Here’s a name you probably won’t know: Peter Zeihan.
His speciality is analyzing the meeting-point(s) between geopolitics (the “where”) and demography (the “who”). In his four books (details below) he extrapolates from that nexus not only the “what,” but also the “when” and the “why.”
The books meticulously slice-and-dice the world in all sorts of ways, e.g. by country, by sector, by product, by process.
Quite impossible to compress all this into one short post.
But here’s the core of the Zeihan thesis:
After World War II, there remained two hegemonic superpowers—the (apparently) implacably-opposed United States and the Soviet Union/Russia.
The 1944 Bretton Woods Agreement, building on the achievements of the 1941 Atlantic Charter, saw many nations signing up to what amounted to a security- and financial Pax Americana.
The upshot of these agreements was that the War once won (the Bretton Woods talks started a scarce month after the Allied D-Day invasion of Europe), the USA pledged that signee nations would be able to, in Zeihan’s words, “go anywhere, anytime, interface with anyone, in any economic manner, participate in any supply chain and access any material input—all without needing a military escort.”
The USA felt able to stand by this guarantee because it had vast reserves of capital, and the only remaining navy capable of global reach.
So . . .
- Pirates? No problem—the US navy will shut them down for you;
- Soviets trying to penetrate your government? No problem—the USA will vote you more reconstruction funds (the “Marshall Plan”);
- Money issues? No problem—your currency can be converted into American dollars, which are backed by all that gold in Fort Knox;
- Energy issues? No problem—the USA guarantee of shipping safety will ensure you can import coal/oil/gas from anywhere in the world to fuel your industries;
- Food issues? No problem—ditto the above for the fertilizer you need to feed your expanding populations;
- Nowhere to sell the stuff your industries produce? No problem—the US market (well, pretty much any market) will be open to your exports.
We call the resulting process “globalization,” and for many nations it made the years from 1945 onwards a golden time of economic expansion and social development.
However, with the 1989 failure of the Soviet empire, the USA no longer had a superstate enemy.
And so began a long course of American withdrawal from its previous global commitments: No more guaranteeing of safe shipping lanes, no more unfettered(ish) access to the US market, no more strings-free(ish) aid to governments.
The Bretton Woods system had meanwhile formally ended in 1976, and thereafter all industrialised nations began using floating (“fiat”) currencies—not backed by gold.
World trade—in everything from pineapples to Porsches to particle accelerators—depends on myriad suppliers in myriad countries being able to do their bit and then ship either an intermediate product to somewhere else for continued processing, or a finished product for end-use (the “global supply chain”).
Why is modern shipping so important?
In a word: cost. Shipping enjoys huge cost savings over land transport. According to Zeihan’s reckoning, “the practical ratio of road to water transport inflates to anywhere from 40:1 in populated flatlands to in excess of 70:1 in sparsely populated highlands.”
And again: “Combined with bigger, slower ships, containerization has reduced the total cost of transporting goods to less than 1 percent of said goods’ overall cost. Before industrialization, the figure was typically more than three-quarters. Pre-deepwater [sailing], the figure was often north of 99 percent.”
But now, the withdrawal of the US guarantees of shipping safety and market access makes it virtually certain that the shipping part (i.e. the majority) of the global supply chain will sooner or later be disrupted—by piracy, if by nothing else.
This could take the form we’re already seeing, of small boats attacking large ships; but also—as things unravel—by state-licensed privateers, and eventually even by states themselves, in places where shipping lane pinch-points are susceptible to a “pay-up-or-else” protection racket.
Much of this is graphically (in both senses) illustrated in the map at the top of this post.
The result? Shortages. Of pretty much everything . . .
Thus far the Zeihan hypothesis.
But there’s worse to come . . .
Zeihan also deep-dives into the demographics of pretty much every country of note. And the picture he paints is far from rosy.
See, every nation has its own particular percentage mix of babes (no, not that kind), young, middle-aged and old. Each of these sectors brings something different to the economic table: babes are the adults of the future; young adults work, spend and reproduce; older adults work, accumulate capital to invest, often pay plenty tax; while retirees cost in pensions and health.
Zeihan reckons that with the combination of the vast post-war baby-boom generation now or soon heading into retirement, and with birth-rates having plummeted worldwide, demographic disaster is barrelling head-on towards any number of countries.
Reading the demographic charts, he concludes the greatest immediate threat is to China, with its combination of incredibly fast industrialization and a ruinously low birth-rate.
However, according to him, Russia, Japan, Germany, Italy, South Korea, Ukraine, Canada, Malaysia, Taiwan, Romania, the Netherlands, Belgium, and Austria are also at risk sooner rather than later. As he puts it, “All will see their worker cadres pass into mass retirement in the 2020s. None have sufficient young people to even pretend to regenerate their populations.”
In the 2030s and 2040s, Brazil, Spain, Thailand, Poland, Australia, Cuba, Greece, Portugal, Hungary, and Switzerland will all face the same problem.
And so on . . .
Country (France) with a healthy demographic profile. Not too many older inhabitants costing in pensions and health; plenty of young and older wage earners contributing to the nation’s coffers; and plenty of youngsters to fill their shoes in due course.
Country (Japan) with an (extremely) unhealthy demographic profile. Many older inhabitants costing in pensions and health; so-so numbers of young and older wage earners contributing to the nation’s coffers; but dangerously few (and declining numbers of) youngsters to fill their shoes in due course. Charts of this type are known as “demographic pyramids.“
And here’s the demographic pyramid for China. Compare the enormous x-axis numbers with those of the previous two charts, and draw your own conclusions . . .
➔ Want to see the most recent demographic pyramid for your own country? Use the dropdown listing below.
➔ Links (they’ll open in the same tab to avoid ‘popup’ warnings) are to the Population Division of the UN Department of Economic and Social Affairs.
➔ Country names are those officially used by the UN.
Zeihan notes that precious few countries have managed a high degree of development while simultaneously avoiding a collapse in birth rates. “It is . . . a painfully short list: the United States, France, Argentina, Sweden, and New Zealand. And . . . that’s it.”
So far demography . . .
Then we come to food.
Almost all the food grown worldwide is dependent on inputs of fertilizer. The various types of fertilizer (nitrogen, potash, phosphate) all come from a limited number of countries, many of which Zeihan believes are about to implode because of their demographics, never mind any supply-chain interruptions.
This won’t impact those food-secure nations with sufficient in-country supplies of fuel, finance and fertilizer. Problem is, says Zeihan, “France, the United States, and Canada are the only countries on the planet that check all the boxes.”
Other countries—he lists New Zealand, Sweden, Argentina, Australia, Türkiye, Nigeria, India, Uruguay, Paraguay, Thailand, Viet Nam, Myanmar, Italy, and Spain—might equally pull through, but only if they can find local partners to remedy their shortfalls.
Otherwise, any country that relies heavily on food and/or fertilizer imports to feed its people is going to be seriously impacted by any interruptions in the global supply chain.
Lack of fertilizer ➔ ➔ ➔ lack of food ➔ ➔ ➔ FAMINE.
Food (in)security worldwide. Hatched green means a net exporter of food; green means food-secure; yellow means under a quarter of its food is imported; orange over half of its food is imported; red means over three-quarters of its food is imported. Trouble coming . . .
All in all, it’s a distressing and sobering picture: According to Zeihan, the post-war world we’ve come to think of as stable and permanent is actually no such thing, is in fact about to fall apart.
Soon.
Any rays of hope?
Well, first of all, Zeihan may be wrong. After all he’s an American, so it’s possible his analysis (particularly with reference to China) is biased. However, all told I find his analyses reasoned, thorough and comprehensive, which for me at least renders them compelling.
Second, it is thought by many that a small group of very powerful people with a plan (see “Couldn’t happen here . . .“) has been keeping from us technologies that would negate much of the foregoing, specifically in the areas of free (“zero-point”) energy, medical cures and food production. The release of any or all of these technologies would dramatically alter the equation . . .
Third, none of above necessarily entails the doom of mankind. If Peter Zeihan is right, it just means that the world we’ve become used to is about to change, albeit catastrophically and involving much death. But out of that change—as always—will emerge new geopolitical realities. And—who knows?—maybe mankind will be stronger and more united because of it.
So, all things considered, fingers indeed crossed for 2024 . . .
This post barely scratches the surface of Zeihan’s minutely detailed analyses. For more (oh, so much more), see his four books (all links external and open in new window/tab):
- The Accidental Superpower (2014, new edition coming), maps and charts here;
- The Absent Superpower (2017), maps and charts here;
- Disunited Nations (2020), maps and charts here;
- The End of the World is Just the Beginning (2022), maps and charts here.
[Image at top shows major Eastern Hemisphere trade routes, and attendant supply chain risks. Hi-res version of this and all other maps and charts available on Peter Zeihan’s website here]
P.S. Best wishes to all for a Happy—and above all, a drama-free—New Year.