The End of the World is just the Beginning, written by the economist Peter Zeihan, is a book that insists that Gross Domestic Product cannot grow forever due to a scarcity of materials, to the shock of both capitalists and Marxist Utopians. In this book, Peter Zeihan looks at the scarcity of precious metals throughout the world, as well as the fragile industrial infrastructure on which the world depends. The problem is due to the fact that modern technology requires so many different components, derived from so many different resources, and these resources are neither infinite nor spread evenly throughout the world. Different countries have different combinations and amounts of these precious resources, if any at all, and the production of modern technology relies on stable diplomatic relations, economical supply chains, and the unhampered production of these minerals Trade wars, as well as territorial disputes concerning territories where supply lines are threatened, can severely undermine human civilization’s ability to harvest, transport, and incorporate these precious resources. An example of the instability inherent in our political economy can be found in the reliance China has on India to not interrupt shipments of oil from the Middle East that cross through the Indian Ocean on their way to China, while the two countries frequently engage in saber rattling and border skirmishes. The problems here rest on the fact that as the world’s largest manufacturing hub, a China without oil shipments would result in an economic windfall across many different industries, where severe material shortages would be experienced the world over. Due to the fact that political convenience and material interests of the political elite primarily determines what wars are fought and how they’re fought, our entire global economy can be said to benefit from the fact that for decades, international relations have been handled as if everyone walked on eggshells. As we’ve seen with the belligerent and isolationist behavior of the world’s superpowers in the last few years, from America to Russia to China, a new era is emerging in which global trade is beginning to break down the world over as military alliances and trade protectionism becomes the new political currency that secures power inside these countries’ selectorates. These trends, in tandem with the increasingly high resource diversity needed to produce new products and the more sophisticated supply chains needed to transport these materials from all over the world, shows that the evolving political order of the modern world might pose an existential threat to the global economy.
While nationalism on its own isn’t bad, given that its antithesis seen in open-borders liberalism has led to devastating consequences as well, nationalism in such an interconnected global economy is an existential threat to the continued functions of many industries. The problem is that as the General Rate of Profit falls, global trade becomes more and more of a zero-sum game in which winners and losers are determined primarily by subsidies, trade laws, and who can cut more corners. China in the past was able to take advantage of this to great effect, being able to make off with trillions of dollars in American intellectual properties, while being able to ship products to the states for free due to subsidies by the US government, while crushing workers movements domestically to ensure it kept its labor costs lower. While in countries like China, the blowback from proletarians is nullified by its authoritarian government, in countries like America, this has not been the case and the call for protectionism has only grown more and more as the evidence has mounted that Americans have been taken advantage of. The problem with these trade wars, in such a connected economy, is that its the equivalent of Superman fighting Zog, in that even though Superman is fighting to save Gotham or wherever the fuck he lives, he’s destroying most of the city in the process of fighting his enemy. As we’ve seen with the escalating trade war between America and China, in which America has now made it nearly impossible for China to import microchips, which China had previously spent hundreds of billions doing per year, while making it harder for China to produce its own chips, this has seriously upended the electronic industry. China produces the vast majority of the world’s electronics and not being able to produce these electronics nearly as easily or affordably will only send costs skyrocketing in an industry that is essential to economic and technological growth. While America can leverage its enormous purchasing power to coerce different countries into aligning against China in regards to trade, this will undoubtedly hurt both America and China, and the most worrying aspect of these trade wars is that these are just accepted costs for the political elite of these superpowers now. The bottom-line political priorities of the late 20th and early 21st century, in which whatever costed less and was more convenient won out in the free market, are being replaced by new nationalist priorities in which the superpowers’ political elite are increasingly incentivized by their selectorates to put their own countries first. While there may not be any winners in the new emerging political landscape, there will certainly be losers and that is entirely intended by the political elites.
In countries like Iran and Russia, which have yet to surrender their autonomy in alliances with more powerful Western countries, they have seen themselves practically exiled from the global economy, with only their raw materials returning any money to their beleaguered economies. While Russia and Iran might seem like unusual comparisons to draw between other countries, they draw good parallels with how other national economies might evolve when they become isolated from the global economy. When we look at how capitalist economies operate in these isolated circumstances, it seems that these countries are always in a state of economic decline, reliant on legacy infrastructure, existing technologies, and natural resource industries to carry them forward. In the wake of the Cold War, we’ve seen Eastern Bloc countries that have refused to bow to the West survive off of equipment and facilities built mostly by the Soviet Union, and the War in Ukraine has showed this better than anything else, as Russia has rolled in aging Soviet vehicle after aging Soviet vehicle in a humiliating display of its diminished capabilities. When we live in an era of smart phones and artificial intelligences, where Russia’s GDP per capita dwarfs that of the Soviet Union’s, it should worry you that their military capabilities, which their government focuses so much on, have diminished so much over the last three decades. China in the coming years may mirror Russia and Iran’s current downward projections, as it’s found to be too troublesome to engage in trade with by the world’s reigning consumer capitals. The global economy, despite whatever inflated nominal values we assign to things, isn’t geared for prospering without healthy trade relations and in an age where these trade relations are breaking down, that should be very unnerving. While the wealthy consumer countries can try to find new countries to spur industrialization and the growth of manufacturing in, what we’re seeing is a massive waste of talent, resources, and facilities as more and more countries find themselves economically estranged from the West and its allies. The next manufacturing hubs won’t be created overnight and, in the meantime, prices will continue to rise in many industries because in a world where we can’t train people and build new factories overnight, where natural resources are neither ubiquitous or evenly spread, we’re going to experience severe supply and price shocks as a result of engaging in trade wars with what were the cheapest and most convenient trading partners.
While I can go on about how doomed the global economy is, from aging populations draining resources from workers that would otherwise be spent on raising children of their own, to skyrocketing national debts that leave countries like Japan in permanent recessions, and so on, I’m going to wax philosophical from here on out. While Marx may have wrote about the inevitable post-scarcity conditions that capitalism would usher in, as the General Rate of Profit declined to the point that prices became meaningless, we may never make it to that point. The truth is that there were many things that Marx failed to predict, from the need for more and more diverse resources to create more sophisticated products to the demographic problems that countries experience today to the declining benefits derived from free trade on a free market. As a philosopher who once had a promising career, who married a wealthy countess, who suffered from political persecution, who took up residence in London as a refugee, where he lived in poverty for decades with his steadfast wife, I would never insult Marx’s character or perseverance, but I am questioning his foresight. The global economy has grown so sophisticated and complex, so dynamic and unknowable, that the best we can do today is look at very abstracted graphs and guess at the trends based on the outlines we draw from our over-simplified analyses. Communism does not seem to be likely to naturally occur after a peaceful transition from capitalism and it seems that, as the General Rate of Profit has declined across industries, so too have the surpluses that afforded humans the higher standards of living in the past that came with technological increases. In a world economy suspended on a bubble kept inflated by the injection of credit, debt, and exploitation, it seems that the magically growing economy of the past is transforming into a vampiric institution, sucking the energy and money out of the very people, facilities, and supply chains that sustain it in order to artificially prolong itself. Despite claims of humanity approaching a technological singularity with the advent of artificial intelligence, we’ve only advanced slower and slower over the last several decades and as material shortages continue to mount, the development of new technologies and the implementation of them in the broader economy might begin to completely stall out. The idea of post-scarcity, in the year 2022, might be further removed from being achieved than it was when Marx first came up with the concept and if we are not very careful in the coming decades, the closest humanity could ever get to post-scarcity might lay in the past, rather than the future.