you assume that someone painted it with orange glow paint.

We are entering a time in which such rules of thumb, developed for an earlier era, are becoming unreliable and deceptive. They can be serious impediments to our success and even to our survival. For the reasons discussed in the first instalment of this article, the near future is becoming less and less predictable. Specifically, it is becoming less like the immediate past and less like anything that we might expect on the basis of previous experience—what we think we “know.” And so the rules of thumb that come from that experience—the heuristics—are increasingly likely to lead us astray and threaten us.

How do we deal with this?

First, if it looks like a duck, walks like a duck, and quacks like a duck, do not assume that it actually is a duck!

Second, avoid thinking fast—which relies on assumptions, biases, and heuristics—and focus on thinking slow, as Daniel Khaneman and Amos Tversky described in the famous book Thinking, Fast and Slow, a distillation of work for which they both won a Nobel Prize. And as you change your way of thinking, you might want to remove a few words from your working business vocabulary. These include “always,” “never,” and “I’ve seen this before.” Today, it is always better to believe you have not seen it before.

Expectations have a great deal to do with what we see and understand. If you expect to see the same things that you have seen in the past, your mind will often filter out any elements that are different. In a situation of rapid change, this ingrained mental process is guaranteed to lead you to the wrong conclusions. So you need to train your mind to expect different patterns and at the same time not to expect a repeat of what you know. In other words, avoid getting comfortable.

Third, inculcate some new mental models. For example, look at the data—the indicators—that are before you. If you jettison preconceived ideas, then what do they really tell you? Think about “what-ifs.” What might you see if a situation began to emerge that was very different from anything that you had learned to expect? Imagination is your friend in understanding divergent situations, which is why intelligence failures are often called “failures of imagination.” A useful thought trick is to suppose that a situation you encounter is the opposite of what it seems to be, and then go from there.

Mental agility is an equally critical skill. Be prepared for eventualities—but in a general way—because these days you don’t know what is going to happen, or where, or how, or when. Be prepared to turn on a dime, and then turn on a dime again.

Monitoring elements of interest to detect early warnings—subtle signals that can tell you if change is coming—can be very valuable, but it needs to be ongoing. And you also need to be attuned to paying attention to conflicting or “abnormal” signals. Major changes often announce their arrival through subtle and contradictory indicators, also called anomalous indicators because they violate expected patterns.

The single most important tool, however, is an analytical mindset. To deal with complexity and emerging risk, be objective and systematically investigative. Don’t be political, polemical, or emotional. You might not like what you are forced to confront—you will almost certainly not like some of it—but flying blind because you refuse to accept what the evidence is telling you would be even worse. “That can’t be the case” is another phrase to remove from your vocabulary.

None of this is easy or “natural.” It is more work—it requires more energy—to think through things instead of choosing the “automatic pilot” that heuristics provide. The autopilot can fly you straight into a mountain. 

In a time of pervasive change, if you continue to employ existing and preconceived ideas, frameworks, or mental models, you will miss the signals, misinterpret or misunderstand them, and make profound mistakes.

The near future will not be easy to navigate. There are no fixed or “right” answers, only what is effective in circumstances that are constantly changing but does not contradict or betray your values. If you open your mind to seeing new patterns and finding new approaches, a course can be charted much more effectively.

As a very wise CEO once told me, “All conditions are temporary.”

Turkey’s Autocrat Shifts the Balance (I&W)

Turkey’s Autocrat Shifts the Balance

During the NATO summit in July 2023, a sudden change in policy was announced: Turkey would not veto the application by Sweden for admission. In apparent exchange, Turkey would receive F-16s from the United States along with access to advanced upgrades for its existing F-16s. As part of a “general normalization and improvement” of relations with the EU as well as with the United States, Sweden would work closely with Turkey on “counter-terrorism.” Turkish accession talks with the EU would resume, along with discussions about the Turkish role in the European Customs Union and the possibility of visa-free travel for Turks to the 27 countries of the Schengen Area.

The news was generally received in the Western press with a mixture of delight, incredulity, and suspicion, especially as Erdoğan had repeatedly denounced the behavior of the West during his campaign to win the presidential election of May 2023. How could a country, or at least a president, alter his course so suddenly and so dramatically?  

One point to bear in mind is that capriciousness is part of Erdoğan’s autocratic style.  The persona that he affects as a political leader is often volatile and irascible. He frequently berates Turkey’s citizens, shouting at them as a disappointed and exasperated father while he castigates other nations and their leaders for their failure to treat Turkey, Turks, or Muslims in general with the respect he believes they deserve.

As second point is that autocratic caprice has been part of modern Turkish political tradition.  Since the founding of the republic in 1923, Turkish politicians have rarely hesitated to embark on ambitious programs of social engineering. The first president, Kemal Atatürk, transformed the subjects of the sultan into citizens of a new secular society, changing their clothing, their names, their alphabet, and their language. Erdoğan was intent on promoting a revolution in attitudes toward the history of the Turkish nation and especially the Ottoman Empire, the last and greatest of the Muslim empires, which collapsed in the aftermath of the First World War. He was determined that it would no longer be seen as an embarrassment.

This affected foreign policy. Under Erdoğan, Turkish strategists became increasingly interested in extending their reach into lands that the Ottomans had lost, or into regions they had not controlled but were nonetheless seen as part of the wider Turkic world of Central Asia. Since the 19th century, of course, Central Asia had been under the control of the Russian Empire and then the Soviet Union. Indeed, Russia still assumes that the Central Asian republics remain within its sphere of influence. But, many Uzbeks, Kazakhs, and other inhabitants of the region are increasingly inclined to disagree, seeing Russia as an imperial power to be resisted.

As Russia weakens, strategists in Ankara have become aware that the opportunity to realize the Pan-Turkic dream of the late 19th and early 20th century is growing, especially if it is understood in terms of the “soft power” implied by closer cultural and economic ties. Even when relations with Russia seem relatively cordial, therefore, it is not seen in Turkey as an ally. Although it is not really an enemy, at least at the moment, it will definitely be seen as a rival and an obstacle.

It should be emphasized that a pan-Turkic Central Asia is not just a romantic fantasy. A region in which Chinese, Iranian, and Russian areas of influence meet is undoubtedly of strategic interest for the United States. America’s rivals possess far more extensive ties than its bureaucrats or corporate executives could hope to acquire by themselves; Turks, therefore, are ideally positioned to support American aspirations if they so choose. Turkish religious, linguistic, and cultural affinities have existed for many centuries and Turkey is not only an American ally but also a member of NATO. This gives it a status to exploit in the former Ottoman lands.

Erdoğan is sometimes misunderstood as merely an Islamist politician. It is more accurate to say he recalls the fusion of Islam and Turkish nationalism that was encouraged by Kenan Evren and the generals who led the coup in 1980 against the ineffective coalition of Süleyman Demirel. This is one of the reasons why his alliance with the MHP on the far right of the political spectrum has not diminished the support that he receives from more conservative or traditional Muslims. He offers something that very different sections of Turkish society can admire, or at least support in elections.

Turkish neo-Ottoman nationalism is enough to get Erdoğan his electoral majorities, however slim (just 4% in 2023). His reversal of position on Sweden and NATO in July was a sign of how much Erdoğan values Turkey’s membership in the alliance, not because of any shared values but because it could serve, in the moment, his strategic goal of neo-Ottoman revival. Erdoğan has long since proved he can provoke the West; that was always just one stage in a broader agenda.

Niger’s Anti-Foreign Coup (I&W)

Niger’s Anti-Foreign Coup

The coup in Niger on 26 July was rightly condemned by the United Nations, the European Union, the United States, and France. It was also denounced by the Economic Community of West African States (ECOWAS), which has been the main regional security actor since its intervention in Liberia in 1990. The African Union took the further step of issuing an ultimatum to the new government threatening to use “all measures” against the coup-makers if they did not back down after 15 days.

These immediate and threatening responses were due in part to fear. Since 2020, there has been a wave of military coups across the Sahel, including in Chad, Guinea, Sudan, Burkina Faso and Mali, and these have overturned an earlier trend toward democratization and presumed stability. Along with fear, however, there has been a sense of disappointment and loss. Niger had been a democratic standout until the coup, receiving thereby a great deal of foreign aid: more than half a billion US dollars from the EU alone between 2021 and 2024. The international system has been badly shaken by the chronic instability in South Sudan since its creation in 2011 as a very expensive experiment in internationally backed state formation. The trend since then had been to devolve international power to the African Union and regional bodies such as ECOWAS, while also allowing a greater role to Western powers, especially France, in providing lift capacity and firepower for fighting the numerous local insurgencies, many of which are Islamist. During the same period after 2011, Niger held three democratic elections and enjoyed a peaceful transfer of power in 2021 from Mahamadou Issoufou, who came up against a term limit, to Mohamed Bazoum. Niger could be and was seen as a rare example of success—right up to 26 July.

Then it became a nightmare. Burkina Faso, Guinea, Mali, Mauritania, and Algeria all issued statements saying they would oppose any military attempt by ECOWAS to unseat the new government of General Abdourahamane Tiani, the head of Bazoum’s presidential guard who feared he might be next in a military cleanup campaign initiated by Bazoum and backed by the US and France. The Wagner Group’s Yevgheny Prigozhin, who has been active in the region as both a mercenary leader and an investor (see SIGnal, “How Putin Goes,” 5 July 2023), endorsed the coup and offered his help in securing it. But the deeper problem was that Africans in the region did not all respond to the coup as a setback. As of this writing, ECOWAS did not seem to be following through on its threat of decisive action if the coup makers did not stand down; the deadline Sunday came and went. Many in Africa expressed their solidarity with the coup makers in rejecting outside interference, especially by France.

This should not have been quite such a surprise. When Emmanuel Macron took office in 2017, he gave a celebrated speech in Ouagadougou aimed at burying neocolonialism and entering a new era of partnership. The security part of that partnership did not go well, however, and Macron made a four-day tour of central Africa earlier this year, announcing a shift towards a greater appreciation and respect for local authority. Meant as an assurance that the condescension of earlier decades would be discarded, it was evidently seen by some as a sign of irresolution and withdrawal. Military forces in the Sahel seem to be moving toward a view that France is their primary adversary, adamantly opposing any foreign intervention in their internal affairs. What is most striking in the Nigerien case is that ECOWAS and the AU, whose own security capacities have been strengthening for a decade as a result of French and international support, are now being seen as “foreign,” or at least as inimical to the independence of African states, despite their being African themselves.

Russia, meanwhile, has been gaining influence. By appearing to treat African states as equals and giving their leaders a grandiose reception at the Russia-Africa Summit, Russia has appealed to African leaders weary of their low status in the global arena. Russia’s actions—including the cancellation of a substantial African debt of USD 23 billion and the exploration of mutually beneficial partnerships—align with the aspirations of African states, as have somewhat similar Chinese initiatives. The refusal of many African states to condemn the Russian invasion of Ukraine is to some degree a reward for Russia’s Africa policy.

The overarching concern among the people of Niger is that the foreign military presence and bases, in cooperation with Bazoum’s elected government, have not effectively addressed the insurgent threats in the region. Consequently, there exists a growing belief that the Nigerien military, with support from Russia, might be better equipped to combat the insurgency and handle security challenges within the country.

ECOWAS and the African Union need to adopt a more proactive approach to curbing military power seizures, promoting instead the principles of democracy, good governance, and respect for constitutional order. Doing so might restore some confidence in the efficacy of these regional bodies and foster African stability.

However, a pattern of institutional weakness at the regional and continental levels, accompanied by the rejection of elected governments by Africans themselves in individual states, could also lead major players such as France, the US, the EU, and even the UN to back away from existing commitments and focus more narrowly on particular interests. In the case of the EU, this would mean taking an even harder line against African migrants, thousands of whom die every year as they attempt to reach Europe. France is likely to become less internationalist and more inward-looking, an ongoing trend alongside attempts by Macron to reconcile the traditional French pursuit of la gloire with the demands of internationalism. At the same time, the US and other powers are likely to become less reticent about fighting Russia and China on African soil for access to strategic minerals.

The result will be an increasing divide between African economies able to grow their own productive capacity and those that, like many today in the Sahel, will choose the appearance of independence and the likely reality of chronic under-development as authoritarian states such as Russia and China are allowed to set the prices. An entirely understandable revolt against foreign dominance could then introduce an era that will feature a version of neocolonialism different from its predecessor, but not nearly different enough.

“Gradually, then Suddenly”: Why Change Has Become So Quick

“Gradually, then Suddenly”:

Why Change Has Become So Quick

by Dee Smith, CEO

[part one of two]

We are suddenly confronted—on all sides, it seems—with abrupt and wrenching change, with transformations that few if any of us expected to see or can easily understand.

Why is this occurring? Or perhaps more to the point, why is it so surprising to so many of us? These are two distinct but nevertheless related questions.

In the late 20th century, new mathematical models and enhanced computational power fueled a real revolution in our understanding of complex systems. Much of this revolution remains poorly understood—if it is understood at all by the general public.

Why is it important? Because discoveries about complex systems revealed that they all exhibit a shared set of attributes. They have hidden links and feedback loops. They engender enormous unintended and unexpected consequences. They are inherently unstable and fragile under certain conditions. Furthermore, they are liable to abrupt change including “tipping points,” cascading phenomena, and amplification of events.

The rigorous mathematical study of what is known as non-linear dynamics has revealed key characteristics that such complex systems display. They are not complicated to explain, although some of them seem counterintuitive, or even contradictory.

One of the most intriguing is homeostasis, a dynamic process that is characteristic of complex systems that maintain stability, despite disturbances, as long as conditions stay within a certain range. And yet outside that range, even small changes can have dramatic consequences. Inputs of the “right” kind, at the “right” time, into a system that has been stable can cause massive changes in the system’s state.

In some cases, systems can generate dramatic change themselves when they approach a critical point of phase transition. More generally, however, systems remain vulnerable to massive changes in state caused by external agents. Think of the introduction of a small amount of cyanide or polonium-210 into a living human body. It will change its state from living to dead very quickly in most cases.

The key point of all this is that change often happens abruptly, not gradually. And there are many reasons why abrupt change happens. The more complex a system is, the more vectors—the more inputs—of change will impact all the elements within the system. So change can increase exponentially.

The nature of abrupt change has been demonstrated and modeled mathematically. A Danish physicist named Per Bak studied it through the seemingly unlikely medium of sand piles. As it turns out, if you drop grains of sand on a sand pile, one by one, the pile becomes larger and more unstable. But grains of sand do not fall off in sequence, one by one, as each additional grain is added. Instead, they build up until, at a moment that cannot be predicted with any precision, a large part of the sand pile suddenly collapses in a kind of tiny avalanche. It is a bit like how Ernest Hemingway answered the question of how he went bankrupt: “Gradually. Then suddenly.”

This may seem mundane, but ask yourself why you are so surprised by sudden change and you will see that it is not. Think of putting a glass of ice outside on one of the hot days we are now experiencing almost everywhere. Once it warms to 0°C (32°F), it quickly changes its phase state from solid to liquid—in other words, it melts. It doesn’t stay part water and part ice for long on a hot day. And no single molecule is ever half-frozen and half-melted. It changes abruptly from frozen to liquid.

Many unimportant as well as very important changes in our own lives happen suddenly. You don’t have a car wreck over a period of several weeks, or a heart attack over a period of months. Why then are we so surprised when we encounter sudden change?

There are various ideas about this—including the suggestion that it may be due to the human brain’s inbuilt need to conserve energy. After all, it takes less thinking to deal with continuity than with change. There is also an evolutionary argument. Homo sapiens and our progenitors adapted over millions of years to a world in which change was usually very slow and sudden change simply resulted in death. This is all speculation, but whatever the reason, it is a very old question, closely related to one known to philosophers as the “problem of induction”—simply put, that things stay the same until they don’t.

It is a real problem, however, and it skews our perception time and time again. In the run-up to the Russian invasion of Ukraine, for example, many highly informed experts were certain that Russia would not invade. Their rationale was primarily that there had been no major war in Europe for 70 years. This is the problem with induction—believing that the past is a reliable guide to the future—and it leads to what in the intelligence world is called “failure of imagination.”

Putin himself was apparently subject to a “failure of imagination” in making his decision to invade Ukraine. The various tepid responses of the West and of the United States in particular to his actions during the previous 2 decades—in Georgia, in Syria, and in Ukraine itself in 2014 —and the disastrous American withdrawal from Afghanistan, impressed the idea on Putin that the West would do little if he simply took Ukraine by force.

So, if we can’t use the past as a reliable guide to the future, what can we use? This is a good question.

If we step back, however, we should now be able to suggest at least provisional responses to the two questions that I asked in the opening paragraphs.

Why does it seem change is so much more sudden and wrenching today? Because it is! We have unquestionably created the most complex human society with the most multifarious and most interlocking systems that have ever existed. And its complexity is increasing daily—even hourly. Dynamic complex systems in which complexity is increasing are especially prone to rapid transformation and unpredictability. So it should not seem hard to understand that this is resulting in more accelerated change—of larger scope, across more domains, at greater speed, and with more unpredictability— than we have ever seen before. Simply because of the nature of complex systems, we have passed into a state where change is accelerating and becoming more non-linear, with more unforeseen—and sometimes unforeseeable—effects and outcomes. And again because of the nature of the system and because of where we are at this point in history—a point to which I will return in a later post—change is becoming more radical. It represents departures further and further away from what we have known in the very recent past and what we have assumed will exist in the near future.

So why are we so surprised all the time? We are simply not mentally suited—we are not evolved—to deal with the current pace and scope of change. We have created a world transforming—technologically, socially, and environmentally—more rapidly than we can accept as individuals, as societies, and in fact as a planetary biological system.

More complexity equals more change equals more unpredictability equals more and greater risk. This is the world we have engineered, like it or not. We have made our bed.

[part one of two]